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

• Clients per field worker – 400 or 20 to25 groups.• Cost of promotion under minimalist financial services delivery model, Rs. 4,000.• Cost of promotion under microfinance plus model – Rs. 10,000 to Rs. 12,000.• Minimum scale of intervention – 150 to 200 groups or 2,500-3,000 members in ageographically compact area.Table 4.2 gives the scales of support provided to NGOs by different agencies for promotionof self-help groups. These data too suggest a convergence around the figure of Rs. 10,000 asthe average total cost of SHG promotion. It would appear that support, where available,would more or less cover the costs of SHG promotion. Similarly, RMK support of Rs. 4,000to NGO-MFIs is in line with above estimates of costs of promoting SHGs towards financialservices delivery.The best practice NGOs appear to be incurring slightly higher costs than those proposedabove. The variations from these figures can largely be explained by the following factors:(i) Staff costs: The evidence from the organisations discussed above suggests that 20-25 groups would be the norm for a field worker. In the case of MYRADA’s moreintensive development programme, one field worker promotes 12-15 groups. 98%of MYRADA’s field staff are graduates who command a comparatively highersalary. In the case of PRADAN it is the professional who is the field worker.Professional salaries at PRADAN are about five times higher than what fieldworker salaries would have been. Though they manage 30-35 groups (more thanthe proposed norm), it could be a factor in making PRADAN’s cost of promotionhigher. On the other hand, in the case of the CASHE project reportingcomparatively low average costs, apart from 80% of the groups being old groupsbeing strengthened, each field worker is catering to about 40-45 SHGs accountingfor the lower costs.(ii) Transport costs: NGOs, which provide motorcycles to field workers, incur lowercosts than those relying largely on public transport. It is both a matter of methodas well as efficiency of functioning. In remote areas where public transport isvirtually non-existent it makes sense to use motorcycles though it means highercosts. Thus the HCSSC or PRADAN worker with his/her motorbike in Jharkhandis clearly more expensive, but this becomes a necessity in a relatively inaccessiblearea. The counterpart field worker in Tamil Nadu could well be using theexcellent public transport system to access most villages.(iii) Training costs: MYRADA has probably the most comprehensive training andmonitoring programme for SHGs promoted by it. This includes 23 modules oftraining over 14 days. OUTREACH has 10 modules of training over 10 days.Thus these organisations incur higher training costs. On the other hand, forsmaller NGOs, access to funds and coverage under a major programme like Swa-Shakti brings with it promotion methodology and training materials and necessarysupport.(iv) Sources of regional variation: These include differences in average staff salariesdue to differentials in local wage structure. An intuitive approach does not go farenough to understand the contrasting situation. Thus, one may expect salaries offrontline workers to be higher in Karnataka or Tamil Nadu than in Jharkhand onaccount of the higher state of development in the former states. However, in thelatter suitable field workers are not available at the going pay scales. In thesouthern states frontline staff can be easily recruited at modest salaries because of35