Gender Impact and Breaking Myths - A short impact analysis - SHGs Succeed in Punjab Also - Written in 2008

 

Gender Impact and Breaking Myths - A short impact analysis - SHGs Succeed in Punjab Also - Written in 2008

DINESH K KAPILA (I would say even today it is better but not where it should be)

Punjab, the name is taken to imply a prosperous state where the concept of SHGs is alien and not required to the extent in the comparatively under developed parts of India. This is a myth; the concept is required, there is a deep hunger for credit and easy access to credit amongst its women and once shown the pathway; the concept is adopted enthusiastically. The only difference is in the quantum of funds sought for from banks or vide internal loaning as also subscribed to, both are higher than the conventional amounts in most parts of India. 

Normal subscriptions will often start at Rs 100/- per month; loans from banks would also start at Rs 25,000/- or so; but the overall concept is certainly adhered to. As DDM of Ropar and Nawanshahr Districts, as also SAS Nagar district subsequently after is was carved out, for a considerable time upto May 2009, it was my task to inculcate the concept from start and to initiate a collective drive with all stakeholders for forming and linking up SHGs. The three success stories below and the short  report on my interaction with members of SHGs would provide an insight into the SHG concept in Punjab, with the caveat that these are partially semi hilly districts with parts which lack in infrastructure as compared to some other parts of Punjab. The profile of the SHGs featured would change as the groups evolve over the years and officials involved move out on transfer, but the lessons learnt remain relevant. This has been illustrated in two parts; Part A contains the three success stories and Part B the report based on interactions with various SHGs.

It is to be noted that though the number of SHGs was over 2500 in these districts by 2009, they were however age profile wise on the younger side. This article would reflect the needs and aspirations of SHGs as they evolved so to say.  

NOTE - A couple of SHGs are showcased first and then the impact analysis as evident from interactions is attempted.  Of course later the MFIs would overtake the SHGs exponentially. But the essence as stated in the subsequent impact analysis is the same.  

PART A

Milking Profits: Rural Women & Dairying  -an initiative of Ambuja Cement Foundation ( ACF ) and NABARD Ropar - Punjab

The Ambuja Cement Foundation, encouraged by the success of various micro credit initiatives,  tried its hand at an income generating activity through the dairy route in a village where it was not a traditional vocation. Of the 32 SHGs promoted by ACF in District Ropar in collaboration with NABARD, the women of Arjun SHG in Village Alampur took-up the challenge. The members of the SHG, which was presided over by Smt.Surinder Kaur, had a saving of around Thirty thousand Rupees, which they saved @ Rs.50/- per member per month. Whilst taking an initiative, 13 women of the SHG joined by 9 other women of the village decided to form a Group to do Dairying collectively. The DDM NABARD was constantly interacted with and also sensitized the members of the group so as to encourage their initiation into this activity. Some members purchased the Cattle through their savings and also from the loans of Rs 25,000/- as also subsequently Rs.1.25 lakh that the Group availed from the Punjab Gramin Bank, Malikpur. The DDM NABARD played  an active role in facilitating the loan also from the PGB. The bottleneck after the loan was the marketing of the Milk. The traditional milk vendors were offering very low rates to the group. ACF thought of approaching the Punjab State Milk Marketing Federation (Milkfed), with its main plant located 50 kms away at SAS Nagar and a network of milk routes. The federation was initially reluctant to procure 60-70 liters of Milk, more so as the village was not on the milk route.  However, on ACF's persistence, the contact made by the DDM NABARD and with the intervention of their General Manager, it agreed to link the dairy group with their existing marketing network. The women now collect 150 liters of milk everyday after starting from 50 litres or so only at the earlier stage. The supply it to the Milkfed van at site, the role of the MILKFED and main animator in encouraging the group is commendable. The Milkfed has provided equipment worth Rs.15000/- to the Group for Milk-testing and storage. The group members now also get subsidized feed from Milkfed. Encouraged, now the ACF has formed a second group at Alampur, this group has also availed a loan of Rs 1 lakh to scale up the dairy activity further in the village. Incidentally, the traditional milk vendors are now offering higher rates for procuring milk but the members prefer the MILKFED. The group members are now motivated as also empowered, they do not mind ringing up officials directly for resolving any problems. Thus multiple agencies have come together voluntarily in a coordinated manner for putting in place an income generation activity and thereafter stabilizing it. The increase in self confidence of the women is tremendous, with the shyness exhibited at first now gone.  

