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Vol - I , ISSUE - IV May 2011 : Other

Author : Asso.Prof. Wale V.S. and Prof. Deshmukh A.M.

Article : Women Empowerment through Self-help Group

ABSTRACT :

The growing social awareness across the globe has brought a number of

issues to the fore among which gender equality and empowerment of

women are very significant. Discrimination against women in the form of

male-female differentiation constitutes the core of the gender-biased

system. The Word Bank has suggested that empowerment of women should

be a key aspect of social development programs. The empowerment is not

essentially political alone in fact; political empowerment will not succeed in

the absence of economic empowerment. The scheme of micro financing

through Self Help Groups (SHGs) has transferred the real economic power in

the hands of women and has considerably reduced their dependence on

men. The empowerment of women and improvement of their status and

economic role needs to be integrated into economic development programs,

as the development of any country is inseparably linked with the status and

development of women. Given the gender division of labour that prevails in

India, Nutrition, Child health, and related matters typically depend mostly on

womens actions and decisions. Experience has shown that promotion of

enterprise creation and income generating activities among women would

transform them from being alive to living with dignity. One of the powerful

approaches to women empowerment and rural entrepreneurship is the

formation of Self Help Groups (SHGs) especially among women. Womenbeing central to the entire development process and at the precursor of

social transformation can be demonstrated with many examples that could

include Grameen Banks success, SHGs of ICICI Bank, Shakthi Ammas at

HLL, Cemex, Amul, the success of Avon, Mary Kay, and Tupperware in US

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and other parts of the world.

INTRODUCTION :

This paper is divided into two sections. In the first section we shalldiscuss the concept of Self-Help Groups (SHGs) as an instrument of

economic empowerment, its various models and the strength of informal

sector over formal sector. In section II Importance of women empowerment

through SHGs. Section III we shall conclude with the presentation of

strategy of women empowerment by linking benefits extended by the

governments to the members of Self-Help Groups (SHGs).

Self- help group as an instrument of economic empowerment :

Self Help Group (SHG) is a small voluntary association of poor people,

preferably from the same socioeconomic background. They come together

for the purpose of solving their common problems through self-help and

mutual help. The SHG promotes small savings among its members. The

savings are kept with a bank. This common fund is in the name of the SHG.

Usually, the number of members in one SHG does not exceed twenty.

Bank-SHGs linkage models

Since the introduction of financial sector reforms in 1991 the banks areusing these distinct linkage models to finance SHGs.

1. Model I: - Banks provide micro finance to non-governmental

organization (NGOs) for lending to SHGs and ultimately to the micro

entrepreneur (It covers about 27% of SHGs)

2. Model II: - Banks provide direct financing directly to SHGs for on

landing to micro entrepreneur (It covers 17%)

3. Model III: - Banks finance directly to SHGs for on lending to micro

entrepreneur with the intervention of NGO as social mobilizers andfacilitators (It covers 56% of SHGs).

4. Model IV: - The fourth model envisages bank loans directly to

individual members of SHGs upon recommendations of the SHGs and NGO.

In this case, the NGO assists the Bank in monitoring supervising and

recovery of loans.

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Formal & Informal systems

Traditionally, the formal sector Banking Institution in India have been

serving only the needs of the commercial sector and providing loans for

middle and upper income groups.

In India, we have multi-agency rural credit delivery structure comprising

commercial Banks, Regional Rural Banks and Cooperative Banks with a large

network of more than 1,53,000 retail credit outlets (One for every 4100

population). Yet reaching the poorest, whose credit requirements are very

small, frequent and unpredictable, is still a difficult task and Sahukars (the

rural non-formal Money Lenders) continues to be the main agency. Further,

the systems and lengthy procedures of the banking institutions with

emphasis on complicated qualifying requirements, tangible collateral, margin

etc. also kept them away from these formal agencies. Banks too experienced

certain problems like poor repayment, lack of supervision and monitoring,

high proportion of non performing assets and poor repayment. Since the

credit requirements of the rural poor cannot be adopted on project lending

approach (like in formal organized sector) there emerged the need for an

informal credit supply through SHGs. Social intermediation is required for:

1. Organising rural poor women

2. Educating them

3. Imparting Training and skill

Commercial Banks, Housing Finance Institutions, NABARD, and Rural

Development Banks, Land Development Banks, Cooperative Banks, are the

major formal financial institutions. Urban Cooperative Banks (UCB) Urban

Credit Cooperative Societies (UCCS) are the two primary cooperative

financial institutions operating in the urban areas.

The informal financial sources generally include funds available from

family sources or local moneylenders. The local moneylenders charge

exorbitant rates of interest due to their informal behavior and absence ofany other source of credit for nonconventional needs. Chit funds, Bishis, are

other forms of credit operated by groups of people for their mutual benefit.

