THEORETICAL FRAMEWORK OF THE STUDY -...

Theoretical Framework of the Study

47

CChhaapptteerr 22

TTHHEEOORREETTIICCAALL FFRRAAMMEEWWOORRKK OOFF TTHHEE SSTTUUDDYY 2.1 Introduction 2.2 Micro finance and Self-Help Groups in India 2.3 Income-generation activities of SHGs 2.4 Swarnjayanti Gram Swarojgar Yojana 2.5 Marketing Initiatives under SGSY 2.6 Training under SGSY 2.7 Support of NABARD 2.8 Models of bank linkage in India 2.9 Role of NGOs 2.10 Self-Help Groups in Kerala 2.11 The Kudumbashree Programme in Kerala 2.12 Economic Development Programmmes of Kudumbashree 2.13 Marketing Initiatives of Kudumbashree 2.14 The Concept of Women's Empowerment

2.1 Introduction

The emergence and rapid multiplication of Self-Help Groups based on

micro-credit is a phenomenon that is gaining increasing importance in the

development scenario. SHGs are being viewed by Government and NGOs as a

strategy for both women’s empowerment and poverty reduction. The experience

of SHGs has shown that they have provided improved access to credit. Poor

women are now perceived by the mainstream financial sector as creditworthy.

Women have used savings and credit for needs such as those related to education

and health, and, in particular, crisis-related needs. Participation in SHGs has

meant opportunities related to mobility and a legitimate space in the public realm

for leaders of SHGs (S.M Feroze and A.K Chouhan).

Co

nt

en

ts

Chapter 2

48

The Self-Help Group is a homogenous group formed by 10-20 members

of poor households having similar objectives, aims and aspirations. The SHGs

are formed on the principles of self-help to promote individuals through

collective action in areas of augmenting income, gaining easier access to credit

and other resources, and increasing their bargaining power. Each homogeneous

group meets monthly or weekly close to the members’ homes. All members

save a commonly agreed amount at that meeting. In order to leverage a group

loan, they deposit this collected amount in a bank. In cases of emergency,

members can take a loan from the group fund. The basic philosophy lies in the

fact that shortcomings and weaknesses at the individual level are overcome by

the collective responsibility and security afforded by the formation of a group

of such individuals (Zubair Meenai - 2010).

The collective coming together of individual members is also used for

education and awareness building, collective bargaining power and peer pressure

among others. As the groups mature, they initiate income enhancement and

entrepreneurial activities like, Agriculture nurseries, Diary development, Petty

shop management, Wooden products, Soap and detergent units, Vegetable

cultivation and marketing, Umbrella making, etc.. These can be both individual

and at group level. Groups also start connecting with other groups in the area and

start the process of cluster formation, networking and federating, thus acquiring a

large status and becoming a large pressure group operating in an enhanced sphere.

Among all the managerial functions, marketing function is one of the

important and challenging functions of the business. Marketing poses a major

problem both of raw materials and of finished goods. To cope with the

competition in the market, advertising and publicity of the products become

indispensable and that again involve heavy funding. The small entrepreneurs

do not know anything about the trends in markets, do not have R&D facilities,


49

knowhow for improving designs and quality; nor do they know the technicalities

of pricing, etc. It has been observed that most of women entrepreneurs could not

continue with their business or trade activity for want of guidance on consumer

demand and market mechanism. Women entrepreneurs depend mainly on the

customers as a means to advertise their products. As a majority of the Self-

Help Groups are women Self-Help Groups, they are also facing these problems.

Some kind of organized marketing initiatives are needed to be evolved (Anil

Kumar - 2004).

2.2 Micro finance and Self-Help Groups in India

Micro-Finance is a term used to refer to an activity on provision of financial

services to clients who are excluded from the traditional financial system on

account of their lower economic status. These financial services will most

commonly take the form of loans and micro-savings, though some micro-finance

institutes will offer other services such as micro-insurance and payment services.

Generally, micro-finance groups in India are called Self-Help Groups (SHGs)

promoted both by the Government and the non-governmental organizations.

The concept of self-help groups can be traced back to the Gandhian

Grama Swaraj movement; the success of the Bangladesh Grameen Bank,

started by Prof. Mohammed Yunus in 1976, triggered momentum to the

concept. The SHG provides the poor with alternative means of obtaining

economic and social entitlement to resources through their active participation.

SHGs are formed on voluntary basis, and are perceived appropriately as

people's institution, providing the poor with the space and support necessary to

take effective steps towards greater control over their lives in private and in

society. Initially, SHGs were organized for savings mobilization and thrift

operation among the poor and later, they started taking up income-generating

Chapter 2

50

activities like farming, agro-processing and other micro-enterprises (Lina Joy,

A. Prema and S. Krishnan - 2008). Each group acts like a bank, and decides

the internal operations of the group in the distribution of loans, monitors the

utilisation of loan amount and enforces repayment. Generally, the group

disburses the loan amount among the members according to the criteria arrived

at by the members. The members borrow both for consumption and for

productive purposes. As the group attains maturity in due course of time and

the common pool of resources of the group, i.e., savings become insufficient

for meeting the varied credit demands of the members, the group applies for

external assistance mostly from banks under the NABARD bank linkage

programme although other avenues are also emerging of late.

There are differences between Grameen Bank model of Bangladesh and

SHGs established and spread throughout India. Grameen groups are relatively

smaller in size as they consist of five members, whereas membership of SHGs

is 10 to 20. Unlike the Grameen Bank of Bangladesh, SHG has its own credit

fund for relending and the initial lendings are made through internal savings

contributed by the members. Moreover, the SHG is considered as the ultimate

lender and can be perceived as a micro-finance institution, whereas Grameen

Bank groups do not normally have resources at their disposal. Members' thrift

is deposited in the financial institution which has a federating structure, and

such funds are lent to the members of Grameen Banks. As a result, after some

time, the SHG may have enough capital to meet the financial requirements of

its members and may not require any borrowing from financial institutions.

Therefore, SHGs can be considered as independent institutions, if they

mobilise sufficient funds for disbursal among members. On the other hand,

Grameen Bank group members have to depend on an outside financial

institution for credit, as long as they maintain thrift in the federation.


51

In addition to the usual functions of micro-finance groups such as

savings, credit and insurance, SHGs engage in issues of social significance.

These are small groups of 10-20 members. In India, almost 90 per cent of the

groups comprise only women. The concept of SHG is wider, and is not the

same as the micro-finance group. In the context of micro-finance, an SHG

consists of 10-15 members. SHG members can be both men and women.

However, 90 per cent of the SHGs in India have only women as their members

(NABARD 2004), who periodically contribute a fixed amount of savings and

borrow from the fund thus created.

In most of the cases, the formation of SHGs has been facilitated by the

NGOs, although the Government has also been an active player. NGOs have a

role in bringing about the collaborative linkage between banks and groups.

They act as both facilitators and micro-finance institutions. As facilitating

institutions, NGOs organise the poor into groups, undertake training for them,

help in arranging inputs, extension and marketing, introduce saving and

internal lending, help in the maintenance of accounts, and link them with the

banks for credit requirements. Here, banks directly provide credit to the SHGs

with the NGOs' recommendations. In the second case, where the NGOs work

as MFI (Micro-Finance Institution), they have to undertake some additional

functions besides the function as a facilitator. Here, the loan is given to the

NGOs, for on-lending to the SHGs/ individual poor. The NGOs will be legally

responsible for repayment to the banks and will be bearing the risk in cases

of non-payment. The experiences of both NGOs and banks show that micro-

finance groups have two distinct phases, pre-formation and post-formation.

