By Dr Moin Qazi
We live in a world where impoverished women face gross inequalities and injustice right from their childhood. From poor education to insufficient nutrition to low-pay employment, the sequence of discrimination is rough but all too common. But, there are silver strands in this dark discourse. Given an opportunity to fight hunger and poverty, a poor woman proves to be a better warrior than a man. We have witnessed how poor women have an innate and intense desire to move forward. They are hardworking, concerned about their dignity, their childrens present and future, and are willing to make personal sacrifices for the well-being of their family.
One step forward with community and technology
In India, community groups, known as self-help groups (SHGs), have been set up in villages and city slums to tackle specific problems of poor women through mutual support. The self-help group movement, over a span of 25 years, has grown massively with 85 lakh units operating across the country. The National Bank for Agriculture and Rural Development (NABARD) has embarked on an initiative of strengthening and positioning them as crucial pillars in financial inclusion. With this in view, it has been digitising the accounts of SHGs.
It now plans to scale up the digitisation and expand digital coverage to 100 districts by the end of this fiscal year. This could lead to an additional ?10,000 crore credit flow from the banking system to the SHGs over the span of one year. The total loan exposure of the banking system to these SHGs is about ?61,000 crore. The units also hold about ?16,000 crore in savings in the banking system as of April 2017. The self-help groups have their origin in the Self Help Affinity Groups facilitated by the Mysore Resettlement and Development Agency (MYRADA) that were adapted by NABARD for lending by commercial banks. The adapted version, which underwent modifications to suit the needs of formal financial laws, started in 1992 as a pilot project and was soon upgraded to a regular banking programme.
The mechanism behind these groups
An interesting dimension is that this digital intervention will also help build a credit history for each SHG member and this could be passed on to credit bureaus. One of the hurdles the banks faced while extending credit was the absence of credit history of the SHG members. Today, the digitisation coverage is spread across 25 districts with linkage to an NABARD portal called ‘e-shakti‘ so that any movement in an SHG account is automatically conveyed to the portal. In due course, this digital intervention will cover all the 640 districts.
A typical Indian self-help group consists of 10-20 poor women from similar socioeconomic backgrounds who meet once a month to pool savings and discuss issues of mutual importance. One of the key objectives of SHGs is to provide financial access to women through a system in which they cross guarantee each others debts. With help for starting businesses, impoverished women can earn money and support their communities as well as their families. They represent, perhaps, the best hope for fighting global poverty. According to a Harvard Business Review study, women in emerging markets reinvest 90% of every dollar earned into human resources their families education, health and nutrition compared to only 30% to 40% of every dollar earned by men.
Several reasons to promote SHGs
Commerce has a profound ability to make people put aside their differences and interact with each other.Before the self-help group came on the scene, I was zero, Kamla told us. We were sharecroppers. We could not find food to feed our children or clothes to dress them. Now we can buy food and lease land and send our children to school. I have repaid Rs. 5,000 for the loan I was given by my self-help group. I have money left over from which I want to buy a goat. Worldwide experience shows that when accessible finance reaches women, the benefits are particularly sustainable. Savings rates are higher, group life is more intensive, repayment rates are remarkable, enterprise growth and graduation are stronger, and there are measurable improvements in child nutrition and education, family health and household sanitation, shelter and general welfare.
SHGs influence those oppressive relationships arising from caste, class and political power, which have made it difficult for poor people to build a sustainable base for their livelihoods. As with any single strategy, this is not going to put an end to poverty. However, the plan is simple, low-cost, resilient and can be carried out by non-governmental organisations. What is most important is that development is truly in the hands of the people.
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