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

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through the SHG as a basis to source external borrowings 64 . This has to be set against reportsof an excessive accumulation of savings and poor off-take of loans in the absence of theavailable infrastructure support for SHG/MACTS members to undertake larger investments 65 .A study by FWWB (FWWB, 2001) of the financial sustainability of three of the moresuccessful MACTS in Andhra Pradesh that received loans from FWWB and BASIX revealsoperational self-sufficiency in the region of 85 to 90% and portfolio at risk in the range of 11to 35% during 2000-2001. These MACTS offer a range of savings products and also run aDeath Relief Assurance Scheme. Loans to individuals are provided at 21 to 24% per annum.However, the study report finds several deficiencies in book keeping, financial planning andmaintenance of the MIS.Nevertheless, the MACTS, whether formed at a small (cluster) level or as an apex of severalclusters federations of SHGs at the mandal 66 level, is being supported by agencies such asUNDP, CARE-India and the state government. NGOs are optimistic about the possibility ofMACTS attaining sustainability after about three years or so of their support. At the sametime the large-scale promotion of SHGs by state agencies have resulted in a situation whereonly about 20% of SHGs are functioning properly. The strengthening of SHGs, theirfederations and the formation of MACTS is a major exercise that is under way through theagency of the government-supported APMAS and with the support of DFID, CARE-India,BASIX and other major SHG promoters. One of the critical gaps that remain to be filled isthat of a supportive infrastructure, particularly in the form of business development servicesand marketing linkages to enable the utilisation of the savings and the loan funds of SHGsand MACTS into productive investment.5.3 Concluding ObservationsThe wide spectrum of emerging models of SHG-based institutions reflects the efforts ofNGOs and other stakeholders in addressing the challenge of sustainability. The multipleconstraints and opportunities that determine the types of institutions promoted include: (i) thelegal and regulatory provisions in the states of operation; (ii) the origins of the programmesand the broader vision for the community; (iii) the capacity of the NGO to supportmicrofinance; (iv) poverty contexts and social conditions in different areas; (v) theavailability of the physical and financial infrastructure and external support. With thepossible exception of some of the MACTS and mahila banks of A.P., in all other institutionalforms based on the SHG, microfinance is a major, but not the only, component within anagenda that encompasses livelihoods along with social and political mobilization. This hascontributed to building of the SHG as an institution, and is, to a large extent, contributory tothe success of the SHGs and their federations.As with virtually all other institutional forms, the financial viability of SHG federations hasnot been conclusively demonstrated. However, as community based organisations with loweroverheads and decentralised functioning they have the potential to provide cost-effectivefinancial services once necessary investments are made to strengthen their management.64 BASIX, APMAS (personal communication).65 CARE-India (personal communication). See also Seibel (2001) for an illustration of the excessive liquidityposition of Sneha Mahila MACS.66 A development block consisting of about 40 villages.52
6. IMPACT OF SHG-BASED MICROFINANCE PROGRAMMES: ISSUESAND EVIDENCEThe key to the success of a development programme is its effectiveness in bringing about thedesired change in the lives and livelihoods of the participants or the target groups it isintended to benefit. A fairly large body of literature has built up over the past few years onthe methodology of impact assessment for microfinance programmes. This is reflective of anincreasing donor concern with the outcomes of the interventions sponsored by them. Impactassessment studies are thus becoming an integral part of NGO activities designed both tosatisfy donor requirements as well influence policy-makers to ensure the flow of funding fordevelopment activities. Current thinking on impact assessment attempts to balance out oldstyleevaluation of projects with an understanding of the process of the intervention and theperspective of the participants and other stakeholders.6.1 