Pre-formation phase includes, identification of the village and target group,

providing awareness to the members identified on the importance of groups

and motivating them to come together. In the post-formation phase, conflicts

Chapter 2

52

between individual interests and the group interests are resolved. The set of

procedures to be followed by the group, rules to be adhered to by the members,

and the roles to be played by the leaders are arrived at by intense discussion

among the members in the groups.

Even though the NGOs have played a prominent role in the promotion of

SHGs, often the poorest were finding it difficult to gain membership in the

programme. It is observed that the NGOs, which obtained better understanding

of the situation of the area in which they were working, did well in the

formation of micro finance groups.

The cumulative savings of SHGs in India with various banks reveal that, as

on March 2011, the total amount saved was ` 7016.30 crore (NABARD 2012).

This unprecedented growth of savings and lending operations among the poor

changed the hitherto notion that the poorest cannot save and are not creditworthy.

Table 2.1 Progress of SHG programme in India

Year Bank loans to SHGs

Cumulative ` (Crore)

Cumulative number of SHGs

Bank Loan per SHG (`)

2001 480.87 263825 19315 2002 1026.34 461478 27597 2003 2048.67 717360 39953 2004 3904.20 1079091 51296 2005 6898.46 1618456 55515 2006 11375.50 2238565 72552 2007 12366.49 2894505 59417 2008 16999.90 3625941 72076 2009 22679.84 4224338 76128 2010 37133.14 5811160 91083 2011 31221.60 4787000 65222 2012 36340.00 4354000 83464

(Source: NABARD Annual Report- Various years)


53

From the above Table, it is clear that there is a tremendous increase in

the number of SHGs linked with banks. The cumulative bank loan provided to

banks in 2001 was ` 480.87 crore, which multiplied to an amount of ` 36340

crore in 2012. The cumulative number of SHGs that availed the respective

loan increased from 263825 in 2001 to 4354000 in 2012. The loan availed

per SHG increased from ` 19315 in 2001 to ` 83464 in 2012. To assess the

growth rate in the number of SHGs in India, actual data taken from the

NABARD (National Bank for Agriculture and Rural Development), during

the ten years from 2000 to 2010 is used and the results are presented in the

following Figure.


Figure 2.1 Progress of SHG Programme in India from 2001 to 2012

The number of SHGs in India increased from 263825 to 4354000 over a

period of twelve years from 2001 to 2012. The data over this period seem to

show an exponential growth in the number of SHGs in Kerala. Using the

function, y= aebx, the equation estimated using regression tool, results in

b=0.331, a=25255 which is valid with a significant R2 value, 0.972. To further

Chapter 2

54

add an explanation, the initial number in SHGs is expected to be at the rate of ‘b’.

Now the progress of SHGs in terms of bank loan availed is given below.


Figure 2.2 Bank loan per SHG

The bank loan given to each SHG during the ten years from 2001 to

2010 shows an increasing trend. The rate of growth can be well established

with a linear trend with b=7197 and a=16905 with a significant R2 value of

0.927. It implies that the bank loan given per SHG is expected to grow at a

linear rate of ` 7197 over the period from 2001 to 2010.

Table 2.2 Bank loan outstanding against SHGs in India (Cumulative)

Year No of SHGs Loan outstanding (Cr)

Up to 2007 2894505 12366.49

31.03.2008 3625941 16999.91

31.03.2009 4224338 22679.84

31.03.2010 4851356 28038.28

31.03.2011 4786763 31221.16 (Source: NABARD Annual Report- Various years)


55


Figure 2.3 Bank loan outstanding

The bank loan outstanding shows an increasing trend. The rate of

growth can be well established with a linear trend with b=4874 and a=7636

with a significant R2 value, 0.992. It implies that the bank loan given per SHG

is expected to grow at a linear rate of `4874 crore over the period.

The above Table shows the cumulative bank loan outstanding in India

over the period reveals that the total number of SHGs linked with various

banks increased to 47.87 lakh as on 31st March 2011. It also shows that the

cumulative loan amount outstanding to the SHGs by the various financial

institutions was ` 12366.49 crore in the year 2007, which had a manifold

increase to ` 31221.16 crore as on 31.03.2011. It indicates that the growth of

linkage was tremendous.

Chapter 2

56

Table 2.3 Savings of SHGs with banks- Region-Wise (As on 31.03.2011)

Region Number of SHGs Savings (In Crore)

Northern Region 372772 (4.99) 328.57 (4.699)

North Eastern Region 324739 (4.35) 131.04 (1.87)

Eastern Region 1527618 (20.47) 1408.38 (20.07)

Central Region 786436 (10.54) 603.38 (8.60)

Western Region 960921 (12.88) 829.01 (11.82)

Southern Region 3489460 (46.77) 3715.92 (52.95)

Total 7461946 (100) 7016.30 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.

The above Table reveals the region-wise savings of SHGs with various

banks. The number of SHGs keeping savings with banks in northern, north-

eastern, eastern, central, western and southern regions constituted 4.99 per cent,

4.35 per cent, 20.47 per cent, 10.54 per cent, 12.88 per cent and 46.77 per cent

respectively. The savings with banks constituted 4.699 per cent, 1.87 per cent,

20.07 per cent, 8.60 per cent, 11.82 per cent and 52.95 per cent respectively in

northern, north-eastern, eastern, central, western and southern regions. The

southern region of the country dominate the other regions with 47 per cent of

the total SHGs and with ` 3715.92 crore of the total savings amount, followed

by the eastern region with 20 per cent in the number of SHGs and ` 1408.38

in the amount of savings with banks.


57

Table 2.4 Bank loan outstanding as on 31.03.2011 (Region-wise position)

Region Number of SHGs Loan amount outstanding (Crore)

Northern Region 149108 (3.11) 903.14 (2.90) North Eastern Region 150021 (3.13) 695.25 (2.23) Eastern Region 1105533 (23.10) 4202.55 (13.46) Central Region 358872 (7.5) 2365.40 (7.57) Western Region 316821 (6.62) 1246.23 (3.99) Southern Region 2706408 (56.54) 21808.59 (69.85)

Total 4786763 (100) 31221.16 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.

(Source: NABARD. Status of Micro finance in India 2012)

Figure 2.4 Region-wise Bank loan outstanding

The above Table and pie chart reveal the region-wise amount of bank

loan outstanding with various banks. The number of SHGs’ outstanding loan

with banks in northern, north-eastern, eastern, central, western and southern

regions constituted 3.11 per cent, 3.13 per cent, 23.10 per cent, 7.5 per cent,

6.62 per cent and 56.54 per cent respectively. The amount of loan outstanding

with banks constituted 2.90 per cent, 2.23 per cent, 13.46 per cent, 7.57 per cent,

Chapter 2

58

3.99 per cent and 69.85 per cent respectively in northern, north-eastern,

eastern, central, western and southern regions. The southern region of the

country dominated the other regions with 57 per cent of the total SHGs

outstanding and with ` 21808.59 crore of the total amount outstanding,

followed by the eastern region with 23.10 per cent in the number of SHGs

outstanding and ` 4202.55 in the amount of loan outstanding with banks.

