A Self-Help Group (SHG) is a registered or unregistered group of members less than 20, having homogenous social and economic background voluntarily coming together to save small amounts (generally Rs 50-100 per member) regularly to contribute to a common fund and to meet their emergency needs on mutual help basis by the process of inter-loaning from this common fund. The group members use collective wisdom and peer pressure to ensure proper end-use of credit and timely repayment. The interest charges are usually kept as two to three rupees per hundred rupees per month. Generally, after six months of the formation, each SHG becomes eligible for bank loan which is sanctioned in the name of the Group itself without any collateral security. The amount of loan to the SHGs can be to the tune of one to four times of its savings. The loan can be used for any purpose i.e. to meet emergency needs or consumption needs or purchase of assets etc as decided by the group members (NABARD).

Members of the SHGs started savings as the prime work and this savings of the members opened the way for different income generating activities. In no time SHGs flourished in the development sector as a major tool for bringing economic development of the poor people particularly among the women folk in India.

The concept of SHG has a special significance for Himachal Pradesh due to its typical geographical conditions, difficult terrain, scattered and sparse population and bank branches at long distances. Hence supplementary flexible financial services are most suited for the state.

Out of the total SHGs credit linked in the country, Himachal Pradesh accounted for 1.1 percent of the groups linked in the country. This is quite creditable as the state accounts for barely 0.6 percent of the population of the country and the percentage of population below poverty line is only 7.6 percent (Planning Commission) as against All India 26.2% (1999-2000).

Though the SHG- Bank linkages program was implemented in other parts of the country, yet it was initiated in Himachal Pradesh in 1996-97 but picked up the momentum only from 1999-2000 onwards. The program has spread to the entire state. While a number of studies by NABARD have already documented the achievement and impact of SHGs in different states, there has been is no such study/documentation of SHGs in Himachal State. The present study, therefore, attempts to study the progress and performance of SHGs in terms of socio-economic conditions of SHG member households and evaluate the impact of micro finance on them. The study further assesses the problems faced by the SHGs members in the area and scope for future development.

In view of the rapid progress of self help groups (SHGs) both in the country and the state, there are a number of issues such as the formation and functioning of SHGs, the role of non government organizations (NGOs)/self help promoting institutions (SHPIs) in the growth of these groups, nature of the assets created and their income generating potential, the need and availability of supporting inputs, the role of structural factors like land, agricultural infrastructural facilities, and in the ultimate analysis, the impact of rural micro finance on income, employment and poverty, need to be examined.

To assess the impact of SHG movement on income and employment levels of tits members, the study, broadly proposes to evaluate the Progress, Problem and Prospects of SHG movement in Himachal Pradesh with focus on Solan District. The field survey has been carried out in Solan district of Himachal Pradesh. District is one of the pioneers in the implementation of SHG program. NABARD has prepared a scheme named Operation Doodh Ganga in the District. Operation Doodh Ganga aims at empowering rural women by securing economic autonomy for them. Operation Doodh Ganga is a project to transform hundreds of Self Help Groups of women into socio economic enterprises for bringing prosperity to rural households. It will provide livelihood opportunities to the members of Self Help Groups on a sustainable basis by encouraging them for taking up income generating activities and setting up rural micro enterprises in dairy.

More specifically, the study would be undertaken with the following objectives:

To assess the changes in the socio economic conditions of SHG members after joining the group.

To assess the impact of SHG movement on income and employment levels of SHG members.

To assess the role of Self Help Promoting Institutions (SHPIs) including banks, NGOs and Government agencies in promoting SHG’s.

To assess the repayment performance of members to SHGs and also SHGs to banks/SHPIs.

To evaluate the various problems /hindrances faced by SHGs and to offer suggestions for their sustainable growth.

HYPOTHESIS:

Formation of SHG leads to a significant difference in income, employment and consumption pattern of group members.

Self Help group leads to the creation of assets and generation of sustainable income for its members.