Issues in Microfinance Impact AssessmentThe objectives of microfinance impact assessment are ranged across a continuum representedby the two poles of “proving impact” and “improving practice” (Hulme, 2000). The formerrepresents objectivity, accuracy and analytical rigour and is the major concern of donors,academics and policy makers. The latter is more subjective and process-related and directedat internal learning of practitioners and donor field staff. Correspondingly, in terms of themethodologies in impact assessment there is a tension between survey-based quantitativestudies on the one hand and qualitative approaches, such as case studies, and a range ofparticipatory techniques.A wide range of reviews and evaluations pass off as impact assessments of developmentinterventions. The critical evidence of impact, however, pertains to sustained net benefits tofamilies or participants covered by the programmes being assessed. Other agents can bebenefited positively or negatively as well. These benefits may be intended or unintended asthe effect of programme activities is mediated by other local or wider forces.A common definition that has emerged is that impact assessment is a systematic analysis ofthe lasting changes – positive or negative, intended or not – in people’s lives brought aboutby an action or a series of actions (Roche, 1999).A key component of an impact exercise is the identification of the “impact chain” or “impactpathway” which, through the changes in behaviour and practices brought about by anintervention, results in modified outcomes for the agent being studied. The chain can beexpressed thus:Inputs (activities) outputs effects or outcomes impactThe distinction between outcomes and impact is somewhat blurred, but the important issuehere is that we need to look beyond project activities and outputs in order to assess impact.A major problem, however, relates to the attribution of impact. The influence of externalchanges in the infrastructure or environment in the project area may affect the factorsintermediating impact. Thus a comparison has to be made between benefits realized by thegroup of intended beneficiaries and another similarly placed group not covered by the project.Where an integrated intervention is in operation, the attribution of benefits to a component of53
Page 4 and 5:
List of AcronymsAIAMEDAIMSAPMASASAA
Page 6 and 7:
EXECUTIVE SUMMARY1. Introduction1.1
Page 8 and 9:
self-management by members and scal
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6.4 On the other hand field reports
Page 12 and 13: sustainable self-help groups. An in
Page 14 and 15: 2. DEVELOPMENT OF SELF-HELP GROUPS
Page 16 and 17: average loan per SHG was Rs. 18,227
Page 18 and 19: • training and sensitising bank o
Page 20 and 21: organizational structure and the na
Page 22 and 23: Table 2.1 (contd.)S.No.ParticularsN
Page 24 and 25: the SHG from banks starts from pari
Page 26 and 27: • In either situation SHGs can co
Page 28 and 29: 3.2.3 SHG Federations Linked to MF
Page 32 and 33: 3.4 ConclusionThis section served t
Page 34 and 35: MYRADA,Karnatakaa.o.OUTREACH,Karnat
Page 36 and 37: Name ofNGO/StateDHANFoundation,Tami
Page 38 and 39: However, for a comparative analysis
Page 40 and 41: linkages with credit and savings 34
Page 42 and 43: out of 5,153 SHGs covered under the
Page 44 and 45: eceived revolving fund grants, cost
Page 46 and 47: the high level of educated unemploy
Page 48 and 49: CARE-CASHE Project(A.P.)(implemente
Page 50 and 51: Holy CrossSocial ServiceCentre(HCSS
Page 52 and 53: Agency/Programme5. Rashtriya Mahila
Page 54 and 55: microfinance intermediary 41 . Unde
Page 56 and 57: On the other hand, there is evidenc
Page 58 and 59: infrastructural and other constrain
Page 60 and 61: would not be possible while working
Page 64 and 65: the programme is particularly probl
Page 66 and 67: It is possible to query the methodo
Page 68 and 69: world. Other partners from India ar
Page 70 and 71: RECOMMENDATIONSIt is not clear what
Page 72 and 73: REFERENCESAIAMED (2000), Good Pract
Page 75: Mahajan, Vijay and G. Nagasri (1999
Page 79 and 80: Appendix 2: Types of SHGsTypes of S
Page 81 and 82: Appendix 3 (contd.)OrganisationSIDB
Page 83 and 84: 4. Trade based Group model: The est
Page 85 and 86: Appendix 5S.No.1. JOTHI 92,077.00
Page 87: Appendix 6: Stages of Evolution of
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Self-help Groups as Financial Intermediaries in India ... - Sa-Dhan

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