They write their own success stories
By Anuradha Thakur

URMILA smiles a confident smile today as she relates her story, which sounds like fairytale. She was barely 16 when she was married to an alcoholic, who frittered away his meagre earnings in drinks. With a rundown room for a house and four children to support, she started to fend for all of them by working as a domestic help in several houses. It was in these circumstances that she joined Chinmaya Tapovan Trust (CTT), an NGO in Sidhbari, Kangra, as a worker. With the guidance of NABARD, she formed ‘Atma Vikas’, one of the first Self Help Groups (SHG) of CTT in 1994. Thirteen poor, rural women got together by saving and contributing Rs 20 per month, per head. Urmila took her first loan of Rs 100 from the group, bought 10 chickens and soon sold 8 broilers for Rs 80 each, thus earning a big profit. Not only could she return her loan from the group at a rate of interest of 2 per cent per month, she also felt strong enough to take a second loan of Rs 1000 from the group for cultivating mushrooms. Her hard work earned her steady profits and she has been able to now make a house, educate all her children, marry her two daughters and meet the expenses of her family.

Kangra valley has many Urmilas today, thanks to the pioneering efforts of NABARD and Kshama Metre, Director, CTT. Together, they have worked to introduce and carry the SHG concept to the rural women of Kangra and give them economic self-reliance, social esteem and self confidence. The conferment of the Indira Gandhi Award for Peace to Prof Yunus of the Grameen Bank, Bangladesh, for his contribution in the field of rural banking, recognises once again the value of this very idea in the amelioration of rural poverty. It was he who showed to the world how, by nurturing and organising rural folk into SHGs and effecting their linkage with banks to meet their credit requirements, rural poverty can be successfully mitigated.

This concept is widespread in some parts of the country, particularly in the South and the West. SEWA, is a well known organisation of rural women in Gujarat who have achieved self-reliance through SHGs. ‘Poddupulaksmi’ was another such successful thrift and credit progarmme in Andhra Pradesh. In North India, however, the microcredit theory has not really caught on in a big way. This makes the achievement of Kangra district of Himachal Pradesh a unique milestone, not only within the state but in the whole region. The CTT had already formed about 285 vibrant groups in the whole district covering 4400 rural women, when the district administration also decided to chip in with its efforts. The administration helped mainly to spread the reach of the idea throughout the district. The trust was initially working in only three out of the 13 blocks of the district, but now with lower level government functionaries also involved in the programme, the concept has spread to all the blocks. With this intervention, the numbers have swollen to about 7000 women in more than 540 groups. 340 of these have been linked to banks and out of these, 79 have already repaid their first bank loan and gone in for a second and larger loan. Many more NGOs have also entered the foray now, under the overall guidance of CTT and if their achievements are added, Kangra has over roughly 850 active SHGs; no mean accomplishment, considering the amount of time, effort and nurturing that one group of this type takes. The recovery of loans of all the groups linked to banks is an impressive 100 per cent so far.

A Self Help Group is basically a group built around common consciousness of some problem and responsive to some perceived need. Members pool in their resources, no matter how meagre, to meet their emergent needs and subsequently are able to use their own money for productive purposes. A typical group is of 10-15 members who begin with small contributions like Rs 10-20, a month. The resource-base so built is available to the members themselves, who take loans from the group normally at an interest rate of 2 per cent per month (24 per cent p.a.). The group itself decides the amount to be saved, periodicity, the purposes which get priority for loans, the rate of interest etc. Although unregistered, SHGs function strictly within the framework of an informal set of bylaws and a code of conduct formed by the members themselves.

An SHG evolves gradually through four discernible stages. The first is the saving stage and coalesced with this is internal loaning. These happen simultaneously. The members understand that for each Rs 100 borrowed, there is an interest of Rs 2 and it is in her own interest to repay the loan as soon as possible. They also gradually comprehend that since the interest amount is being ploughed back into the group corpus, each of them has an equal share in the interest that they are paying back. In short, the so called unaware, rural folk get introduced to and begin to form their own micro banks.

The second stage is of bank linkage, wherein banks advance loans to the group as a whole for whatever purpose the group wants after the bank satisfies itself of the performance and the accounts maintained by the group. In Kangra district, Punjab National Bank was one of the first to get linked to an SHG. The amount taken at this stage is usually not very big. It adds to the group kitty advanced to members normally for consumption needs in the beginning. The first loans taken by women in Kangra have shown that these are used initially for children’s school uniform, fees, social and religious ceremonies, purchase of essential household articles, house repair etc. The next stage is when loans are advanced to the group for productive activity. Members take loans from the group in order to set up small enterprises of their own to get into productive economic ventures. Typical economic activities of rural women include poultry, bee keeping, small karyana business, loan for seeds or fertilizer etc. The final stage is reached when an individual member of the group directly gets a loan from the bank for pursuing any economic activity of a substantial cost, which cannot be met by the group itself. The security for this loan, is the track record of the group over the years.

