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

Table 4.1 Estimates of average cost of SHG promotion - per SHG (10-20 members)Organisation/Project/Area ofoperationType ofprogramme/SHGPeriod Costs ofpromotion(Rs. PerDetails of costs RemarksBASIX(µFA initiative)Khammamdistrict(A. P.)UNDP -SAPAP ProjectKurnool,Anantapur &Mehboobnagardistricts(A.P.)ApproachNBFC/MinimalistcreditProjectimplementedthroughNGOs/Microfinanceplusempowerment15-18monthsfromSHGformation tolinkage3 to 4yearsSHGRs. 4,5001.Service chargefor microfinanceagent (Rs.1,800).2. SHG trainingat BASIX3. Stationery, etc.Rs. 15,000 Yr. 1 – Rs. 2,000Yr. 2 – Rs. 6,000Yr. 3 – Rs. 7,0001.SHGs promoted through microfinance agents (µFAs)paid on performance through stages of formation,graduation and linkage of SHG with BASIX.2. Includes overhead costs at BASIX (approx. Rs.1,500).3. µFA is also paid a commission – one-eighth ofinterest collections from SHGs after linkage.4. Potentially sustainable model with income fromSHG loans paying for the direct cost of promotion.Payback period 4-5 years.1. Interactive work on social issues plus specificinputs on building SHG capabilities on savings andcredit.2. Seed capital provided to village organisations(VOs) (primary federations of 10-15 SHGs)3. Additional cost of promoting mandal federations(mandal mahila samakhya) is Rs. 20,000 per VO.(mandal = 40-50 villages)(25 VOs per mandal)4. Covers additional training, staff time, exposurevisits and expert fees.5. Groups/federations linked to banks/BASIX.6. Successor World Bank DPIP project in A.P. ismore comprehensive covering social mobilisation,social security and additional saving products -SHG promotion cost estimated at Rs. 20,000.37