SHG Federations in Odisha: Management, Challenges and Opportunities

 

Dr. Navin Kumar Rajpal

Director, ICSSR Project, Department of Economics, Sidho Kanho Birsha University, Purulia, West Bengal

*Corresponding Author Email: navin300@yahoo.co.in

 

ABSTRACT:

SHG federations are an apex organisation designed to promote political, entrepreneurial, social and economic aspects of SHG members. In Odisha, SHG federations are promoted and supported by government organisation under strict compliance. There exist some deviation in norms and regulation as per geographical and socio-economic status, but as regard to operational and organizational structure concern all federation follows rules developed by Mission Shakti. The federations in Odisha follows three tier structure including in bottom cluster level federations (primary level), Panchayat level (secondary) and Block level federations (Tertiary level)  As per their position study found no existence and relevance of primary level federations i.e. village level federations in any districts of Odisha (mission Shakti report). The federations are usually found at secondary and tertiary level even with less number (compared to panchayats and blocks)in many districts as desired.

 

KEYWORDS: Financial Institutions, Federation and Co-operative management.

                              JEL Codes: D14, D31, D53 and O35

 

 


INTRODUCTION:

SHG Federations are an apex organization designed for growth and promotion of SHGs and microfinance program in India. The concept has gained momentum due its giant structure constituted for raising voice of each and every individual member. The federation in words of their members is the collective organization formed to raise the socio-economic issues, financial and management problems, entrepreneurial and political/social challenges of SHG members. In other words, SHG federations are apolitical organisation initiated with a motive to provide organizational and institutional set-up to its SHG members especially women. One of the major objectives of SHG federation is to bring out the SHG members from socio- economic and political obstacles.

 

ESAF defines “SHG federations as a network of several SHGs and a structure evolved by SHG members consisting of representatives from different geographical settings with a motive of supporting members to attain the goals of economic and social empowerment of women members and their capacity building” (http://esafindia.org/esaf-group-of-institutions/shg-federation.html). The federations may be defined in contextual form as “apolitical organisation designed to develop social capital and entrepreneurship among members of network of SHGs joining together to help the poor and vulnerable in improving and empowering through capacity building”.

 

The SHG federation serves as an umbrella to SHGs in providing protection against social, economic, and political disputes. It exists in different states with different name and different promoting agencies (Table 2). There exist difference in criteria at different states for formation and membership of SHG federations. The complexity in its operation and management continues as there always exist political/local domination.

 


 

Table 1. SHGs Promotion Programmes in Different States of India

States

Programme

States

Programme

Bihar

Jeevika

Karnataka

Sthree Shakthi (koushalya)

Odisha

Mission Shakti, TRIPTI

Kerala

Kudumbashree

TamilNadu

MahalirThittam

Madhya Pradesh

Udhyogini

West Bengal

Anandhara, Samajsathi, West Bengal Swanibhar Sahayak Prakalpa, Muktidhara

Chhattisgarh

Mahila Samakhya

Andhra Pradesh

Andhra Pradesh Mahila Samatha Society

Assam

Kanaklata Mahila Sabalikaran Asoni

Jharkhand

Tejaswini

Rajasthan

Sawavlamban, Amrita Hat

Source: Compiled from different sources

 


A Collaborative study of GIZ, DGRV, NABARD, APMAS and ENABLE Network executed over 12 SHG federations of 6 states of India finds the federations for achieving sustainability have deviated from their core principles objectives. Further, Lack of resources, expertise, vision, strategies have created gap between policy and its execution at various levels. The SHGs federations as that of other organisation also suffers from corruption on part of fund allocation, training selection of members, subsidy allocation, recruitment/leasing of govt. ventures etc.

 

In Odisha, the SHG federations in local terms are known as “Mahasangha” defines as Maha which means High and Sangha i.e. union/people representation. They are classified on the basis of their geographical and hierarchal presence (refer figure 1). The need for introduction of SHG federations arises in order to provide big platform/forum to SHGs, as their presence and existence at grassroot levels have increased tremendously. Federations in Odisha are formed, organized and promoted by various government (Mission Shakti, TRIPTI, DSWO, OLM) and non-government agencies (NGOs and other development registered societies/agencies). It is a mandate for every SHG to registered themself or become part of local federation established and registered under Society registration Act 1860. The federations are categorized into four tier structure/hierarchy as shown in Figure 1. SHG federation is next step to SHG – Bank linkage programme as it focuses on providing sustainability to SHGs and their enterprises. This paper attempts to analysethe compositional, organizational and operational status of SHG federation in districts of Odisha.