Table 2.5 Total Savings of SHGs with banks- Agency-wise (31.03.2011)

Name of Agency Number of SHGs Total savings (Crore) Commercial Banks 4323473 4230.06 (60.28) Co-operative Banks 1155076 1350.84 (19.26) Regional Rural Banks 1983397 1435.40 (20.46)

Total 7461946 7016.30 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.

The above Table reveals the agency-wise position of total savings of

SHGs with the different types of banks. It is evident that the commercial banks

have the major share of savings of the SHGs with 60.28 per cent of the total

savings amount. Co-operative banks and Regional Rural banks hold 19.26 per

cent and 20.46 per cent of the total savings. It is evident that the performance

of commercial banks regarding the deposit holding is excellent.

Table 2.6 Bank loan outstanding against SHGs-Agency-wise (31.03.2011)

Name of Agency Number of SHGs Total Loan outstanding (Crore) Commercial Banks 3053472 21883.25 (70.09) Co-operative Banks 451798 1907.86 (6.11) Regional Rural Banks 1281493 7430.05 (23.80)

Total 4786763 31221.16 (100) (Source: NABARD. Status of Micro finance in India 2012) Note: Figures in parenthesis represent percentage to total of respective rows.


59

The analysis of bank loan outstanding, agency-wise, reveals that out of the

total loan outstanding, 70.09 per cent was provided by Commercial banks. The

Co-operative banks provided 6.11 per cent and the Regional Rural banks provided

23.80 per cent of the total loans to the SHGs. It is clear that commercial banks are

playing an important role in the issuing of loans to the SHGs.

2.3 Income-generation activities of SHGs

Economic activity is not an end in itself but a means to an end. The

members of the Self-Help Groups that received assistance from the banks are

involved individually or collectively in income-generating activities. The

members are taking up economic activities in their own interest and they

prefer traditional activities in which they are well-versed than new activities.

The activities taken up by the Self-Help Groups in Kerala include Petty shop

management, Canteen, Food processing, Animal husbandry, Fisheries, Copra

processing, Agriculture nurseries, Diary development, Wooden products,

Tender coconut selling, Soap and detergent unit, Vegetable cultivation and

marketing, Umbrella making, Aquaculture, Hand-looming, Poultry, Coir

products making, Tailoring and Garment making, Communal farming, Banana

culture, Metal crushing and hollow bricks, Rice flour production and curry

powder, Handicraft making, Fish and meat stall, Beauty parlour management,

Female hygiene products, Paper products, Bed and pillow making, Ready

made garments, Leather product making, Bakery and sweet items, Mussel

culture, Printing press and Book binding, etc.

The guiding principles of Self-Help Groups - achieving rural development

through self-development of individual members, aim to increase productivity

of labour and other resources, popularizing ‘Thrift’ concept as a foundation for

socioeconomic development, and ‘Credit’ as a tool for development, to foster

Chapter 2

60

an entrepreneurial culture where each member realizes that they need the

support of the group to achieve their objectives. Self-Help Groups create and

include participatory and empowering culture. They also create benefit of

economies of scale by reducing cost in certain areas of production process,

which the members may decide to undertake as a common action. If the loan

taken from the SHG is invested in some productive activity, then surely it is

contributing towards alleviation of poverty. If the loan is spent on consumer

durables like homes, then also it is contributing towards alleviation of poverty.

But simply if the loan amount is simply spent on current consumption, then it

may deteriorate the economic condition of the clients.

Micro-finance programme is not fully devoid of defects. It has certain

problems and challenges in the course of its development. Often, the borrowers

face problems of identifying those economic activities that yield a rate of profit

necessary to cover the interest rate on loans. Even though the programme is

meant for the promotion of income-generating activities through the provision

of loans, members are finding it difficult to find economically remunerative

and productive activities. A risk-aversive character is quite observable among

the members, where they restrict themselves to non-farm activities, which are

traditional and less remunerative (Rajasekhar 2005). Moreover, there are

problems of getting loans on time, difficulty of getting raw materials, skilled

labour and marketing opportunities. Their problems continue even after

producing output, especially while finding a marketing outlet for their produce

(Madheswaran and Dharmadhikari 200I).

2.4 Swarnjayanti Gram Swarojgar Yojana

The Swarnjayanti Gram Swarojgar Yojana (SGSY) is a major government

programme for the self-employment of the rural poor. The programme was started


61

on 01.04.1999 after restructuring and merging the erstwhile Integrated Rural

Development Programme (IRDP) and its allied programmes, such as Training of

Rural Youth for Self Employment (TRYSEM), Development of Women and

Children in Rural Areas (DWCRA), Supply of Toolkits in Rural Areas (SITRA)

and Ganga Kalyan Yojana (GKY), besides Million Wells Scheme (MWS). The

basic objective of the SGSY is to bring the assisted poor families (Swarojgaris)

above the Poverty Line by providing them income-generating assets through a

mix of bank credit and governmental subsidy. The programme aims at

establishing a large number of micro-enterprises in rural areas based on the ability

of the poor and the potential of each area.

Table 2.7 Performance of SHGs under SGSY

Sl.no. Items 2011-12 (Up to Dec.2011)

Since inception

(i) No. of SHGs formed 1.68 lakh 42.69 lakh

(ii) SHGs taking up economic activities 1.68 lakh 13.71 lakh

(iii) Women swarojgaries assisted 7.23 (69) 105.21 (60.6)

(iv) Subsidy disbursed 1089.55 crore 13860 crore

(v) Credit disbursed 2746.75 crore 30174 crore (Source: Annual report-2011-12, DRDA)

During 2010-11, out of the total 21.09 lakh Swarojgaris assisted, about

14.24 lakh were women Swarojgaris, which number constitutes around

67.49 per cent of the total Swarojgaris assisted. The SGSY is emerging as a

women-centric programme. The guidelines of the programme stipulate, inter

alia, that at least 40 per cent of the Swarojgaris will be women and 50 per cent

of all SHGs in a district will be women SHGs (DRDA 2011). With the present

experience under the SGSY, it has been noticed that the scheme has naturally

emerged as a women-led programme and, in the pockets where the programme

Chapter 2

62

has been successfully implemented, it has resulted in visible social and economic

empowerment of women.

Close coordination between different agencies responsible for the

implementation of SGSY is critical for the success of the programme. In order to

ensure coordination amongst rural development functionaries, Bankers and PRIs

etc. Various Committees are constituted under SGSY at the Central Level. The

Central Level Coordination Committee (CLCC) has been constituted to review

and ensure effective implementation of the programme. It consists of

representatives from State Governments and various Banks to discuss the

progress of the programme. Likewise, at the State Level, State Level Bankers’

Committee (SLBC) has been constituted, which is required to meet every quarter

to ensure proper follow up and effective implementation of the programme. At

the District level, there are District SGSY Committees under the Chairmanship

of the District Collector/Chief Executive Officer, which are required to meet

every month to review the progress of SGSY and suggest corrective action

wherever necessary. There are Block level SGSY Committees in each Block,

which are required to meet once in a month.

2.5 Marketing Initiatives under SGSY

Marketing of products made by Self-Help Groups of SGSY is also a

major area of concern under the Programme. To facilitate marketing of the

products produced by SGSY Swarojgaris, requisite provisions have been made

in the guidelines of the scheme. SGSY emphasizes backward and forward

linkages of the activities to be tied up appropriately so as to ensure that the

products manufactured by Swarojgaris are able to compete in the market and

they derive adequate income to cross the poverty line. Necessary support may

be taken from Government and private agencies in order to provide the


63

backward and forward linkages to the groups / individual Swarojgaris of

SGSY.