 

MEHNDIPUR SHG AT NAWANSHAHR DISTRICT - PUNJAB -   PNB and CDPO ICDS

 

The Mehndipur SHG, functioning at village Mehndipur, District Nawanshahr has emerged as a major example of success amongst entrepreneurial SHGs by earning Rs 1150/- on an average per member within three years or so of its formation. This SHG focused upon entrepreneurial activities since its inception and is now a source of inspiration to other micro credit groups. The SHG, formed in June 2002, with 10 members, all from the scheduled castes, decided to save Rs 50/-  per month per member. Secondly, they decided to focus their energies and planning upon income generation right from their formation. The Group President ( Pradahan in local parlance ) is Smt Meena Rani and Secretary ( sakatr as they say here ) Smt Sarbjit Kaur. These two really steered the group very ably for over five years. The then CDPO ICDS, Nawanshahr District, Smt Charanjit Kaur and her staff invested considerable time and efforts alongside in guiding the group and motivating the members. The then Branch Manager of Punjab National Bank, Shri SK Puri, ( Branch Railway Road Nawanshahr ) also joined in subsequently in motivating the group. The DDM NABARD was associated at critical stages for motivating and guiding the group members in the initial stages.

The group had on formation a few members who knew about stitching and tailoring as also embroidery. They motivated the other members to join in and to learn from the members who already knew the activity. Secondly, the method of sharing income / losses transparently was also decide upon. This was to be on the level of skill and effort put in the activity - ranging from procuring orders to designing to actually cutting the dress. The level of competence would also be a criteria in deciding income distribution. The benefits of transparency and satisfaction resulting from it can be judged from the fact that no member has disputed the sharing arrangements or left the group. 

The group availed loans thrice from the PNB, in tranches of Rs 13,000/-, Rs 13,000/- and Rs 20,000/-  it pre paid all its loans in view of its very satisfactory income generation and the tendency of members to avoid paying interest outside the group. The total own savings of the group aggregated Rs 66,000/- within three years and these were primarily channeled into the business or in purveying credit to meet the day to day requirements of its members.

The group acquired 7 foot operated sewing machines from the bank loans - these are less cumbersome to use as per them. They meet at one house only for all their sewing operations. They obtain bulk orders from tailors in Nawanshahr Town ( 5 kms away ) and charge Rs 15 per piece as job work. They also obtain orders from villagers residing in and around them - upto even a few kilometers away - and charge nearly market driven rates, say Rs 50/- for a plain simple ladies suit. The level of quality can be judged from the fact that all tailors associated initially continue to place orders even today. This has resulted in an income ranging from Rs 1000/- to 1200/- per month per member normally as per the CDPO ICDS statement in October 2008. This income generation has boosted their economic status as also their self esteem considerably. The social benefits of their group dynamics and processes is also immense. They now look forward to inspiring other groups.

The role of the CDPO ICDS as also of the Branch Manager is also commendable. They have guided the group ably and the accounts maintenance of the group is also satisfactory. This was taught by the Branch Manager himself. The group members acknowledge their debt to both the officials. They state that it was their positive attitude and motivation - at the village and when interacting at their own offices - that inspired them during the initial hard days.     

 

