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as cash with the groups, the true ratio would be lower still. A possible explanation is the high grant
contribution to SHGs for revolving funds in AP.
15 Leaders had higher access by about 25-30 percent, in both frequency and amount, although in AP,
APMAS (2005) found that on average leaders had received twice as much. However according to LSS
this was not an issue with other members, who recognized that leaders put in time and effort on behalf
of the group to access external loans.
16 On the analogy with ROSCAS (Rotating Savings and Credit Associations, or what are known as chit
funds in India) the study argues that longevity of a group is not necessarily a virtue, pointing out that
ROSCAS are short-lived, usually breaking up and forming again after each round. However it is
mistaken in stating that SHGs evolved out of ROSCAS - in India they were the result of a very deliberate
policy initiative by NABARD in the early 1990s, based on pilot project experimentation by GTZ in
Indonesia and the Philippines and MYRADA in India, and supported by the far reaching innovation by
the RBI in allowing banks to lend to totally informal (unregistered) women's groups without collateral.
ROSCAS in any case do not attempt to accumulate savings, unlike ASCAS (Alternating Savings and
Credit Associations), which do often last last longer than a year, and unlike SHGs, which save both as
an end in itself, and as collateral against which to borrow from the banks.
17 It should be noted thought that in three of the states the proportion ranges from 8 to 11 percent, the
average being brought down by Karnataka where it is below 2 percent, explained by more sustained
promotion by SHPAs, easier and more regular access to loans by bank promoted groups, and the
lowest involvement by government agencies, which among SHPAs show the highest proportion of
defunct groups.
18 APMAS (2005), discussed below, found that in 27 of the groups surveyed some dropouts owed more to
the group as loans outstanding than the value of their savings. This was factored in however, in LSS.
19 "Would appear", because interestingly, the study found no evidence of lack of trust or unhappiness
with group leaders or record keepers even in groups with weak accounts. Also, it found many banks
appear not to rely on group records but to maintain their own. At the group level there were in some
cases incomplete records of recoveries and interest payments, and at the bank level a tendency to
credit all repayments into the savings account and make only annual appropriations to the loan
account which increases the interest liability on SHGs. Reliance on their own records is largely forced
on the banks by the state of group accounts - the study found that only 28 percent of groups
maintained balance sheets or profit and loss accounts.
20 Overall, about one-third of the groups had their records maintained by a group office bearer, usually
paid for her services, and another third by an outside, locally recruited, para-accountant. SHPA staff
undertook the task in 28 percent of the cases, and an unpaid non-member, usually a relative or other
well-wisher, in the remaining 9 percent. SHPA staff are likely to maintain the best records, unpaid nonmembers
the worst. The quality of records is likely to be better in the case of SHPAs that focus on the
financial aspects of performance (as opposed to non-financial), although not invariably so, given the
variability in the quality of SHPAs and their staff The few SHPAs that have started computerization of
records and have introduced external (as opposed to internal) audit are beginning to experience a
difference. The state of records tends to be better in groups that have some schooling.
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21 This would seem to suggest a higher proportion of willful cases of overdues from non-poor borrowers
than poor or borderline. However leaders had lower overdues than members. As with the quality of