2.6 Training under SGSY

SGSY is a process-oriented scheme which involves organization of the

rural poor into Self-Help Groups (SHGs), for their training and capacity

building to enable them to evolve into a self managed organization. Training

and capacity building of Swarojgaris is an important component of SGSY.

Under SGSY, 10 per cent of the financial allocation is earmarked for training

and skill development of Swarojgaris. Under SGSY, Basic Orientation is

provided to Swarojgaris for making them conversant with group dynamics in

an SHG, book-keeping, etc. In addition, Skill Development Training, in

identified activities is provided to Swarojgaris requiring additional skill

development / up-gradation of skills. The objective of this training is to ensure

that the Swarojgaris posseses the Minimum Skill Requirement (MSR). They

will be eligible for assistance only when they possess MSR, and loans will be

disbursed only when they have satisfactorily completed skill training. In

addition, it is important to provide suitable training to all stakeholders under

the programme, including facilitators/ Self-Help Promoting Institutions

(SHPIs), field level functionaries of banks and development functionaries of

the local government for ensuring successful implementation of the scheme. It

is beyond doubt that wherever these functionaries have been trained in the

concept of functioning of SHGs, group dynamics, guidelines of the scheme,

marketing and entrepreneurship development etc., the quality of groups as well

as the overall implementation of the programme has been qualitatively better.

A systematic review of SGSY has brought into focus certain shortcomings,

like vast regional variations in mobilization of rural poor; insufficient capacity

Chapter 2

64

building of beneficiaries; insufficient investments for building community

institutions; and weak linkages with banks, leading to low credit mobilization

and low repeat financing. Several states have not been able to fully utilize the

funds received under SGSY. Absence of aggregate institutions of the poor,

such as the SHG federations, precluded the poor from accessing higher-order

support services for productivity enhancement, marketing linkage, risk

management, etc. Several evaluation studies have shown that the SGSY

scheme has been relatively successful in alleviating rural poverty.

2.7 Support of NABARD

A Self-Help Group (SHG), as we know it today in India, is an outcome

of several experiments conducted at the Savings and Credit Management

Groups (SCMG), sponsored by Mysore Resettlement and Development

Agency (MYRADA). After experimentation with the cooperatives in some

projects, MYRADA felt that a shift top as an alternative credit system for the

poor was required along with the efforts to make the existing delivery system,

not only more appropriate and effective but also willing to accept and relate to

an alternative system with its own rules and management. It was in this

MYRADA project that National Bank for Agriculture and Rural Development

(NABARD) experimented the pilot project for the development of the SHG

system in India. In 1986-87, NABARD supported and funded an action-

research project on SCMG of MYRADA, for assessing its adequacy as an

instrument to help the target groups. The main objective of this pilot project

was to evolve supplementary credit strategies for meeting the credit needs

of the poor by combining flexibility, sensitivity, and responsiveness of

informal credit system with the financial resources of the formal credit

institutions.


65

During 1991-92, NABARD launched 92 pilot projects on linking SHGs

with Banks, in various parts of the country. In July 1991, the RBI advised the

banks to participate in the pilot project and to extend finance to SHGs as per

the norms and guidelines of NABARD. In February 1992, detailed guidelines

were issued to the commercial banks, explaining the modalities of the pilot

project. Later, the scheme was made applicable to RRBs and Cooperative

Banks in May 1993. The NABARD guidelines to banks for implementation of

the pilot project allowed ample flexibility to the participating banks to provide

innovative responses and observed variations in the grassroots level situations.

It aimed at providing credit to the informal SHGs of the rural poor, through the

banking system, with minimal documentation and simplified procedures.

2.8 Models of bank linkage in India

For the SHG system developed and promoted by NABARD, they took

the initiatives for linkage between SHGs and NGOs on the one hand, and the

banks on the other. Several models of SHG-Bank linkage programme were

tried out. As a result of these experiments, three most commonly used Models

throughout the country came into existence.

Model I: The SHGs were organized and promoted directly by Banks. The

bank provided credit in bulk directly to the SHG, which might be

an informal or formal body. The SHG, in turn, would undertake

on-lending to its members, on terms and conditions agreed upon

mutually among them. NABARD provided refinance assistance to

the lending Bank. In this Model there was no involvement of NGOs

Model II: NGOs organized and promoted the SHGs, and then referred those

SHGs to the Bank for lending directly either to the SHGs or to

individual members of the SHGs. Here, the NGO stood only as a

Chapter 2

66

support to both the Bank and the SHGs, for monitoring and

evaluation of the projects, proper functioning of the SHGs,

repayment of the loans, and provided training to members of

SHGs, etc. NABARD provided refinance to the lending Bank.

Model III: The SHGs were organized and promoted by NGO and then

referred to the Bank for linkage, and the Bank provided finance

directly to the NGO for on-lending either to the SHGs or to

individual members of SHGs. The NGO was fully responsible for

making sure the timely repayment of the loan to the Bank, with

proper monitoring and evaluation of the projects, as well as of the

proper functioning of the SHG, and training of members of the

SHG.

NABARD provided refinance to the lending Bank. As per NABARD, in

Kerala, there are 5,629 SHGs under Model I, 13,403 under Model II and

14, 696 SHGs under Model III, linked to various financial institutions like

Commercial Banks, Regional Rural Banks and Cooperative Banks (NABARD,

2003-2004)

2.9 Role of NGOs

As per the NABARD guidelines, the NGOs have been playing an active

role in fostering the growth of SHGs for furtherance of their basic objectives. It

has been observed that NGOs, as a fundamental principle of their developmental

role, always aim to make the rural poor economically self-sufficient through

development of individuals with group support of their fellow villagers. This

traditional concept took an interesting turn with the introduction of linkage of

the SHGs with the formal banking system, started by NABARD in India

through Pilot Project from the year 1991-92. Consequently, the role of NGOs


67

also assumed an additional dimension to economic uplift of the poor. In the

backdrop of these developments and the traditional promotional activities,

undertaken by the NGOs for the SHGs, the NGOs are expected to support the

SHGs in the following areas:

To motivate the rural people to organize themselves and to form

into self-help groups;

To form groups at the village level;

To educate and train the group members in managing the group

activities like maintenance of books of accounts, conducting

meetings, management of funds, etc.

To inculcate and promote thrift and savings habit among the group

members and to help in institution building along with the

development of the individual;

To help the SHG in identifying raw materials and local resources;

To help the group members to upgrade their skills and technology

to make the best use of resources;

To make available credit facilities and to act as a link between the

rural poor and the bank;

To educate and train the group members to utilize credit properly

and to improve their economic conditions;

To help the group members in exploring markets for their

products;

To work as facilitator in the meetings of the SHGs and

To act as friend, philosopher and guide to the SHGs.

Chapter 2

68

2.10 Self-Help Groups in Kerala

In India, SHGs are more prominent among the South Indian States like

Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. Each of these states has

its own government programme for the promotion of micro-finance and it is

called by different names, even though the internal operations of these

groups are the same. Some of these SHGs coming under each of the state

programmes have linked themselves to the banks under NABARD and it is

this programme which gave wide popularity to micro-finance in the country.