SOURCES OF DATA AND METHODOLOGY:

Both the primary and secondary data will be used in the present study. The source of secondary data is National Bank for Agriculture and Rural Development (NABARD), Also the annual status reports of ICDS, ACF, Office of the District Controller, Block Development Officer (BDO) and Child Development Project Office (CDPO) in district Solan. The primary data will be collected from the members of SHGs (formed in Solan District) through a well designed Questionnaire by conducting personal interviews of the sample households. For arriving at findings and conclusions statistical tools such as multiple regression, ANOVA, Simple averages, percentages, pie charts and bar diagrams are used.

Sample Design:

There are 5 blocks in the district Solan named Dharampur, Kandaghat, Nalagarh, Solan and Kunihar and for the purpose of study two blocks Kunihar and Kandaghat were selected randomly. Out of the two blocks by using simple random sampling method 15 SHGs with 60 households were taken for study. The total number of SHGs in the district are as follows:

Table:1

Particulars	Cumulative by March 2009
Total No. of SHGs in the District	4483
Total No. of blocks in the District	5
No. and Names of blocks where SHGs are credit linked	All five viz. Solan, Dharampur, Kandaghat, Nalagarh, Kunihar
No. of SHGs saving linked	4483
No. of SHGs credit linked	4027
No. of NGOs participating in linkage program	13
No. of additional NGOs to be roped in during the year	2
Total No. of bank branches in the district	144
No of branches participating in the linkage program	96

(NABARD: Potential credit linked plan 2009-2010)

Facilitators:

The study covered only the major SHG facilitators operating in the district which are:

1) Integrated Child Development Service (ICDS).

ICDS is a Government agency working under the umbrella of Social Justice and Women Empowerment Department of the state. ICDS has taken the program to all the villages covered by its Anganwadi Centers. As of date, ICDS had formed 2418 groups out of which 2184 groups have already been linked with different banks in the district. The groups formed and nurtured by the ICDS are high in quality and most sought after groups for linkage by the banks.

Diag: 1

2) Jagriti Mahila Kishan Club (NGO)

Jagriti Mahila Kishan Club was formed on 17th July 2005 by Smt. Kiran Koundal. Till date they have formed 85 SHGs with the help of NABARD and 50 to 55 SHGs with the help of PNB. There are about 1800 females associated with this club. This club is actively involved in SHG formation and credit linkage in solan district.

3) Ambuja Cement Foundation (ACF).

The Ambuja Cement Foundation is the Corporate Social Responsibility wing of Ambuja Cements Ltd. that works with the rural communities surrounding Ambuja’s manufacturing sites. ACF is present in Darlaghat and Nalagarh in Himachal Pradesh. Both these locations saw significant expansion in activities in the year gone by. The 112 Self Help Groups (SHGs) now in operation have a corpus of over Rs 61 lakhs. ACF was successful in liaising with the Government to start knitting classes for 30 SHG members. The final products are sold at Government emporiums. Facilitator-wise Sample SHGs and Beneficiaries Selected for the Study. The sample SHGs were formed in between year 2000 and 2009. All the groups were not linked with bank.

Table : 2

Sr No.	Facilitator	Sample Size
Sr No.	Facilitator	SHG	Members
1.	Ambuja Cement Foundation(ACF)	4	16
2.	Integrator Child Development Scheme (ICDS)	8	32
3.	Jagriti Mahila Kishan Club (NGO)	3	12
Total		15	60

Review of literature:

Suresh Karuppasamy (2010) studied the problems faced by the members of Self-help groups while marketing their products. The author concluded that the produced products were mainly sold in village town and district. They were not concentrated on state level marketing. It may be because of non co- operation from the other states or lack of finance. Government should take necessary steps to increase the sales of self help groups. Government should assure the purchase of certain products such as Seri culture handy crafts etc., which may increase the income of self help group members.