 

METHODOLOGY:

Data:

The study is executed to highlight the existence and performance of SHG federations in different districts of Odisha. In order to evaluate the performance of federation’s data pertaining to SHG operation were collected from reports of mission Shakti, organizational and political structure of Odisha from state statistical handbook. Further, comparative study of performance districts are categorized on the basis of reports of US-India policy Institute and classified as i) Developed districts, ii) less developed districts and iii) Backward districts. Accordingly comparative analysis were done taking into consideration financial status, SHG federation affiliation extension, federation – panchayat ratio and number of SHG members. Performance analysis is done based on scaling of different operational and financial parameters (refer federation and their extension in Odisha). Based on the above ranking, attempts have been to classify all 30 districts into 3 broad categories. 

i.       Developed (Ranking from 104 – 298) – 08 districts

ii.      Less developed (301 – 485) –                              11 districts

iii.    Backward (507 – 589) –                         11 districts

 

Research Tools:

The working and sustainability of SHGs federation may be evaluated on the parameters as developed by author himself. The major parameters under consideration are as follows:

i.     Number of members per federation (NMPF):

Number of members per federation should be lowest in order to have efficient operation and growth of each member enterprise.

ii.    Number of SHGs per Federation (NSPF):

The number of SHGs affiliated to per federation should be lowest so that the SHGs could get enough opportunity to avail benefits and opportunities of govt. and other agency schemes.

iii.  Panchayat – federation Ratio (including blocks):

The number of federation against number of existing panchayat represents the execution of responsibility of towards SHG members of panchayat. Each panchayat should minimum have single federation and its higher in presence represents better management and co-ordination.  

iv.  Average saving of SHG per federation (ASPF):

The saving amount constitutes the most important factor in identifying the sustainability and performance of SHGs (based on saving record of Mission Shakti reports, 2014).

v.    Average loan to SHGs per federation (ALPF):

The credit amount is determined on the basis of saving done by SHG members on regular basis with linked formal financial institutions. The likelihood scale will allocate higher point to the districts having higher average loan disbursement and vice-versa.

vi.  Number of SHGs availed loan per federation (NSAL):

The number of SHGs availed loan facility from different formal financial institution stands among the major factors determining the progress of SHG programme in particular district.


Table 2. SHG and their Federations Evaluation Parameters

NMPF

NSPF

PFR

ASPF

ALPF

NSAL

Scaling

Less than 300

Less than 30

Federation in multiple of 3 times of no. of panchayat

Above 20 lakh

Above 80 lakh

Above 50 SHGs

5

300 – 400

30 – 40

Federation in multiple of 2 times of no. of panchayat

15 lakh – 20 lakh

60 – 80 lakh

40 – 50 SHGs

4

400 – 500

40 – 50

Federation equal to number of panchayat

10 lakh – 15 lakh

40 – 60 lakh

30 – 40 SHGs

3

500 – 600

50 – 60

Federation having coverage 90 – 100 percent of panchayat

5 lakh – 10 lakh

20 – 40 lakh

20 – 30 SHGs

 

2

More than 600

More Than 60

Federation having coverage less than 90 percent of panchayat

Less than 5 lakh

Upto 20 lakh

Less than 20

 

1

Note:  5 – Very Good, 4 – Good, 3 – Average, 2 – Poor, 1 – Very Poor

 

 

Figure 1. SHG federations structure inOdisha

 


RESULTS AND DISCUSSION:

In Odisha, the federations as of that of SHGs are supported and promoted by ICDS and Mission Shakti under Department and women and child development. One major characteristic making the objective of SHG and their federation in common is apolitical organisation. The Cluster level forum is a platform for sharing the experiences of SHGs and extends mutual support to improve the overall performance of SHGs. It is also known as primary level federation as it works at village level constituting all SHGs available in village (maximum 15 SHGs). In case of higher number of SHGs (beyond 15) separate federation has to be formed (as per norms of OLM).Even all SHGs of a particular village are allowed to form single federation irrespective of number of SHGs in existence. The primary federations are formed to make monthly review of SHGs, community professional aid promoting agencies and acts as bridge between SHGs and GPLF. The CLF membership is available to all SHGmembers available in village irrespective of caste, religion and culture and having valid documents of their organisation e.g. saving passbook, ledger book, resolution book, transaction register, enrollment with ICDS/WCD/DSWO etc. The CLF comprises of two members from each SHG constituting one leader (president) and one general member as nominated by SHG. Certain conditions also exist in form of representation of members from BPL category.

