KARNATAKA - of Planning Commission

Karnataka Human Development Report 2005The impact will focus on issues related to theirability to cope with their livelihood needs, whichinclude incomes and basic needs, as well as withthe impact on gender relations in the home andon changes in society.The livelihood needs of thepoor – The income and basicneeds perspective of povertySavings and CreditCultivating the habit of regular savings andthe ability to access them when requiredthrough credit not only reduces signifi cantly thevulnerability of the livelihood base of the poorand their dependence, it also enhances humandevelopment. It enables them to borrow forurgent needs instead of going to moneylender,which increases their dependency since he/sheis often the one who provides them with labouremployment at low wages. This, in turn, givesthem a degree of freedom to bargain for betterwages and working conditions and enablesthem to build a capital base which, hitherto,was impossible since the exorbitant interestrates demanded by moneylenders siphoned offall surplus. The ‘feel good’ factor is evident in agroup that has been able to save enough in thegroup to meet with urgent needs. However, themembers of the group need to go further if theyare to justify the claim that savings empowerpeople. They need to ensure that savings andcredit are managed effectively.When asked why they joined the SHG, 88 percent of SHG members interviewed said that theprimary reason for their joining was that it gavethem the opportunity and motivation to savemoney regularly (NABARD 2002). 2This is a signifi cant piece of information, makingit possible to appreciate the fi gures given in2Page 22, Table 3.9, Impact of Self-Help Groups (GroupProcesses) on the Social/Empowerment Status of WomenMembers in Southern India, commissioned jointly by MYRADAand NABARD, designed by MYRADA and conducted by A.C.Neilson ORG-MARG (SRC), published by NABARD in November2002 and released at the Seminar on SHG-Bank Linkageorganised by NABARD at New Delhi on 25th – 26th November2002 to commemorate 10 years of SHG-Bank Linkage.Table 14.2 below as an indicator of the SHG’srole in building fi nancial buffers for members toovercome dependence and vulnerability.This represents a huge sum of money by anystandard, over which the members (95 per centof whom are women) have access and control.Studies made by MYRADA 3 have shown that inremote villages where the SHGs meet about 25per cent of the credit requirement, the interestrates of private moneylenders fall considerably– often by 50 per cent - and moneylenders fromoutside the village stop coming since the costof transactions cannot be met with the lowerinterest rates.A study of 64 SHGs in Chitradurga district(Berg et al, 1998) indicates that the averagesavings of members in the SHG increases as theirmembership matures.Loans to membersSavings made by members are pooled andloaned to one another. SHG members determinethe terms and conditions (these differ from SHGCultivating the habitof regular savings andthe ability to accessthem when requiredthrough credit not onlyreduces significantlythe vulnerability of thelivelihood base of the poorand their dependence,it also enhances humandevelopment.TABLE 14.2Savings by SHG members in selected major programmes(Rs. crore)Promoting InstitutionKarnataka Watershed Development (KAWAD)Society, through partner NGOs (upto February2004)Swashakti Programme (KSWDC, through partnerNGOs) (upto December 2003)Stree Shakti Programme (Department of Womenand Child Development, through anganwadi staff)(upto March 2004)MYRADA (NGO directly promoting SHGs) (uptoDecember 2003)3Internal (unpublished) studies conducted by MYRADA in2003 covering selected villages in Chamarajnagar, Mysore,Chitradurga and Erode districts to estimate the impact of SHGson the existing moneylenders servicing the areas.Total SHGspromotedTotalmembersenrolledTotal savingsmobilised inSHGs1013 16012 2.532139 38346 4.76100000 1479794 179.608359 130672 27.77Total 111511 1664824 214.66Source: Reports of KAWAD, KSWDC, Women and Child Development Department and MYRADA.295