Gadenne and Vasudevan (2007) examined the credit behavior of SHG members by collecting data from five or more years old SHGs which were randomly selected from two specific districts in Tamil Nadu and Karnataka and were promoted by high quality NGOs .Two hundred and seven SHG group members from 69 different SHGs were interviewed. The author concluded that some of the SHG members used their loans for consumption purposes but majority of them have used it for income generating purposes. Members preferred the saving component of SHG membership but they continued to take credit from alternative agencies such as banks, chit funds or moneylenders in their respective villages.

Dasgupta (2001) examined the major issues pertaining to SHGs He concluded that micro financing helped in mobilizing savings, provides an access to the required appropriate credit to the poor, reduces the transaction cost for lenders and borrowers. He further added that the limited success of SHG was the absence of any target approach.

Datta and Raman (2001) examined whether heterogeneity and social cohesion coexist in SHG and How does these characteristics of SHG along with socio- economic conditions of member effect the working of SHG. For this purpose a random sample of 30 women SHGs with 355 members, under RASSO (Rashtriya Seva Samithi) were drawn from eight clusters in Triputi Area- during Dec.2000 to Jan 2001. The author concluded that joining of group leads to less dependence of members on external resources, higher education of members, higher banking habits and low SHG expenditure contributed to higher SHG net income per member.

Puhazhendhi and Jayaraman (1999) evaluated the performance of informal groups promoted by MYRADA in Southern India both in terms of empowerment of rural women through participation and employment generation. For the purpose of study 25 randomly selected Credit Management Groups (CMGs) promoted by MYRADA were taken for analysis from Chitradurga in Karnataka and Periyar district in Tamil Nadu. The study concluded that the informal groups with active intervention of NGO, adequately supported by training and financial assistance, ensured and significantly improved women participation.

Findings and Conclusions

The following findings were made after the field study and analysis of questionnaire.

Membership:-

All the15 sample SHGs were women groups. The 15 sample SHGs were having 165 members at an average of 11 members per group. Even though the ideal size for an SHG was 10-20 members, there were two groups having members less than 10.

Educational Status of Members:-

Table: 3

Age	Illiterate	Primary	Matriculate	Graduate	Total
<20	--	--	--	3(60)	3
21-30	--	--	--	--	--
31-40	8(61.5)	4(16.7)	10(55.6)	2(40)	24
>40	5(38.5)	20(83.3)	8(44.4)		33
Total	13	24	18	5	60

Out of total 60 members 24 members have primary education out of which 16.7% are in age group of 31-40 and 83.3% are in age group of less than 40.There are only 5 graduates out of which 60% are in age group of less than 20 and 40% are in age group of 31-40.

BPL Members:-

Among the members of sample SHGs not even a single member was living standard Below Poverty Line (BPL).

Occupational Pattern of Members of Sample SHGs:-

About 65 per cent of the members belonged to small and marginal farmer’s category. About 30 per cent of members are doing small business activities like small shops, beauty parlor, knitting, stitching. These members usually belong to the groups formed by ICDS in solan as they have easy access to market they put up stalls thrice a month in children’s park solan. Few members are raising cattle mainly cows and sell milk.

Savings:-

Out of the 15 SHGs, 10 groups are saving Rs.100, 4 groups are saving Rs.50 and one group is saving Rs.20 ever month. As discussed above there are on an average 11 members in the group so there savings per month fluctuate from 1100 to 220.. All members tried to be regular in payment of their monthly contribution.

Percentage wise distribution of saving of SHG group

Table: 4

SHG	saving/Member	Saving	% of total saving
10	100	1100	58.82
4	50	550	29.41
1	20	220	11.76

Diag: 2

Meetings:-

The groups were very particular about the regular meetings. Of the sample groups, all the SHGs are holding meetings once in a month. anganwadi etc. The group members were ensuring participation by all members. All important decisions including savings, loan, inter-loaning, interest, sanction, disbursement and repayment of loan, etc. were decided in the meeting. Records were maintained by either the President or Secretary of the group or any family member of a group member.