Kerala occupies a unique place among the States of India, as it achieved

success in poverty reduction over the past thirty years. This State has

attracted the attention of various scholars for its remarkable achievements in

social development indicators, in the absence of economic growth. As a state

in a third-world country like India, the attainments are comparable to those

of the developed countries of the world. Kerala's accomplishments reveal

that the well-being of the people can be improved and social, political and

cultural conditions can be transformed even at low levels of income, when

there is appropriate public action (Kannan 2000; Parayil 2000). This

reduction in poverty can be attributed to various factors, centred on public

action, state intervention, and an educated population. Poverty, however,

remains in Kerala.

The SHGs formed by NGOs, banks and government are playing an

important role in the development of the State. The SHG movement was

initiated in the State of Kerala on the basis of the success of SEWA of

Ahmadabad, MYRADA of Mysore, and several other experiences in the

country. The programme taken up and implemented in the right sense would

be very effective in eradicating poverty and enhancing women empowerment.

The SHGs in Kerala have made significant remarks in this area. Historically,


69

many church-based development institutions in Kerala have been promoting

credit unions, which organize the poor into large groups of 150 to 200 members

and pool their major savings for their common benefits. These credit unions

lacked the participatory decision-making found in SHGs. During the late

1980s, this drawback was realized and, under the guidance of NBARD, many

voluntary agencies recognized their credit unions as smaller and more

effective SHGs. During the late nineties, the Government of Kerala had

accepted the NHG model for eradication of poverty from the State by forming

Kudumbashree Mission under the Department of Local Self-Government. The

Kudumbashree Mission launched by the State Government, with the active

support of the Government of India and NABARD, had adopted a group

approach for wiping out absolute poverty through community-based

organisations. It had a three-tier structure with NHGs at the grassroots level, Area

Development Society (ADS) at the ward level, and Community Development

Society (CDS) at the Panchayath level.

Even though NHGs are engaged in issues of social significance through

the participation of women in grama sabhas, they give equal importance to the

promotion of thrift and credit, to facilitate the poor to save, and to provide

them cost-effective and easy credit. Thus, the thrift and credit enabled the

poorest without collateral security to acquire loans from small savings

contributed by them, who had been considered for a long time as unbanked.

The loans obtained from these groups provide an opportunity for them to

initiate small income-generating activities and thereby improve their income

and living standards. The NHGs are similar to SHGs in terms of their day-to-

day operations. Now, many agencies are coming forward to form SHGs for the

uplift of the weaker sections.

Chapter 2

70

Table 2.8 Growth of CDS and NHGs in Rural and Urban areas

Rural NHGs Urban NHGs

Year No of CDS No of NHGs No of CDS No of NHGs

2000 262 22308 58 7538

2001 880 101622 58 7848

2002 986 107745 58 7863

2003 990 122704 58 7947

2004 991 143983 58 8518

2005 991 153117 58 10687

2006 999 163426 59 11862

2007 999 168157 59 13279

2008 999 176200 59 13626

2009 999 180039 62 13982

2010 999 186792 62 14478

2011 999 195352 69 26348 (Source: Economic review-Planning commission, Kerala, various years)

From the above Table, it is observed that the Kudumbashree system is

more active in the rural areas. At the grass roots level, there is a substantial

increase in the growth of the NHGs. During the period from 2000 to 2011, the

number of NHGs in the rural areas rose from 22308 to 195352 groups and in

the urban areas it increased from 7538 to 26348 groups.


71

(Source: Economic review-Planning Commission, Kerala, various years)

Figure 2.5 Growth of NHGs in Rural areas

The growth of NHGs in rural areas during the twelve years from 2000 to

2011 shows an increasing trend. The rate of growth can be well established

with a linear trend with b=12330 and a=63309, with a significant R2 value,

0.829. It implies that the NHGs in rural area are expected to grow at a linear

rate of 12330 over the period from 2000 to 2011.

Figure 2.6 Growth of NHGs in Urban areas

Chapter 2

72

The number of Urban NHGs in Kerala increased from 7538 to 26348

over a period of twelve years from 2000 to 2011. The data over this period

seem to show an exponential growth in the number of NHGs in the urban areas

of Kerala. Using the function, y= aebx, the equation estimated using regression

tool, results in b=0.095, a=5997 which is valid with a significant R2 value,

0.865.

Table 2.9 Thrift and loans distributed through the rural NHGs

Year Families covered

Thrift collected ( ` )

Loan distributed ( ` )

2001 548349 84875980 21745532

2002 Na 1103142997 972370589

2003 2068227 1635202807 1981590544

2004 2462322 2879949978 5117085458

2005 2837977 4413895241 9686426420

2006 3020500 5949299905 14214712935

2007 3183529 7192300797 18250090968

2008 3243395 8480312526 21861166334

2009 3210392 9400550386 25039394539

2010 3311113 11930735665 32822548945

2011 3344102 1358640123 39731632226

(Source: Economic review-Planning commission, Kerala, various years)

The above Table shows the gross of the cumulative thrift collected and

the internal loans distributed among the members by the rural NHGs in Kerala.

The total amounts of thrift mobilized and loan distributed during 2001 were

only ` 8.48 crore and ` 2.17 crore respectively. There is a significant increase

in the thrift and loan amounts of the NHGs within a period of ten years and the

cumulative thrift mobilized by the rural NHGs.


73

(Source: Economic review-Planning commission, Kerala, various years)

Figure 2.7 Loan distributed through the Rural NHGs

The bank loan distributed through the rural NHGs during the twelve

years from 2000 to 2011 shows an increasing trend. The rate of growth can be

well established with a linear trend with b=39743 and a=84188 with a

significant R2 value, 0.963. It implies that the bank loan given per NHG is

expected to grow at a linear rate of 39743 over the period from 2000 to 2011.

Table 2.10 Thrift and loans distributed through the urban NHGs

Year Thrift ( ` ) Loan ( ` ) 2001 156781399 161160160 2002 199098559 209587470 2003 227470878 232401712 2004 285383444 312837707 2005 367870097 408962225 2006 435721041 485901880 2007 523209219 613059389 2008 670358501 726540490 2009 706754783 857690457 2010 819738567 1018421845 2011 1304634126 1875628490

(Source: Economic review- various years)

Chapter 2

74

The above Table shows the cumulative growth of thrift mobilization and

internal loan distributed by the urban NHGs from 2001 to 2011. Within a

period of ten years the cumulative thrift increased to ` 130.46 crore and the

loan has enlarged to ` 187.56 crore.

(Source: Economic review- various years)

Figure 2.8 Loans distributed through the urban NHGs

The loan distributed through the urban NHGs in Kerala increased from

` 16.116 crores to ` 187.56 crores over a period of eleven years from 2001 to

2011. The data over this period seem to show an exponential growth in the

amount of loan of urban NHGs in Kerala. Using the function, y= aebx, the

equation estimated using regression tool, results in b=0.223, a=1269 which is

valid with a significant R2 value, 0.982. To further add an explanation, the

initial amount of loan is expected to be at the rate of ‘b’.

2.11 The Kudumbashree Programme in Kerala

Kudumbasree is a Programme under the Poverty Eradication Mission

(PEM)-a Government Organised Non- Governmental Organization (GONGO)-,


75

directly supervised by the Local Administration Department of the

Government of Kerala. The word Kudumbasree means prosperity of the

family. It indicates the approach of the State Poverty Eradication Mission,

which was launched on 1st April 1999 as a partnership of the State

Government, Central Government, Local Government and the National Bank

for Agriculture and Rural Development (NABARD) for eradicating poverty.