3.  SHG Kalam : A multi- activity SHG with Enthusiasm.

This group was formed in the year 2000, then had A regular savings but no concept of internal loaning, thereafter it collapsed. Then it was revived again by the CDPO - ICDS Nawanshahr Block in Nawanshahr District, with 20 members and savings of Rs 50/- each. All members from a village called Kalam near Nawanshahr town, with a predominant presence of lower income families. The interaction with the SHG Members is a ride into excitement, they are all excitement and enthusiasm and state it was regrettable that they were unaware for a long time about the concept of micro credit. One member when asked by me around 2005 about the advantage of belonging to a group, stated succinctly that she fractured her leg, she was given Rs 2000/- immediately as assistance by the group at her residence, what more could be the usefulness. The Punjab National Bank ( PNB ) at Nawanshahr had formed a close association with the group and sanctioned Rs 40,000/- as cc limit to the group, of which the group drew Rs 20,000/-. Two members drew Rs 10,000/- each, one for a Beauty Parlour and the second to run a stitching business.  The group stated that the loans were given after due consideration and after assessing the capacity of the individuals.  The member who drew Rs 10,000/- for a stitching business was poor and the group deliberately encouraged her to evolve as an entrepreneur. Both Entrepreneurs were satisfied with their progress when last interacted with as also inquired from the CDPO ICDS. Three members entered into a contract with a shopkeeper for knitting woolen garments, some used internal loaning for admitting children to schools or for attending marriages, even pilgrimages. The group members are  literate and state that they attend all functions together, they enjoy being together and discuss family problems also in meetings. The feeling of belongingness is palpable in the group, this is the main success and aspect of this SHG. The group members have issued individual small diaries to each member as regards their funds status, there are no defaults to the bank and in case a member defaults to the group, then double interest has to be paid as penalty.  The demonstrative effect of the group is such that now more females in the nearby areas want to form groups.    

 

Part B.

Interaction with Women - Their Viewpoints, Profile and Requirements, and Impact of Proximity to Urban Areas

The interactions were at varies places in the districts -

(a) First, what would be really representative of what occurs in smaller villages dotting the kandi areas (dry semi hilly regions) in Punjab; - around 60-70 women had gathered at a function by a NGO, ASRA, from three villages near Anandpur Sahib town. Four SHGs formed there had become functional and had initiated internal loaning, as also started the process of establishing a relationship with banks. However, the following was lacking -

- Not a single woman - from amongst all present from age groups of approximately 18 to 45, was reading a newspaper or magazine. Reading was strictly religious, if at all.

- There was no awareness about products of banks, either of asset or liability classification.

-  Literacy was upto class VIII normally with a few matriculates, but literacy skills were lost due to lack of application.

- A felt need for subsidy or grants from the government was maximum.

- No knowledge of insurance as a method to minimize risks was known or found amongst them.

- Small credit needs for consumption expenditure was found to be the main demand.

- Entertainment vide TV was common but with a religious bias, quite regulated and minimal emphasis on current affairs etc.

- The NGO and CDPO faced problems in accessing the villages in kandi areas due to distances, transport issues and banks being located only on the main highway.

(b) At a village in district Nawanshahr, near an industrial belt, where a major commercial bank had decided to be pro active; it was found that -

- Small credit needs, specially for operations - say Rs 7000/-, a washing machine for Rs 15,000/-; Rs 5000/- for three women to start making detergent powders, Rs 25,000/- to stock items at a shop, Rs 50,000/- to repair a house etc. were the main demands. Dairy animals to be added by individual members was another demand from members of SHGs. The bankers reaction at branch head level was interesting in that where ever he found that the husband had a sound credit record and a tangible security, he was ready to state that the loan could be sanctioned, but was extremely reluctant to entertain requests for even Rs 5000/- or Rs 7000/- as loans in the absence of any tangible security, even if the husband had a job as a contractual employee at a factory nearby earning him Rs 4500/- per month. The branch head apprehended that the contractor could dispense with the employee any time and the loan would be non recoverable. These are the realities of rural financial markets. The Branch Head’s apprehension was consistent even when his Regional Head was making commitments of financing to the women.  This is representative of the major barrier - the bankers, particularly from commercial banks, on rural postings, are not used to handling micro loans which are collateral free.

At this village the CDPO ICDS had formed 10 SHGs and there were two SGSY groups formed by the DRDA, however, though migrant labour was present in large numbers, the female family members were getting minimal access to SHGs and credit, the major reason stated as that the capital was not secure as they could shift base anytime. This when they had been there for five to ten years. Even bankers were found reluctant to entertain them. The NGO SSMES was also working in this village.  