The above discussion may seem utopian. What makes it real is the existence of many groups like ‘Atma Vikas’ and many, many women like Urmila.

The total savings of all the groups in Kangra district put together would be roughly Rs 40 lakh and the total bank loan advanced to these groups about Rs 42 lakh. This is a big amount of money in circulation amongst a few rural women and this in itself is indicative of progress. The fact that recovery of bank loans so far is an amazing 100 per cent reveals that after being put to immediate and urgent needs, the money is being utilised for productive purposes and the fact that so far only women have been involved reveals the amount of consciousness this has evoked in our rural areas here.

Satya, is another case in point. She belongs to the ‘Gayatri’ group in village Cheri which has 14 members. She was finding it difficult to make ends meet as her husband was not working and there were nine members to feed in the family.

The family had an outstanding loan of Rs 35,000 to repay to the bank, which they had taken for poultry and bee keeping, both of which were failed ventures. She also received training in mushroom farming and when she became part of the group, she took a loan of Rs 2000 from the group. The group was linked to the local branch of SBI and got a loan of Rs 11,000. With her loan, Satya started growing mushrooms, she sold warm clothes and shoes and made pickles, all of which got sold locally. She could not only pay her group loan back, but she could also repay old family dues and lead a self-reliant life. The difference this has made in her life not just economically, but in terms of enhancement of her status at home and in the village is evident by the fact, that no decision at home is taken today without her consent and she is a respected figure in her local community. Roshni Devi, of the same group with assistance from the group, started a small piggery and with the income generated, educated her three daughters and got them married. One of them even works in the nearby health subcentre. She feels this made her redeem herself of all the taunts that she had had to listen to, for bearing only daughters. The total savings of this group is Rs 25,000 and they have received a second loan of Rs 50,000.

These instances clearly reveal and bring to focus the role of SHGs in the economic betterment of the rural poor, even if it is at a micro level. Today, this concept has even got intrinsically tied to the rural development approach of the Government of India. The revamping of the IRDP, which has been one of the most ambitious programmes of the Ministry of Rural Development, to the Swaranjayanti Gram Swarozgar Yojana, has been done this year itself to incorporate financing through SHGs in a major way, in addition to individual financing for self-employment. This goes to show that this is now a recognised strategy not only for economic betterment of the rural poor by making credit easily available to them, but also to more effectively utilise the hitherto unutilised potential of our institutional credit system.

The role of banks in the whole scheme of things cannot be overemphasised. One the important barriers this concept has managed to overcome is the attitude that the poor, especially the women, are not bankable. This has been able to prove both to the bankers as well as the poor women themselves that given the right pre-credit inputs and post-credit management, not only are they eager to access credit, they are also responsible about repayment of their dues. The Himachal Grameen Bank has, in fact, nurtured a group of its own at Dari and many more banks are now forthcoming insofar as interacting with groups and their financing is concerned.

There are also a lot of stories of women using SHG money to help their husbands and their families. Geeta Devi from Bhated helped her husband set up a vegetable shop. Brahmi Devi paid for her son’s typing lessons to help him get a job. Radhi Devi of Sakoh has helped finance her husband’s taxi. In some instances, the binding of the whole family to the SHG is poignant, as in the case of the ‘Satguru’ group of Rait, where after a woman died, her husband became the member, even though he was sole male member at that time, so that her dues could be paid back and the family could continue to benefit from it.

The above examples direct attention to another interesting fallout of this concept, which is gender empowerment. With women taking responsibility and assuming the role of an important, if not the sole contributor to the family income, it automatically paves the way for greater equality, respect and self-awareness. Also, the fact that rural and often semi-literate women take to banking, learn to maintain their records and accounts, visit banks to demand group and individual loans, keep track of loans taken and returned both within the group and to the bank while calculating interest also, is in itself a giant leap forward for our rural women. And then they become icons both within their families and their little societies. The SHG in many cases, becomes a beacon for community development. One group in Sakoh, renamed itself ‘Commando’, after being able to first successfully protest against and control public drunken behaviour, sometimes even of their own husbands, and then becoming a leader in small community development programmes like repair of local water sources etc. through group money.

It is not that SHGs present nice little rags to riches stories only. They show an alternative way to development using the resources that are already available.