Anti-poverty initiatives by the State Government with assistance from the

Central Government, like the Development of Women and Children in Rural

Areas (DWCRA); the Urban Basic Services (UBS); the Urban Basic Services

for the Poor (UBSP); Community-Based Nutrition Programme and Poverty

Alleviation Project (CBNP & PAP); the Prime Minister's Integrated Urban

Poverty Eradication Programme (PMIUPEP), etc., were implemented through

Self-Help Groups of women.

In Kerala, the Swarnajayanti Shahari Rozgar Yojana (SJSRY);

Development of Women and Children in Urban Areas (DWCUA); the

Swarnajayanti Gram Swarozgar Yojana (SGSY) in rural areas, and various

other development programmes of the Government are being implemented

under Kudumbasree, the community-based organizational structure created,

known as Community Development Society (CDS). In order to implement

the above-mentioned programmes and schemes, the CDS has a three-tier

organizational structure. At the grass-roots level, every poor family in a

neighborhood, each represented by a woman, is organized into a Neighborhood

Group (NHG), covering about 20 to 40 households. A team of five barefoot

organizers, consisting of Community Health Volunteer, Community

Infrastructure Volunteer, Community Income Generation Volunteer, Secretary

and President, is at the helm of every NHG. The NHGs are federated, at the

ward level, into Area Development Societies (ADSs) and then further

Chapter 2

76

networked into Community Development Societies (CDSs) at the Panchayat,

Municipality or Corporation level. The NHG/ADS/CDS system was initiated

in Alappuzha Municipality while implementing UBS and UBSP Programmes,

during the eighth Five Year Plan, and then extended to all the Corporations,

Municipalities and Gram Panchayats throughout Kerala.

The strategy slogan of the Kudumbashree Mission is "reaching families

through women and reaching the community through families". Women

empowerment initiatives, micro-finance operations, micro-enterprise and

convergent action constitute the core activities of Kudumbasree, carried out

through organizations of women below the poverty line. Kudumbasree works

through a community-based organization of the poor, called Community

Development Society (CDS), under the local government laws. The CDS is

empowered to identify the beneficiaries of anti-poverty programmes and take

up community contracting of local development works. Thus, the CDS system

has the right of voice, the power of choice and the entitlement of action - that

is, real empowerment. A significant achievement has been the setting up of a

process of genuine empowerment of women - avoiding patronage in

identification of the poor, improving knowledge about benefits and services,

enhancing capacity to access guaranteed entitlements, social and economic

security through self-help, expanding control over resources meant for the

poor, strengthening demand for improvement in services, and gradually

moving on to public action. At present, there are 45,405 SHGs under

Kudumbasree, catering to the needs of about 10 lakh poor families. The total thrift

collection is ` 38.7 crore and thrift loan given through these SHGs amounts to

30.08 crore. Kudumbasree gives great importance to micro-enterprises, both

individual and collective. There are about 11,042 individual micro-enterprises and

711 group micro-enterprises functioning under Kudumbasree. Bank loan utilized


77

for these enterprises is ` 6.06 crore and the subsidy amount is ` 5.71 crore.

The role played by Kudumbasree in poverty eradication in Kerala has been

recognized by various international agencies.

2.12 Economic Development Programmmes of Kudumbashree

The Local Economic Development Programme of Kudumbashree

involve community participation through the women's network in micro-level

planning and development. It also involves convergence of resources and

programmes at the level of local government. The Schemes of Micro-enterprises

development, Collective farming, Responsible Tourism programmes, Special

Urban Livelihood Projects, Marketing intervention Programmes and Samagra are

some of the evolving models of local economic development programmes of

Kudumbashree.

(I) Collective Farming

It is an initiative introduced to encourage cultivation by neighbourhood

groups. It brings in significant changes in the lives of the poor and helps

to increase agricultural production by bringing fallow and cultivable

wasteland into agricultural use, and has significance as a food security

measure. Women enter the programme as cultivators, as opposed to

agricultural labour and control over the means of production and access

to formal credit help in increasing the returns from farming. The

programme is being implemented in all districts with the support of

Local Self Governments.

(II) Micro Enterprises

Supporting and sustaining micro-enterprises has always been a challenge

for development administration. Problems of scale, capability, market

Chapter 2

78

and vulnerability do not offer easy solutions. In the recent past,

Kudumbashree has been attempting to analyze and resolve these

problems specifically and jointly, both by increasing the interface with

the LSG and the entrepreneur, regarding existing programmes, and by

bringing new strategies and new programmes that help converge

resources and address arising issues proactively and creatively.

ll (a) Rural Micro Enterprises Scheme (RME)

The Rural Micro-Enterprises (RME) Programme was initiated to help

women to setup Individual and Group enterprises, the minimum number

of people required for a group enterprise being ten. Various activities

like catering groups, traditional delicacies, paper products, super

markets, direct marketing, various food products, goat rearing, dairy

units, rabbit rearing, etc have been formed under the programme.

ll (b) Yuvashree

The Yuvashree or 50K programme provides employment to educated

youth in the State through micro-enterprises. The Objectives of the

programme involve facilitating youth to secure sustainable employment

opportunities, to foster economic development by creating jobs for the

poor, to identify innovative areas to set up micro enterprises for the

youths from BPL families and to provide hand holding and escort

services to the new generation entrepreneurs. This programme also gave

a chance to men from the Kudumbashree families to setup their

enterprises. Emphasis is given in setting up innovative enterprises.

ll (c) Innovation fund/Technology fund

Innovation fund was initiated for supporting innovative micro-enterprise.

The main objective is to cover initial risk. Suitable innovative micro-


79

enterprise projects will be identified by Micro enterprise and Samagra

teams in Districts which will then submit proposals to the Head Office.

Technology fund is planned to procure advanced and innovative

technologies for setting up micro-enterprises under Kudumbashree. The

cost of technology includes the cost to develop a new technology,

purchase of a technology from research organization, laboratories,

individuals, NGOs, etc.

ll (d) Revolving fund

One of the major issues faced by Micro Enterprise is the shortage of

working capital due to delay in payments by wholesalers and

Government Departments. Revolving fund is meant for meeting this

urgent requirement of working capital. Kudumbashree succeeded in

providing Revolving fund to units, which helped them in harnessing

working capital for continuous production-supply.

ll (e) Crisis management fund

Crisis management fund is meant for responding to an unpredictable

negative event to prevent it from escalating into an even bigger problem

related to Micro enterprise activities of Kudumbashree. The scheme has

only recently become operational. Kudumbashree adopts a four-pronged

approach towards crisis management:

1) Anticipate potential crisis situations and prepare for them,

2) Provide accurate information during a crisis

3) React as quickly as possible to the situation

4) Evolve long-term solutions.

Chapter 2

80

ll (f) Second Dose Assistance to Microenterprises

This is a special assistance programme to help units which have fallen

on hard times to revive and develop strategies to become viable again.

lll. Interventions under micro enterprises

1. ME Meets

ME meets are conducted at the Block level to identify enterprises

needing Kudumbashree support and market facilitation. These meets

help in networking those enterprises that have not availed themselves of

subsidy support from Kudumbashree. Kudumbashree succeeded in

conducting 87 ME meets and support 5399 enterprises in the last fiscal

year.

