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Endnotes
1 It is very hard to compare the size of the two main models by portfolio outstanding, because it has
not been reported yet for the SBLP (although it is understood that it will be reported for the first time
in the forthcoming NABARD annual report). However, according to an estimate communicated by
officials in MCID/NABARD, based on data for March 2005, the outstandings to cumulative disbursement
ratio is about 70 percent, reflecting the rapid expansion of disbursements in the last few years. Since
the average tenor of loans is about 2. 5 years, the ratio should decline in subsequent years, once the
rate of growth of disbursements stabilizes. Using this ratio for March 2006, the SBLP had a portfolio
outstanding of about Rs 8,000 crores, as against about 1,600 for the MFIs.
2 For the latest statistics on the programme, see the most recent of NABARD's annual reports "Progress
of SHG - Bank Linkage in India, 2004-2005" (the report for 2005-06 is still awaited) and for good
descriptions of the programme and of SHGs, Harper 2002a, comparing SHGs with Grameen Bank
groups, and Harper 2002b on the respective strengths of different SHPAs, written for a NABARD
conference in 2002, the other studies presented at the same conference (especially Puhazhendi and
Badatya 2002 and Seibel and Dave 2002), Fisher and Sriram 2002, and Harper and Arora 2005,
among many others.
3 The important recent study "Self Help Groups in India: The Light and Shades of SHGs" (EDA and
APMAS (2006)) discussed below and referred to henceforth as LSS, found that 51 percent of members
in the sample were poor in terms of the first two of four wealth ranking categories defined by the study
(the "very poor" constituted 15 percent, the "poor" 36 percent, the "borderline poor" 32 percent and
the "non poor" 17 percent). At 55 percent, the proportion of SCs/STs in the sample is higher than for
the country as a whole, and that of widows 10 percent, about the same as the All India figure.
The finding that the poor constitute about half of total SHG membership is in keeping with findings
from other studies. The first two categories above correspond with common (head-count) definition of
the poverty population as the share of the population which falls below a household expenditure on
minimum calories-based poverty line. We need to remember though that that the borderline poor are
also vulnerable to income shocks which can drag them below the poverty line, often permanently,
through illness and disability, or even death of the main breadwinner, and microfinance (including
microinsurance - see Chapter 5A - can both protect from, and help to overcome, such shocks. Secondly,
microfinance suffers from inherent limitations in reaching the very poorest of the poor, many of who
need to be, and can more efficiently be reached though social security programmes (or income
transfer programmes, sometimes referred to as social consumption). Microfinance is best suited to
reach the economically active poor, which may exclude some in the lowest decile or two of the
population that suffer from old age, ill health, or disability.
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