 

Gram Panchayat Level Federation (GPLF):

Orissa Livelihood Mission (OLM) in their GPLF operational manual defined GPLF in its legal form as “autonomous body of SHGs that works for their personal mutual social and economic development. The membership of GPLF is voluntary and requires a mandate of membership at CLF. These GPLF are registered under society registration act 1860 and are mostly promoted by incharge of ICDS/OLM. The GPLF comprised of President, Vice- President, Secretary and members of general body, executive body and office bearers. The memberships are usually rotational in nature and selections are made via voting. This organisation is required to have a permanent infrastructure with all set up including clerical/supporting staffs.

 

Block level Federations (BLF):

The Block level federations are directly under control of government agencies i.e. Mission Shakti and TRIPTI or OLM. The formation of BLF is done as per the norms and guidelines of government promoting organizations. It usually composed of two members from each GPLF and in case of non-availability of GPLF the members are drawn directly from SHGs of respective panchayat on the basis of seniority/best working/maximum loan/best practice/resolution maintenance etc. The BLF works are guided and control by BDOs, ADBOs in developing the norms as per local suitability in addition of law developed by apex agency.


Table 3. SHGs and their Extension in Developed Districts

District

No. of Blocks

No. of Panchayats

No. of SHGs

Saving Amount*

No. of Federations

No. of Members

Khurda

9

173

14142

6232.81

178

182783

Cuttack

14

373

19307

4272.29

378

241786

Jajpur

10

311

10990

1885.19

310

155558

Jharsuguda

5

78

4388

821.78

126

49457

Kendrapada

9

249

11366

6143.18

240

132361

Angul

8

226

15464

5346.67

701

196874

Jagatsinghpur

8

198

8148

3424.92

229

102426

Dhenkanal

8

183

11727

2011.50

539

129713

Total

71

1791

95532

30138.34

2701

1190958

Compiled from Mission Shakti report 2014, State Statistical Handbook       *Savings in Lakh

 

Table 4: Sustainability analysis of federations in Developed Districts

District

NMPF

PFR

NSPF

ASPF

ALPF

NSAL

Total Score

Khurda

1

2

1

5

5

5

19

Cuttack

1

2

2

3

2

2

12

Jajpur

2

2

4

2

1

1

12

Jharsuguda

4

4

4

2

2

2

18

Kendrapada

2

2

3

5

2

3

17

Angul

5

5

5

2

1

1

19

Jagatsinghpur

3

3

4

3

1

2

16

Dhenkanal

5

5

5

1

1

1

18

Source: Computed from scaling method developed by author

 


District level federations (DLF):

The district level federations are higher level authority of evaluation, extension and development of SHGs in district. The members are collectively formed from representatives of block level federations (BLF). The membership of general body differs from district to district depending upon the statute, norms and regulation. There exist disparity in organisation and composition of DLF depending upon geographical, cultural and social diversity. These block level federation nominates member from their affiliated federation having experiences of handling SHG matters and is in position to raise issues before DLF. Each block nominates 2 – 4 members depending upon the number of blocks and BLFs.

 

Federations and their Extension in Odisha:

According to the survey conducted by the US-India policy Institute and New Delhi based Centre

for Research and Debates in development Policy, none of Odisha districts are in top 100 developed districts of country (Daily pioneer, 2015). According to the reports, only two districts of Odisha i.e. Khurda (104) and Cuttack (164) ranks between 100 - 200. The condition of backwardness could be observed through the fact that even holding better position in terms of Area (9th), Coal Reserves (2nd), Bauxite/ Aluminum Ore (1st), Chromite (1st), Manganese (1st), Iron Ore (1st) and Nickel (1st), still Orissa’s 28 districts out 30 ranking between 200 – 500 in terms of development (backwardness in reverse).Further, 8 district stands among most backward districts of the country.