Kudumbashree provided support in the following areas:

1) Skill trainings

2) Accounting support through KAASS

3) Release of revolving fund / subsidy

4) Productivity improvement programmes

5) Marketing support

6) Inter-district product transfer.

IV Kudumbashree Consortiums

1. Kudumbashree I.T Consortium-Unnathi

The Unnathi I.T is a Consortium functioning as an agency that possesses

the capability to execute big data entry (and similar) assignments that

require pan-Kerala presence, for potential clients including government

departments, private and public sector banks, IT companies, etc., and

canvass orders from them. The Consortium will divide and assign the

work between the participating units, monitor the quality and timeliness


81

of execution, take corrective measures as and when required, deliver the

output to the clients and ensure collection and disbursement of money.

2. Kudumbashree Nutrimix Consortium-Amrutham

The Amrutham Nutrimix supplement produced by the units has been

distributed to the children through Anganawadis of the State. The

Nutrimix Consortium was an important step to increase the productivity of

units, to generate more income, and to address the common issues and

challenges faced by the units. The main aims of the Nutrimix Consortium

are common raw material procurement, developing a centralized

distribution channel, developing value-added products and diversifying

products, preparing the units to face competition from the market by

using the existing infrastructure and human resources.

3. Kudumbashree Garments Consortium-Kadambari

Kudumbashree Mission has established KADAMBARI, a consortium of

Kudumbashree Apparel units and Common Facility Centres (CFCs).

The Consortium has been established to deliver a host of services to

Kudumbashree Apparel units, through establishing backward and

forward linkages and instituting a professional management structure.

The Consortium is owned by Kudumbashree women entrepreneurs, and

run with professional support.

V Special Enterprises

The special enterprises that have been specifically sponsored and

developed by the Kudumbashree Mission are.

1) Santhwanam: An Enterprise to provide medical test facilities at

one's doorstep. The Santhwanam enterprise is the collaborative

Chapter 2

82

effort of Kudumbashree, HAP (Health Action by People) and SBI

(State Bank of India). This seeks to facilitate identification and

monitoring of life style diseases in the community.

2) Thelima-Solid Waste Management: Under this enterprise,

women from the poor families who are the members of the

Community-Based Organisations (CBOs) of Kudumbashree are

engaged in door-to-door household waste collection and transport

to the transit points fixed by the Urban Local Bodies.

3) IT & ITES: Kudumbashree enterprises in the highly competitive

world of information technology. Much of the data entry work

taken up by Government departments is being outsourced to these

units which give employment to over 2500 poor women. Digitizing

the BPL data and ration cards for the State Govt. Hospital kiosks for

birth registration was taken up by various IT units.

4) EKSAT : EKSAT is a group of young training professionals who

have the double advantage of knowing the community network

inside out as well as being capacitated by unique participatory

training methodologies. There are 3 EKSAT teams - based in

Alappuzha, Ernakulam and Kozhikode respectively. They have

been providing organizational capacity building to the network, as

well as orientation programmes on enterprise and livelihood

development.

5) KAASS : Kudumbashree Accounts & Audit Service Society; a

home-grown enterprise to ensure proper account keeping in the

community network. This team was formed with the aim of

auditing CDS


83

6) TRISAT : Started with the aim of exclusive development of tribal

community by providing trainings, by conducting workshops and

through other means. Talented Tribal promoters working with the

tribal department were selected as resource persons. Tribal

volunteers from the community are in turn trained by the RPs

about the schemes which can be availed for the benefit of the

community.

7) Cafe Kudumbashree: This is a team of hotel management

professionals who provide both technical and marketing support to

create Kudumbashree canteens and restaurants. The restaurants are

branded under a common brand called ‘Cafe Kudumbashree’ and

standardized foods and services are provided. Handholding support

to units is given for quality, management diversification of

products, new recipes, best practices in the industry, and better

resource utilization, catering to customer needs.

8) Nature Fresh: The idea of the project is to cut down the time

between production of milk and its consumption, through a

combination of hygienic management and innovative supply

strategies, enabling to fix a premium on fresh quality milk. The

milk produced is delivered to houses within a short span of time.

Traceability is ensured by numbering the cows and affixing the

numbers to the bottles seals. Cost-effective cattle sheds, designed

by experts in order to ensure maximum hygiene, have been

constructed in all the homesteads.

9) SME: Sales and Marketing enterprises (SMEs) are micro enterprises

that function with the specific purpose of marketing products of

Chapter 2

84

Kudumbashree entrepreneurs. Sales and Marketing enterprises

(SMEs) are micro enterprises that function with the specific purpose

of marketing products of Kudumbashree entrepreneurs.

10) Event Management Groups (EMGs): EMGs were formed with

the objective of managing Kudumbashree monthly fairs. The

responsibility of organizing monthly fairs was vested with the

district missions, but, when women entrepreneurs found it difficult

to stay late in the evenings to sell their products, EMGs were set

up as an alternative management mechanism.

Vl Machine Directory

Machinery directories include the details of machines and specifications in

some common enterprises that have substantial technology requirements.

The compilation will help entrepreneur take informed decisions regarding

the machinery.

VIl Micro enterprises Consultants System

Kudumbashree Micro Enterprises Consultants provide the handholding

support necessary in project preparation and liasoning with banks.

Capacity building was needed for the MECs, as not all of them were

well-versed with entrepreneurship, changing trends, the preferences of

customers, or environmental and other constraints that affect

businesses. The area of consultants includes Overview of business,

Financial management, Sales and marketing, Costing and pricing.

Along with the consultancy services, they also provide necessary

suggestions and arrangements to improve the performances of the

groups.


85

2.13 Marketing Initiatives of Kudumbashree

The marketing interventions of Kudumbashree include the Community

Marketing Network, Retail Shop, Sales and Marketing Enterprises and the

Home shops. Direct marketing, group’s participation in national and

international trade fairs, commercial tie-ups for marketing, and developing

retail outlets are some of the other marketing interventions of the Mission.

1. Monthly Market

The study conducted by Local Self-Governments and various

Government Departments during 2006 gave new insights to marketing of

the products of Kudumbashree. An immediate intervention in the area of

marketing, quality improvement, production capacity enhancement, product

consistency branding, packing, etc., became imperative for the success of

enterprises. The first intervention taken by the Mission was to organize

monthly markets across districts so that the issue of marketing could be

solved. The logic behind it was that unless the enterprises had marketing

opportunities their income and production would stay sub-optimal.

A permanent market opportunity and good income would help the

entrepreneurs to produce more. The quality improvement, concept of

branding and price standardization could be brought in. Bulk production

would help them to reduce the price. In addition to all these, the attitude

of the entrepreneurs would change and they would learn how to be more

competitive in the open market. Monthly markets became operational

with the active support of the CDS’s and entrepreneurs. The format of

monthly markets was that the markets should be organized in all districts

in the first week of every month on the same date and at the same venue,

preferably a central location.

Chapter 2

86

2. Community Marketing Network

The monthly markets threw up the challenges of procurement and venue

management. In the absence of dedicated personnel, districts

experimented with management options roping in the CDS, Micro-

Enterprise Consultants, (MECs) from the community, or forming event

management groups- a marketing enterprise that would help the small

time, distant producer in bringing their products to the market and

selling the products at a fair price.

