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Dinesh K Kapila
Breaking Myths - SHGs Succeed in Punjab Also - An Impact Analysis
By Dinesh K Kapila
Punjab, the name is taken to imply a prosperous state where the concept of SHGs is alien and not required as 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, if any, 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 or the demand for a loan would also start at Rs 25,000/- or so; but the overall concept is certainly adhered to.
The normal perception around 2000-02 was that Punjab could not have a vibrant SHG movement, however, field level experience based on efforts to grow the movement since then indicates that within the economic success of Punjab, the women are still in need of empowerment and look forward to being members of SHGs, once the concept is understood and internalized. The three success stories below and the short report on the varied interactions with SHGs and officials that follows 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 regions of Punjab. The profile of the SHGs featured would have changed 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. It is to be noted that though the number of SHGs is over 2500 in Rupnanagr and Nawanshahr 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.
PART A
Success Story One - Milking Profits: Rural Women & Dairying - an initiative of Ambuja Cement Foundation ( ACF ) and NABARD at Ropar
The Ambuja Cement Foundation, encouraged by its success in 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 with active sensitisation by ACF. 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. While 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. Some members purchased Cattle through their savings and also from the loan of Rs 25,000/- and subsequently Rs.1.25 lakh that the Group availed from the Punjab Gramin Bank, Malikpur. The PGB reached out positively to the group members and encouraged them. The bottleneck after availing the loan was the marketing of the Milk as the traditional milk vendors were offering very low rates to the group. The ACF the approached the Punjab Milkfed, with its main plant located 50 kms away at SAS Nagar as it had an immense network of milk routes. The federation was initially reluctant to procure only 60-70 liters of Milk, more so as the village was not on the milk route. However, on ACF's sincere follow up, it agreed to link the dairy group with their existing marketing network. The women by 2008 were collecting 150 liters of milk everyday after starting from 50 litres or so only in 2007. They supply it to the Milkfed van at site, in fact later the MILKFED placed an animator in the general area to guide the group. The Milkfed also provided equipment worth Rs.15000/- to the Group for Milk-testing and storage and later supplied subsidized feed also. Encouraged, the ACF formed a second dairy group at Alampur, this group has also availed a loan of Rs 1 lakh from the PGB, the dairy activity is thus scaling up at the village. Incidentally, the traditional milk vendors later started offering higher rates for procuring milk but the members preferred the MILKFED. The group members are now distinctly motivated as also empowered, they do not mind ringing up officials directly for resolving any problems. The increase in self confidence of the women is tremendous, with the shyness exhibited at first now gone. The milk collection time at dawn and dusk is most motivating, as women walk across confidently to the milk collection centre, get the testing done and recorded, gossip & exchange notes etc. The successful initiative indicates that multiple agencies can come together voluntarily in a coordinated manner for putting in place an income generation activity and thereafter stabilizing it.
Success Story Two - Mehndipur SHG at Nawanshahr District - Punjab -
The Mehndipur SHG, functioning at village Mehndipur, District Nawanshahr 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 became a source of inspiration to other 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 ) Smt Meena Rani and Secretary ( sakatr as they say) Smt Sarbjit Kaur led the planning and steered the group very ably. 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 group had on formation a few members who knew the skill of stitching and tailoring as also embroidery. They motivated the other members to join in and to learn 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 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 meeting the varied credit 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 continued to place orders subsequently. This resulted in an income ranging from Rs 1000/- to 1200/- per month per member. Income generation has boosted their economic status as also their self esteem considerably. They now look forward to inspiring other groups.
The role of the CDPO ICDS as also of the Branch Manager is equally commendable. They have guided the group ably and the maintenance of accounts of the group is also satisfactory. This was taught by the Branch Manager himself. The group members state that it was their positive attitude and motivation - at the village and when interacting at their offices - that inspired them during the initial hard days.
Success Story Three - SHG Kalam : A multi- activity SHG with Infectious Enthusiasm.
This group was formed in the year 2000, then had 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 are from a village called Kalam near Nawanshahr town, with a predominant presence of lower income families. The interaction with SHG Members is stimulating, 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 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 interacted with. 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 (normally Class X) 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 has been immense.
Part B.
Interaction with Women - Their Viewpoints, Profile and Requirements, and Impact of Proximity to Urban Areas & Interaction with Officials
(a) First, what would be really representative of residents of 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 noticed -
- 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 amongst members.
- The knowledge of (micro) insurance as a method to minimize risks was unknown or not 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. 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 services could be dispensed with 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 but even they found it difficult to purvey credit to the migrant labour or their wives.
(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 mostly sufficient for meeting 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. Similar was the experience with REEDS near Kharar.
(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 sanction of loans to SHGs. Loans even of Rs 40,000/- to Rs 50,000/- are sanctioned at times after persuasion by animatots. The Regional Rural Bank however was noted to have a very sound record in general as regards the loans and encouragement to SHGs and this applied to most branches of the district cooperative bank also. As regards commercial banks, it was individual led efforts which stood out more than an institutionalized approach. A frequent reason given by most PSU Bank officials for a lower preference for loans to SHGs was 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.
(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 and CDPOs in three districts. 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 affordable multiple price points in villages in Punjab, marketing is a gray area.
(i) Transfers affect performance and relationships, at a major branch of a PSU Bank, the Branch Head extended a loan of Rs 2.50 lakh to a General SHG for consumption expenditure based on its high savings, his transfer resulted in an immediate slow down as the successor was from another state & used to extending loans of a small amount. The women members of SHGs affiliated to the branch were from SHGs with savings of Rs 50,000/- to Rs 80,000/- and desired loans of a higher quantum. This created a dissonance and often required intervention from external stakeholders for an amicable resolution.
(j). Subsidy through SGSY is limited in Punjab due to lower poverty but creates an adverse impact at times by creating a demand for subsidy from General SHGs. (an interesting sidelight; the subsidy component in SGSY was explained by block sevikas as "ik maaj de naal duji free" that is, "with one buffalo one comes free" !!).
(k). At varied branches of commercial banks, it was observed some times that controlling offices were not including credit linkages of SHGs in the analysis of performance parameters or the rules as applicable to SGSY was often mixed up with rules for general SHGs. This caused delays in disbursement of credit and complaints from members of general SHGs often filtered up or were expressed at open house meetings.
(l). Commitment, demonstrated by frequent interaction by the DC / ADC and the other senior district level functionaries, was also found to be strong motivational influence. The caveat here is that the government officials must know the overall concept in a competent manner to prevent any communication gaps.
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.
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No reproduction without due permission.
I worked in this area for a long time as a developmental banker, hence the viewpoints / insights as above.
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