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

 

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.

 

 

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

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

 

Table 4: Sustainability analysis of federations in Developed Districts

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 (9^th), Coal Reserves (2^nd), Bauxite/ Aluminum Ore (1^st), Chromite (1^st), Manganese (1^st), Iron Ore (1^st) and Nickel (1^st), 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

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

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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/

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

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Received on 22.10.2018       Modified on 29.11.2018

Accepted on 27.12.2018      ©AandV Publications All right reserved