Wednesday, January 4, 2012

Sample – 1: SHGs – Making waves in the grass roots


The only good thing which is hailed by nearly all the people in the kodumudi union including the Govt. officials, bank managers is the concept of SHGs Self – help – groups. In the kodumudi union, it functions very well. The program is implemented through Block development office along with the bank participation. First a group of 12 – 20 people (between age 18 – 60) is formed through the officer in charge in Block development office. Mostly female SHGs are formed, there are also other functioning SHGs as well. Once it is formed, the persons in the group will save 10 rupees, 20 rupees whatever they can and will form a fund. If any person needs money in their group for any genuine reason they give loan to the person from the saved fund. They help each other like how a bank does (Receive deposits; give loans) among themselves but without profit motive as in the case of banks. Each group will have a head and 2 representatives. The whole group will regularly meet during public holidays in a public place to make decisions democratically (It is the only instance we really saw democracy in its true spirit). The best performing self help groups are eligible for huge amount loans to start a big business (Rs 50000). Loan have the repayment period of 6 months, availed through a bank, out of which Rs.10,000 is subsidy. The rate of interest will be minimum. The group can do small business or divide the money among themselves into equal parts and each should repay the proportional amount or everyone should repay the whole amount (which ever is applicable) with in six months. Simply we can say all the members of the group are jointly liable for the loan incurred(Joint liability groups, JLGS). Initially the job of selecting the best performing SHGs was done by NGOs. But as there was a lot of corruption in NGOs, the practise was discontinued and PLF (Panchayat level federation) was instituted. PLF has a elected chairperson (among the group heads), Secretary, Joint secretary, Treasurer etc. Now they will decide to whom the loan should go democratically in rotation policy.


This concept without doubt is making waves in Kolathupalam and kolanalli (kodumudi union) because
  1. It empowers women.
  2. It makes the women and other landless labourers participate in the decision making process which aids in their human development.
  3. Extends Credit – facilities to the fringe group, hence financial inclusion.
  4. It increases the social cohesion. we met people belong to these SHGs and found that they were really happy with its progress. It was nice to see the poor people happy and after all we do research to perpetuate the same. 

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