(c). At villages near Chamkaur Sahib and near Daburji, which are partially urbanised and have a more aware profile, women were found to be extremely desirous of earning and adding to the family incomes. Education levels and general awareness levels are generally higher near small towns. Members of SHGs are raising funds by subscribing Rs 100/- to Rs 200/- a month and this ultimately results in a reluctance to avail bank loans as their own funds are found to be sufficient for meeting limited consumption needs.  At these areas, a large number of SHGs had been formed by the NGOs SSMES (over 100 SHGs) and Ambuja Cement Foundation (60 + SHGs) as also CDPOs of Ropar and Chamkaur Sahib Blocks; over 250 SHGs were functional.  

(d) Social mores however continue to be a strong negative influence as regards women, specially enforced by the established opinion makers at villages, at the level of sarpanch / ex sarpanch etc.  Even the police is observed to be biased against women in noting complaints from them. Social power structures continue to be vested with men even if the women are elected to certain positions - the women concede this reality readily. In addition, as some women replied to a specific query - on a male child's birthday, if male; sweets could be distributed but for a female child; a prayer at the local religious place was enough.  Across Ropar, while travelling in the kandi areas with the NGOs RHDC or ASRA or the CDPOs or whether in the highly productive plains with SSMES or ACF or CDPOs; the gender discrimination is conceded as reality in institutional terms by women. The women support SHGs as this facilitates access to empowerment and a collective approach to problems. At a village near Nurpur Bedi, women members of SHGs got together and coerced the police station to register cases against some influential families in land dispute. This had given them immense encouragement. 

(e). Bankers, generally from commercial banks, are found to be still averse to extending loans to SHGs for consumption loans and are fixated with a stress on income generation efforts being connected with the extension of the loans to SHGs. Loans even of Rs 40,000/- to Rs 50,000/- are not sanctioned or delayed on this account at times. The Regional Rural Bank however was noted to have a very sound record in general as regards the loans to SHGs and encouragement to this sector as also many branches of the cooperative bank. As regards commercial banks, it is individual led efforts which stand out more than an institutionalized approach.

A frequent reason given is that with a high credit profile and average deposits of Rs10.00 crore to Rs 12.00 crore even at a small branch, loans of a higher quantum were only profitable for the branch.  

(f). Incidentally, even if migrant labour has been present for 10-12 years at a single location, access to any banking service is uniformly denied normally, to men or women as the case maybe.

(g). Rural women, once aware and trained in financial literacy - specially rates of interest and fixing installments -  are found to generally demonstrate a higher degree of financial literacy and awareness as also discipline than the men by NGOs. Women were also found to be serious in learning the concept and adopting it. The deep felt need of these women to access credit and opportunities can only be felt and understood by interaction.

(h). Marketing facilitation is a major demand by SHG members as social mores prevent many from considering venturing out to even nearby towns for marketing their products.  Quality of products remains a gray area though individual success stories are occurring. This is a major area of concern as groups evolve. With major corporates launching products at multiple price points in villages in Punjab, marketing is a gray area.

Summarized Comments / Observations.

1. There is a still a marked tendency to use the services of informal intermediaries amongst marginal farmers and rural women to approach banks / other service providers, specially amongst those who own marginal holdings or are semi literate. Bankers with sound relationship building skills fare much better in building up effective business profiles in rural areas.       

2. Ruralites would prefer a mix of the moneylenders informality and formal systems and procedures of banks, this needs a reorientation in mindset and policies / procedures of banks.   

3. Literacy profiles need extensive capacity building; literacy has to be attuned to the day to day requirements, this will enable women to be empowered. Financial literacy is limited as of now even at times amongst the better off segment of women. Higher awareness / literacy levels would also reduce the acute dependency on the opinion makers / influence makers by women.

4. Gender discrimination as regards women is a reality and needs to  be acknowledged. Extensive campaigns to overcome entrenched social barriers are required.       

5. Women certainly require to be mobilized into SHGs and the existing SHGs require a qualitative upgradation also for enhanced empowerment and higher credit flow. Commercial banks have  to be guided not to insist upon income generation training activities by SHGs while extending loans to SHGs, 

 

In addition to the above, a deep hunger for economic progress and financial prosperity is noticed very clearly amongst women in rural areas coupled with a strong desire for infrastructural amenities. Commitment, demonstrated by frequent interaction by the DC / ADC was also found to be strong motivational influence.

DKK

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