Self-help Groups as Financial Intermediaries in India ... - Sa-Dhan

4.3 Cost ComponentsAt the NGO level, the following broad components of direct costs can be readily identified:(i) NGO staff time;(ii) staff conveyance expenses;(iii) training and expenses on capacity building of SHG members including materials andexposure visits; and(iv) stationery, cash box and group meeting incidentals.Overhead costs at NGO/unit level include:(i) office rent;(ii) depreciation on vehicles, furniture, etc.; and(iii) cost of administration and support staff.A similar set of costs is required to be imputed for expenses incurred centrally or bygovernment or donor agencies or intermediaries towards the development programme. Whenadded to direct costs, these would aggregate to total costs of SHG promotion. The data on,and analysis of, the costs of support services incurred centrally at higher project levels havenot been covered in this study.4.4 Review of Costs under different SHG Promotion ModelsEstimates of costs of promotion per SHG that exists in the literature on SHGs do not offermore than an aggregate figure. NGOs that provide these data do not give the breakdown ofpromotion costs and its rationale. In this study an attempt has been made to address thisquestion with the assistance of leading NGOs. Table 4.1 gives details of the costs ofpromotion of SHGs of 10 leading NGOs/ projects engaged in SHG promotion as constructedfrom interviews and internal data. Though these are not scientific estimates and the costsreported are sometimes ambiguous or inconsistent, it represents possibly the first time thatsuch an exercise has been undertaken towards an understanding of the factors governing thelevel of costs incurred by different development agents. The estimates vary from Rs. 4,500 toRs. 25,000 for different types of SHG initiatives and differing items of cost covered.From the standpoint of costs we distinguish between four main SHG promotion “models”:(i)(ii)(iii)(iv)minimalist, which essentially focus on bank-linkage or SHG clients of MFIs;large project initiatives related to savings and credit and women’s empowerment;SHG promotion by leading NGOs engaged in livelihoods development;SHGs formed through local initiatives, including the district development agency.This classification may be overlapping and could be contested. However, the rationale for itis to distinguish between (a) SHG promotion by agencies other than NGOs, e.g. banks andNBFCs, which view the SHG essentially as a financial intermediary; (b) the several largeproject initiatives, usually state-supported, concerned with women’s empowerment whichprovide in addition a range of inputs to build women’s capacity but which do not includewider economic interventions; (c) the model represented by the study NGOs where SHGs areseen as part of a livelihoods development intervention and which exploit the economic29