 

There exist apex federation at each district and their major objectives are to make vigilance over activities of block and panchayat level federations and execution of SHG promotion govt. schemes/activities at grassroots level. In the developed districts (refer table 3), the maximum concentration of federations was observed in Angul district with the panchayat-federation ratio 1:3, while the lowest was observed in Kendrapara i.e. 1:0.93. This clearly reflects that the federation formation and working is quite impressive in Angul district and there exist several federations at village level also while the position of federations is very poor at blocks/panchayats of Kendrapara whereas the reported numbers are even less than total number of blocks and panchayat. It has been observed that out of eight developed districts only 50 percent districts are having federations higher than number of panchayats (ratio ranging between 1:2.82 to 1:1.11) and the average number of WSHGs affiliated to each federation range from 22 – 35 i.e. Angul (22), Dhenkanal (22), Jharsuguda (35) and Jagatsinghpur (35).

 

On the basis of the above parameters the developed districts have been ranked thereby highlighting the sustainability of federations and their affiliated SHGs. The scores are evaluated as follows:

 

i.       30 – 25= Very good, ii. 25 – 20= Good, iii.20 – 15= Average, iv. 15 – 10 = Poor, v. 10 – 5 = Very Poor

Table 4 represents score analysis of developed districts in which none of the federations of developed districts are in very good (30 – 25) and good position (25 – 20). Out of 8 districts,6 are in average position having score between 20 – 15 but good in terms of average saving per federation, average loan per federation, Panchayat-federation ratio and average number of SHGs availing loan per federation.

 


 

 

 

Table 5. SHGs and their Extension in Less developed Districts

District

No. of Blocks

No. of Panchayats

No. of SHGs

Saving Amount*

No. of Federations

No. of Members

Puri

10

241

13766

5295.37

279

196778

Bhadrak

7

218

9512

444.73

201

121761

Sundergarh

17

279

17662

3894.73

117

159074

Sambalpur

9

138

8844

1366.88

187

107920

Baleswar

12

360

16359

5948.79

402

196630

Nayagarh

8

196

6642

2064.32

189

74821

Ganjam

22

503

22744

7925.97

499

282439

Bargarh

12

254

9512

2172.39

201

121761

Sonepur

6

109

5586

720.95

103

54789

Rayagada

11

182

7140

1643.08

183

90525

Deogarh

3

72

2452

752.56

68

33692

Total

116

2552

120219

32229.77

2429

1440190

Compiled from Mission Shakti, State Statistical Handbook

 


The federations of rest 2 districts have shown poor performance as their score range between 15 – 10, this clearly reflects there exist no parity in implementing/evaluating the important dimensions of the programme. On the other hand, in an absolute manner it can be concluded that the federations of Angul and Dhenkanal are in better position in terms of federation affiliation, quantity and membership (lowest the number better the opportunities).

 

There exist 11 districts in less developed district category constituting 116 blocks and 2552 panchayats. The overall block-panchayat and federation ratio shows the need of at least 2668 federations while the numbers of federation in existence were 2429 thereby showing non-existence of federations at certain panchayats. Out of the selected districts under consideration only 3 districts i.e. Sambalpur, Puri and Baleswar have shown the equivalent ratio between federations and number of block and panchayat combined. Rest of the districts holds less number of federations as compared to the requirement. Even the status of federation in Sundergarh is very poor where 1 federation exists for 4 panchayats. In absolute terms, there exist higher number of SHGs Ganjam followed by Baleswar, Sundergarh and Puri but in terms of federations there exist parity in all three districts except Sundergarh. One of reason for this parity may be working of TRIPTI (coverage over coastal areas of Odisha) in the above three districts while surdergarh is not under their jurisdiction (refer table 5).


