Banking on SHGs - Nabard

278 <strong>Banking</strong> on Self-Help GroupsA.10.15 OdishaWho Needs to Borrow from SHGs?The Khond tribals of Thuamul Rampur block of Kalahandi district live ina part of Odisha that is known for both its food scarcity and starvationdeaths as well as the breeding ground of Plasmodium falciparum, thedeadly celebral malaria parasite. A reasonably assured water supply, grantsfrom the Integrated Tribal Development Agency (ITDA) and agriculturalextension programmes of a leading NGO of Odisha have helped the formerpractitioners of shifting cultivation to harvest a variety of fruits, vegetablesand medicinal plants to enhance their incomes and living standards.Nevertheless, the four-month lean season from May to August continues tobe a period of economic stress and scarcity.In one hamlet the women of this community have been organized intofour SHGs. They contribute ` 10 per month per head by way of savings.Their entire small monthly savings collection is religiously deposited in thelocal bank branch. Thus the Manikeswari SHG has built up an accumulatedfund of ` 16,930.The SHG with the encouragement of the promoting NGO, engages inthe trading of niger seed (alsi) for which ` 7,000 was withdrawn from itsbank account to buy the village produce of this crop and sell it at 25% profitover a three-month period. This translates into a small income of about` 125 per member.One would have expected that during the lean season that followed theSHGs would have been flooded with demands from their own membersfor consumption loans. However, no other withdrawals had been madefrom the group fund since the formation of the SHG. The reasons for theabsence of SHG loaning are not far to seek. The ITDA and the NGO havecreated a grain bank which is managed each year in turn by a different SHGand is functioning effectively. The grain bank idea is based on the villagers’own coping mechanisms of the not too distant past. The Targeted PublicDistribution System too provides highly subsidized grain. The small cashcommitments of the secluded community are met through new sources ofcash income from high-value crops. The villagers resort to the consumptionof ‘fallback foods’ such as the controversial mango kernels at times offood scarcity. In any event the members do not borrow from the SHG orwithdraw of their unutilized cash savings to fulfil their food requirements.SHGs themselves are not keen to lend to individual members at timesof scarcity. This is supported by the NGO—for fear of losses due to theinability of members to repay their loans. All this makes for a failure torotate SHG funds which lie idle for nine months in the year in the lowyieldingsavings account with the local bank. At the same time it gives an