Lately, few of the NGO engaged in the activities related to community

mobilization for their socio economic development have initiated savings and

credit programmes for their target groups. The community based financial

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system can be categorized into two models:

Group Based Financial Intermediary, and

NGO Linked Financial Intermediary

Most of the NGOs like SHARAN in Delhi, Federation of Thrift and Credit

Association (FTCA) in Hyderabad, or SPARC in Bombay, SEWA in

Ahmedabad. The experience of these informal intermediaries shows that

although the savings of group members, small in nature do not attract high

returns, it is still practiced due to security reasons for getting unsecured

loans without much

formalities and collaterals at lower rates compared to that available from

money lenders.

Importance of women empowerment through SHGs :

Women are critical for Development: In his book "The Fortune at the

bottom of the Pyramid", Prof. C.K.Prahlad comments, "A well-understood but

poorly articulated reality of development is the role of women. Women are

central to the entire development process. There are also at the vanguard of

social transformation. For example, Grameen bank's success is based on

lending only to women. The SHGs at ICICI bank are all women, as are the

shakti ammas at HLL. The women are entrepreneurs responsible for saving

and accessing credit. In the case of CEMEX, the company works only with

women. Amul, a milk cooperative, depends on women for their milk

origination in villages. Women also collect the cash for the milk and

therefore have achieved a new social status. Access to economic

independence can change the long tradition of suppression of women and

denial of opportunities. The success of Avon, Mary Kay and Tupperware in

US and other parts of the world are also based on the role of women

entrepreneurship.

When asked with Muhammad Yunus, managing director of Grameen

Bank in Bangladesh, a pioneer in the practice of microcredit lending as to

why loaned primarily to women, he replied, that "It has to do with the

decision to have a separate bank for the poor people. From the beginning, I

had complained about the banking system on two grounds. One complaint

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was that the banking system was denying financial services to the poor

people through certain rules it had set up. The second allegation was that

the banking system also was not treating women fairly. If you look at the

gender composition of all the borrowers of all the banks in Bangladesh, not

even 1 % of the borrowers happen to be women. I said this is a very

gender-biased organization. So when I began, I wanted to make sure half

the borrowers in my program are women so that they are even. I did that. It

was not easy because women themselves didn't think that they should

borrow money. I had to do a lot of convincing. I encouraged them to

believe that they can borrow money and make money. Part of that effort

was to overcome fears -- cultural fears -- and the fact that they had never

had any experience with business and so on. Soon we saw that money going

to women brought much more benefit to the family than money going to the

men. So we changed our policy and gave a high priority to women. As a

result, now 96% of our four million borrowers in Grameen Bank are

women".

One of the powerful approaches to women empowerment and rural

entrepreneurship is the formation of Self Help Groups (SHGs) especially

among women. This strategy had fetched noticeable results not only in India

and Bangladesh but world over. "Women self-help groups are increasingly

being used as tool for various developmental interventions. Credit and its

delivery

through self-help groups have also been taken as a means for

empowerment of rural women. This integrated approach, whereby, credit is

only an entry point, and an instrument to operationalise other aspects of

group dynamics and management, also caters to the need for social

intermediation of these groups. A self-help group is conceived as a

sustainable people's institution that provides the poor rural women with

space and support necessary for them to takeeffective steps towards achieving greater control of their lives. The SHG

approach has proved successful not only in improving the economic

conditions through income generation but in creating awareness about

health and hygiene, sanitation and cleanliness, environmental protection,

importance of education and better response for development schemes.

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Through organizing informal self-help groups (SHGs), rural women in India

are provided credit and extension support for various production-oriented

income generating activities. These activities usually include garment

making, embroidery, food processing, bee keeping, basketry, gem cutting,

weaving, and knitting. SHGs are self-governed, with decisions about

production and marketing taken collectively, although the group leader is

responsible for identifying potential marketing centers and consumers. These

groups represent a new culture in rural development, breaking with

traditional bureaucracy and top-down management. Informal groups

empower rural women to manage rural industries and make decisions

collectively for their common economic interests. Studies on the

development of informal women's groups in India, shows how it is possible

to avoid the 'top-down management' and bureaucracy that often contribute

to the

failure of other schemes. Informal self-help groups in rural areas serve

to empower women, and provide a basis for the provision of credit and other

support for various production and income-generation activities.

Conclusion :

The success of any strategy of women empowerment depends upon the

following factors:

1. Level of education, hard work

2. Social custom

3. Family planning, small family

4. Health, medical services, cleanliness

5. Environment, tree growing, kitchen gardening.

6. Collective strategies beyond micro-credit to increase the endowments

of the poor/women enhance their exchange outcomes vis--vis the family,

markets, state and community, and socio-cultural and political spaces are

required for both poverty reduction and women empowerment.

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