3. Retail shop

The first Kudumbashree state level outlet, ‘THANIMA’, started functioning

in Trivandrum Museum Compound. Around 100 products produced by

Kudumbashree entrepreneurs from all over Kerala are available at

‘THANIMA’ outlet.

4. Sales and Marketing Enterprises

There has been a felt need for setting up enterprises whose function is to

exclusively market products of Kudumbashree enterprises. Current

Micro-enterprises programmes, viz., RME, Yuvashree and SJSRY were

designed largely with production Micro-enterprises in mind, and hence

held limitations for setting up enterprises that solely focused on marketing

of Kudumbashree products or creating management structures. To address

this gap, a new programme called Sales and Marketing Enterprises

(SME) was designed. Under this programme, two types of marketing

enterprises for Kudumbashree products (Local Sales and Marketing

Enterprises and Mission-Initiated Sales and Marketing Enterprises)

were initiated.


87

5. Branding

Branding of Kudumbashree products provided better protection for

Kudumbashree products, Tax exemptions, and Enhancing marketing

avenues. Presently, registration of various brands in different classes is

under way.

6. Home Shops

Early experiments of having a young group of market agents who would

procure and sell exclusively within the Kudumbashree network, through

the CDS, changed gear and started dealing with local producers

facilitated by the marketing group to come out with household articles

like soap powder, detergents etc., which were given a local brand name

and distributed through a ‘home shop’ network of part-time distributors.

The managers of the home shop are women of the network who spare a

couple of shelves in their homes to stock these local products, and spend

a couple of hours a day meeting NHG members and individuals to sell

their products. It is a part-time, stress-free, supplementary income

providing job for the home shop distributors.

7. National and International Trade Fairs

Kudumbashree stall bagged the centre of attraction in recent National

and International Trade fairs in India. Food Products, Herbal Products,

Handicrafts, etc were exhibited by Kudumbashree and they achieved a

strong sale turnover in those fairs.

8. Samagra

Samagra is an initiative independently developed by Kudumbashree,

being implemented in the State in collaboration with the three-tier local

Chapter 2

88

self-governments and other agencies. It is an attempt to address the

entire production – supply value chain holistically, by scaling up

productive activity both qualitatively and quantitatively, and seeking

viable supply opportunities.

2.14 The Concept of Women's Empowerment

Empowerment is a multi-fold concept that includes economic, social and

political empowerment. The individual or a group gains power and ability to

take control over lives. It includes access to resources, thereby, to opportunity

to participate in decision making, increased bargaining power, self-confidence,

self-esteem and self-respect. The concept of empowerment of poor women is

relatively new, especially in the realm of development. It is a process of

changing the existing power relations in favour of the poor and marginalized

women. It is a long-term process that requires changes in knowledge, attitude

and behaviour not only of women, but also of men and the society at large.

Empowerment of women in general and poor women in particular, is the thrust

area of development initiatives in India today. Empowerment is a process of

awareness and capacity building leading to greater participation to greater

decision-making power and control, and to transformative action. The concept

of women's empowerment has become the catchword today.

Here, the reason for targeting women pertains to high repayment rates. It

is assumed that increasing women’s access to micro-finance service will in

itself lead to individual economic empowerment through enabling women’s

decisions about saving and credit use, enabling women to set up micro-

enterprises, increasing income under their control. This increased economic

empowerment will lead to increased wellbeing of women and also to social

and political empowerment.


89

The concept of women's empowerment appears to be the outcome of

several important critiques and debates generated by the women's movement

throughout the world, and particularly by Third World feminists. Its source

can be traced to the interaction between feminism and the concept of "popular

education" developed in Latin America in the 1970s. The concept of the

empowerment of women as a goal of development projects and programmes had

been gaining wider acceptance in the 1990s. Women's participation in grassroots

organizations is increasingly recognized as crucial to their empowerment and as a

way for them to help shape development policies. According to Khan (2001)

and Sinha (2002), the Eighth Five Year Plan (1992-97) makes a shift from

'development' to 'empowerment' of women. Policies, programmes and projects

designed to assist and uplift the low-income women have shifted from the

"welfare approach" to an "empowerment approach". Hence, a number of

measures have been taken by the Government in this direction for social and

economic emancipation of women. According to Sahay, empowerment occurs

both at individual and at collective levels. At the individual level, a new

confidence and sense of self-efficacy emerges as the person redefines him or

herself as a more capable and worthy individual. Closely connected to the

psychological redefinition of ‘self’ is the actual increase of individual knowledge,

competency, skills, resources, and opportunities, which enable more effective

action and interpersonal relations. There is a positive interactive effect

between the development of self-confidence and the strengthening of personal

ability. As per NABARD's estimate, there are going to be several thousands of

SHGs being linked with different banks for their financing and several

hundreds are watching this development with great interest and enthusiasm.

Micro-finance is now accepted the world over as an effective tool for socio-

economic empowerment of the poor. The micro-finance movement in Kerala

is getting entrenched well with the initiatives taken by the National Bank,

Chapter 2

90

Government of Kerala (through Kudumbasree Programme) and with the

participation of NGOs, bankers and development agencies. Thus, it is found

that the SHG system is going to become a movement in Kerala. Taking this

into consideration, the present study would be of great importance to both

government and Kudumbasree, to evaluate the performance of the SHGs

registered under local self government of Kerala. Even though the SHGs have

emerged as an alternative developmental strategy to promote common interests

of the weaker and vulnerable section of the society and have contributed to the

empowerment of the poor women, an array of problems confront the SHGs,

including improper selection of group activities, lack of cooperation and zeal

among the members of the group, non-availability of adequate amount of raw

materials, lack of demand for the products, lack of marketing facilities, etc.

Against this background, the present study was undertaken to identify

the production and marketing performance of SHGs and their influence on the

success and stability among SHGs in Kerala. The specific objectives of the

study were: (1) to identify the various financial and non-financial difficulties

faced by the Self-Help Groups to produce their products. (2) To analyse the

various problems faced by the SHGs to market their products among the

public. (3) To evaluate the service provided by the government and non-

government agencies to the SHGs.


91

References

[1]. A.V.V.S Subbalakshmi, “Micro finance: A study of sample blocks of Kancheepuram” Southern Economist, june 15, 2009 pp-13-14.

[2]. Anil Kumar (2004), Marketing practices and women entrepreneurs and: an empirical study, empowering rural India, pp 287-293

[3]. Kindo, Sushma, Micro credit and women empowerment, A study in a tribal district of Odisha, Centre for Development Studies, Thiruvananthapuram-2009-2011

[4]. Lina Joy, A. Prema and S. Krishnan (2008), “Determinants of Group Performance of Women-led Agro-processing Self-help Groups in Kerala”, Agricultural Economics Research Review, Vol. 21 (Conference Number) pp 355-362

[5]. NABARD. Status of Micro finance in India 2012

[6]. S.M Feroze and A.K Chouhan, Micro finance in India, A performance evaluation, New century publications, New delhi- India.

[7]. S.Venkateshmurthy & G.M. Dinesh, women empowerment through SHG-an analysis’

[8]. www.kugumbashree.org.

[9]. Zubair Meenai, (2010), Women’s empowerment and micro credit – emerging space for social work practice, The Indian Journal of Social Work, volume 71, issue 1, pp 27-49.

….. …..

Date post:	03-Jul-2018
Category:	Documents
Upload:	vuliem
View:	215 times
Download:	0 times

THEORETICAL FRAMEWORK OF THE STUDY -...

Documents