 

Table 6. Sustainability analysis of federations in Less Developed Districts

District

NMPF

PFR

NSPF

ASPF

ALPF

NSAL

Total Score

Puri

1

3

3

4

1

4

16

Bhadrak

1

1

3

1

4

3

13

Sundergarh

1

1

1

5

5

5

18

Sambalpur

2

3

3

2

2

3

15

Baleswar

3

3

3

3

2

3

17

Nayagarh

4

2

4

3

1

2

16

Ganjam

2

2

3

4

3

3

17

Bargarh

1

1

3

3

4

2

14

Sonepur

2

1

2

2

1

3

11

Rayagada

3

2

4

2

2

3

16

Deogarh

3

1

4

3

1

2

14

 Source: Computed from scaling method developed by author (Average = 6, Poor = 5)

 

Table 7. SHGs and their Extension in Backward Districts

District

No. of Blocks

No. of Panchayats

No. of SHGs

Saving Amount*

No. of Federation

No. of Members

Keonjhar

13

297

11881

1471.13

302

133113

Bolangir

14

159

10646

2255.05

300

137246

Koraput

14

240

19113

4137.82

301

214231

Kalahandi

13

310

11136

2622.09

282

128898

Kandhamal

12

171

6317

2704.22

166

76378

Gajapati

7

149

5228

702.37

137

65071

Mayurbhanj

26

404

21516

5327.25

426

256137

Boudh

3

71

2798

364.46

67

35832

Nabarangpur

10

189

9204

1313.71

180

110952

Malkangiri

6

93

7676

1190.74

280

102582

Nuapada

5

131

6475

2494.15

149

74563

Total

123

2214

111990

24582.99

2590

13,35,003

Compiled from Mission Shakti, State Statistical Handbook

 

 

 

Table 8. Sustainability analysis of federations in Backward Districts

District

NMPF

PFR

NSPF

ASPF

ALPF

NSAL

Total Score

Keonjhar

3

2

4

1

2

2

14

Bolangir

3

4

4

2

1

2

16

Koraput

1

4

1

3

2

4

15

Kalahandi

3

1

4

2

2

3

15

Kandhamal

3

2

4

4

2

2

17

Gajapati

3

1

4

2

1

2

13

Mayurbhanj

1

2

2

3

2

4

14

Boudh

2

2

3

2

1

3

13

Nabarangpur

1

2

2

2

2

3

12

Malkangiri

4

5

5

1

1

1

17

Nuapada

2

3

3

4

2

2

16

  Source: Computed from scaling method developed by author (Average : 4, Poor: 7)

 


The score analysis in table 6 show Sundergarh in front position with total score of 18, because of higher average saving per federation, average loan per federation and number of SHGs availed loan per federation while the other parameters which especially deal with federation composition (NMPF, PFR and NSPF) were not impressive. Out of 11 districts, 6 have shown average performance (score ranging between 16 – 18) while 5 districts have shown poor performance (score ranging between 11 – 15). Here a point to be noted that out of the five districts under operation of TRIPTI in less developed category, 04 have shown (except Bhadrak) average performance as similar to that of federations under developed districts where except Jajpur rest shows average performance. It may be concluded from the above that TRIPTI operations in developed and less developed districts have significantly contributed to the development of federation and SHGs.

 

Table 7 shows the backward districts which constitute majorly the tribal dominated districts of Odisha (72 percent of districts are tribal dominated). These districts also suffer from various political insurgencies and constitute major share of red corridor areas. As compared to developed and less developed districts, these backward districts hold lower amount of saving per federation (Rs. 9.49 lakh as compared to Rs. 13.26 lakh less developed and Rs. 11.15 lakh of developed districts) and Average saving per group (Rs. 21,951 as compared to Rs. 26,809 of less developed and Rs. 31,547 of developed districts).

 

The scaling score analysis shows that out of 11 districts under backward category 7 districts stands on poor position while only 4 districts have adjusted themselves at average position. Malkangiri district which stands as most tribal dominated district of Odisha (57 percent ST population) has shown excellent performance in terms of first three parameters (federation activity related) scoring 14 out of 15 but on the other hand their financial position in terms of average loan per federation, average saving per federation and number of SHGs availed loan per federation accredited worst performer (refer table 8). Even comparative analysis of the first three criterions (NMPF, PFR and NSPF) of all selected districts shows the federations and their affiliated SHGs of backward districts are following all terms and norms for better sustainability (taking score of all three parameters for all three categories of district) as compared to less developed and developed districts.

 

Out of total 30 districts of Odisha (taking all together), 16 districts have shown average performance while rest 14 were on poor performer category. The following backdrops are drawn from the above analysis in order to have better performance of SHGs as well as their federation in Odisha. Moreover, as these two individual organisation are inter-dependent of each other and the former will lead to development of later and vice-versa. The major problems of the federations may be identified as under

 

i.     There exists less number of federations as compared to the requirements even at panchayat level. (Developed districts – 5, less developed districts – 8 and backward districts – 6).

ii.    The concept of development level federation (village federation) and their reporting is completely absent.

iii.  The financial status of federations (in terms of average saving per federation, number of SHGs availed loan and average amount of loan per federation) shows the position is poor in all categories of districts (score less than 50 percent) but severe in developed districts (75 percent), backward districts (64 percent) and less developed district (45 percent).

iv.  The major role of federations is to undertake responsibility of providing loan against saving of SHGsmembers and the district wise analysis shows that in developed districts loans are provided to 68 percent of SHGs, less developed districts 72 percent of SHGs and 70 percent of SHGs of backward districts.  The district having higher concentration of ST’s i.e. Malkangiri (59 percent) is the second worst performer after Keonjhar (57 percent) in providing loan to SHGs in backward districts category.

v.    Though the developed districts have shown better performance in overall scaling (i.e. 75 percent districts as average performer) but as regard to the financial, organizational and affiliation performance concern, position of less developed districts are notable.

 

CONCLUSION:

The need of formation and development of federations are required in all districts of Odisha as the problem and challenges of SHGs are need to redress at local level. Except Angul, the existence of the concept of cluster level federation is missing in all districts. Even if they exist there is no record of maintenance from mission Shakti and other government organisation. It has been observed through literature review that federations are now developed under Orissa Livelihood Mission (OLM) in certain selected districts in addition to Mission Shakti. This may create problem of double counting (member enrolled at both organisation) and further clash between federation and groups. The overall challenges can be redressed only when online enrollment of SHGs and their members could be done from ICDS staff at cluster and panchayat federation taking into consideration their enthusiasm and responsibility of execution of federation activities. This practice will help in overcome the loopholes of favoring certain specific SHGs by certain federation and other corruptions. The practice of voting of executive and organizational members could also be arranged with norms of no repetitive tenure. The SHG related report developing organisation should now expand their gamut and add the following criteria in their annual report a. the number of training imparted, b. number of SHGs attainted training programme, c. type of training, d. expenditure incurred, so that the working of federation could also be analysed simultaneously with working of SHGs.

 

REFERENCES:

1.     Access Development Services. Drafting Report on A Study of SHG and their federations in Odisha. Retrieved from https://aajeevika.gov.in/sites/default/files/nrlp_repository/16Odisha_SHG_Federation_Study.pdf

2.     Rajpal N.K. and Tamang S. (2014). SHG federations in Odisha – Are they really Viable. Anvesa – An Inter-disciplinary Research Journal, Fakirmohan University, Vol. 9(1), 72-79.

3.     NHRM Orissa (2012). Institutional Assessment of SHG and their federations in BKR districts of Odisha published by Technical and Management Support Team. retrieved from http://www.nrhmorissa.gov.in/writereaddata/Upload/Documents/21.%20Mapping-cum-Institutional%20Assessment%20of%20Self%20Help%20Group-Study%20Report.pdf

4.     Gram Panchayat level federations, GPLF (n.d). retrieved from http://olm.nic.in/sites/default/files/gplf_opearational_manual_31-08-13_1.pdf

5.     Odisha Statistical Handbook (2009),    retrieved from http://www.desorissa.nic.in/latest_publications.html

6.     NABARD Annual Reports “Status of Microfinance in India”. retrieved from https://www.nabard.org/financialreport.aspx?cid=505&id=24

7.     Orissa Livelihood Mission, retrieved from http://olm.nic.in/

8.     Orissa Livelihood Mission retrieved from  http://olm.nic.in/sites/default/files/finance_manual.pdf

9.     Daily Pioneer (2015), retrieved fromhttps://www.dailypioneer.com/state-editions/bhubaneswar/countrys-50-most-backward-dists-include-eight-in-odisha.html (2015).

10.   NRLMretrieved from https://nrlm.gov.in/PromotionOfSHGFederationsAction.do?methodName=showPromotionOfSHGFederationsPage&encd=n

 

 

 

Received on 22.10.2018       Modified on 29.11.2018

Accepted on 27.12.2018      ©AandV Publications All right reserved

Res.  J. Humanities and Social Sciences. 2019; 10(1): 170-176.

DOI: 10.5958/2321-5828.2019.00029.9