On Lending (inter-loaning):-

After four to five months of regular savings, the SHGs started on lending among own members. All groups were having a contingent fund, between Rs.4400 and Rs.2200, with either the Secretary or the President in order to meet any urgent financial need of the members. The amount of loan was usually decided unanimously in the regular meetings.

Bank linkage:-

Among the sample SHGs, 10 groups had availed bank loan. The bank officials also interacted with the members regarding their requirements, purposes of loan, etc. and advised the members to be regular on repayments and other terms. Mostly the office bearers of the SHGs were attending the operations with bank.

Rate of interest:-

The rate of interest on on-lending was a 2 percent in all the groups. The interest rate varied between9.5 percent to 11 per cent per annum for borrowings from the banks. The Borrowing members were paying the interest regularly to the group and bank every month and the principal at convenient date.

Utilization of funds:-

The SHGs utilized their savings, bank credit and other incomes in two ways either, in group activity or in individual activity.

In case of individual activity, the borrowing members were deciding the activity they wanted to undertake. A member could borrow for consumption purposes or for taking up any business activity or any other reason. Out of 60 sample SHG members about 70% of the members use their borrowings for consumption purpose. Only 30% of members utilized there borrowings for small business, trading activities or for agriculture purpose.

Diag: 3

Social Impact

SHG Bank Linkage Program had motivated the people to live in unity. The members learned to live for each other and fight against all problems together. The SHG members were extending support to Anganwadi Workers to identify adolescent girls for consumption of iron and vitamin tablets, extending conveyance for pregnant woman and other health related programs. Apart from this two groups were taking up initiatives for keeping the village clean. The women had gained confidence to put forth their demands before the officials of NABARD, SHPI’s, Banks etc.

Economic Impact

Around 30% of the members are undertaking small business activities with the support of micro-finance. Members of many groups usually formed by ICDS sell their hand made products like pickles, chatni, papar, bari, teddy bears, woven sweaters etc by putting up stalls. The members of this SHG’s have also started rearing animals and are selling milk in the nearby markets. Out of 15 sample SHG’s, there are only few groups involved in common business activities. Two groups namely Nari Prerna formed by ACF and Lakshmi formed by ICDS have started their individual enterprise.

Out of three SHPI’s, Ambuja Cement Foundation have formed 112 SHG’s out of which only 20 groups have been linked with bank. Jagriti Mahila Kishan Club have formed 50-55 SHG’s with the help of PNB and 85 SHG’s with the help of NABARD out of which 110 are linked with bank. ICDS have formed 2,418 SHG’s in Solan district out of which 2,184 are linked with bank.

Table: 5

Facilitators	Total number of SHG’s formed (2010)	Total number of SHG’s Bank-linked (2010)
ACF	112	20
Jagriti Mahila Kishan Club	170	110
ICDS	2,418	2,184

Diag: 4

There are about 144 bank branches in Solan district out of which 96 branches take part in micro finance. There are hardly any visits by bank officials during pre-formation and post-formation stages of self help groups. Bank branches are not able to supervise all the SHG’s effectively due to lack of staff.

Most of SHG members are uneducated and ignorant about the systems of linkage with institutional credit. They are also unaware of the empowerment process. A more careful supervisory role, especially the financing banks and SHPIs, may make things better.

Some SHGs have opened savings accounts in more than one bank, banks may discourage groups to open a/c simultaneously in multiple banks.

CONCLUSION AND SUGGESTIONS:

Most of SHG members are ignorant about the systems of linkage with institutional credit. They are also unaware of the empowerment process. A more careful supervisory role, especially by the financing banks and SHPIs, may make things better.

There are hardly any visits by bank officials during pre-formation and post-formation stages of self help groups. Bank branches are not able to supervise all the SHG’s effectively due to lack of staff. Sensitisation of bankers, NGO facilitators, Government departments is required to give the program the necessary boost.

Means for Expansion of linkage Program there were 49 Farmers’ clubs in the distt. as on 31.3.2009. The services of Farmers Clubs shall be utilized for expansion of SHG linkage program.

The outreach of NGOs working in the district can be expanded to cover the SHG program in the district.

Pro-active role by the government agencies and other development departments needs to be ensured.

Banks may act as Self Help Group Promoting Institutions for promotion of SHGs.

Strong marketing network is called for effective and proper marketing of product and services of micro enterprises linked SHG’s

Federations of SHGs should be formed in the district.

Even after the one year of launch of operation Dhood Ganga not many groups are benefited by it. Most of the groups are facing problem in getting loan under the scheme, due to insurance and medical certificate of cattle. Most of SHG members are ignorant and do not know how to obtain insurance and medical certificate of cattle. Therefore financing banks and SHPI’s should extend their help and guidance to SHG’s in obtaining insurance and medical certificate.

More number of entrepreneurship development training programs may be arranged for the SHGs members.

Efforts should be made to spread the concept through Farmers’ clubs and make some of the Farmers Clubs as SHPIs.

Thrust should be given to spread the SHG program in the left out villages for which NGOs and promoting agencies will be encouraged.

CONCLUDING REMARKS:-

Government of Himachal Pradesh has estimated that out of the total population of 61 Lakh (2001 census) in Himachal Pradesh, the population of the rural poor was 14.30 Lakh (23.44%) and the number of rural poor households was 2.86 Lakh, Assuming a minimum coverage of 10 households per SHG, the ultimate potential of SHG formation in the state works out to 28,600 covering all the poor households. As on 31 March 2010, 52630 SHGs have been formed out of which 48573 SHGs have been credit-linked. Thus in Himachal Pradesh, the SHG-Bank linkage program has gone beyond the concept of “Banking with Poor” with the credit linkage of 48573 SHGs.

The SHG movement empowered the rural women and rural poor who remained always in the borrowing domain , now could find themselves with surplus and on lending side probably only because of the magic of micro finance and the group approach under SHG Bank linkage program. However it created a positive socio and economic impact on its members but has failed to reach adequately to the below poverty line people in the area.

BIBLIOGRAPHY:

Books:

1. NABARD Handbook on Forming SHGs.

2. Karmakar, K.G. (2008). “Micro finance in India”. Sage Publications, Delhi.

3. Karuppasamy, Suresh. (2010) “Marketing of Products Produced by Self Help Groups”ezinearticles.com

4. Khandeker Shahidur R. (1996). “Grameen Bank; Impact, costs and Program Sustainability”, Asian Development Review 14 (1): 97130 Published by World Bank.

5. Somnath, S.V. (2009), “Microfinance Redefining the Future.” Published by EXCEL Books, New Delhi.

Journals:

1. Arabi, U. (2009), “Micro Finance Initiatives (Models) in India: A Performance Appraisal.” SEDME, Journal of National Institute of Small Industries Extension and Training, Hydrabad Vol. 36 (1), Dec., 2009. PP 71-94.

2. Dasgupta, Rajaram (2005). “Microfinance in India: Empirical Evidence, Alternative Models and Policy Imperatives”, Economic and Political Weekly, 19 March.

3. Dasgupta, Rajaram. (2001). “An Informal Journey through SHG” Indian Journal of Agriculture Economics, Vol. 56.No. 3, July-Sep, 2001. pp 370-386.

4. Gadenne Lucie, Vasudevan Veena, (2007), “How Do Women in Mature SHGs Save and Invest Their Money? Evidence from Self-Help Groups in India.” Institute for Financial Management and Research Centre for Micro Finance, Working Paper Series No. 18November 2007, CARE India.

5. Puhazhendhi, V and Jayaraman, B. (1999). “Increasing Women’s Participation and Employment Generationamong Rural Poor: An Approach through Informal Groups”; Indian Journal of Agriculture Economics, Vol. 54, No.3, July-Sep., 1999. pp 287-295

Received on 13.09.2010

Accepted on 31.10.2010

INTRODUCTION: