Rural Management Systems Series

The basis of the self help group exists prior to any intervention. The members are linked by a common bond like caste, sub-caste, blood, community, place of origin or activity. The intervenors, whether from the NGO, Bank, or Government must have the experience to identify these natural groups which are commonly called "affinity groups". Even when group members are engaged in a similar traditional activity, like basket weaving, the basis of the group's affinity is a common caste or origin.

MYRADA has adopted the self help group as the appropriate people's institution which provides the poor with the space and support necessary to take effective steps towards greater control of their lives in private and in society.

The self help group is not a static institution, it grows on the resources and management skills of its members and theirincreasing confidence to get involved in issues and programmes that require their involvement in the public and private spheres.

The SHGs provide the benefits of economies of scale reducing costs in certain areas of the production process which the members may decide to undertake as a common action. The group also provides a cost effective credit delivery system, as the transaction costs of lending decrease sharply both to the banks and the borrowers. The groups provide a forum for collective learning which rural people find more "friendly" and which is consequently more effective than the individual or classroom approach that is commonlyadopted. The groups promote a democratic culture and provide the members with opportunities to imbibe norms of behaviour that are based on mutual respect. The SHGs foster an" intrapreneurial"(1) culture where each member realises that while she/he needs the support of the group to achieve her/his objectives, the group also in turn requires her/his support in adequate measure. The groups provide a firm base for dialogue and cooperation in programmes with other institutions like Government departments, cooperatives, financial and Panchayat Raj institutions; if the groups are functioning well, they have the credibility and the power to ensure their participation in identifying, planning, budgeting, and implementation of Panchayat Raj programmes for theempowerment of the poor. The groups provide the individual member with the support required to exercise control over the pace, timing, size and schedules of loans and programmes, to broaden the pattern of asset provision to include a package which would help the individual to cover risk rather than to provide a single asset; it also helps to assess the individual member's management capacity which may fall short of what a "viable" investment package requires for optimum returns, as prescribed under regular IRDP norms.

The strategy therefore evolves around the potential of the SHG to provide space andsupport so that each of its members can identify and use opportunities for her/his empowerment both in private and public life, and the capacity of the SHG to relate effectively with other institutions.

It is, therefore, necessary that SHGs are promoted in a way that facilitates the development of a participatory and empowering culture. This in turn makes it crucial forall intervenors to empathise and be familiar with participatorymanagement practices in their own organisations before using participatory methods to identify and form SHGs.

The means used by the intervenors to identify these affinity groups are several; a few popular ones are:

- regular visits to the village, meeting with informal groups gathered around tea shops, temples, water spots, markets, provision shops, milk collection centres; special care should be given to visit and interact in areas where the scheduled castes and tribes live and where women tend to gather;

- involvement in a common action like desilting a pond, or building a road also helps to identify these groups, provided people organise the action themselves; it is noticed that in such cases they tend to work in affinity groups;

- participatory appraisal methods are useful since they too involve all the people in various exercises which helps to identify the various groups in the village, the assets and resources of each family, the people's perceptions of who is poor, their credit needs and seasonal variations in the requirement of credit, etc.

There are however, several constraints to the proper identification of affinity groups,for example :

- There are several programmes in operation which describe the functional units at the field level as "groups"; these are not self help groups in most cases: examples of such programmes are DWCRA, Literacy Groups, Mahila Samakhya and Milk Societies:

i> DWCRA groups are functioning well in several cases but have several constraints in becoming an SHG; for example:

- there is a strong, almost exclusive, focus on economic activity; those groups which are described as functioning are those which are engaged in an economic activity; the most common feature of functioning is a "group" activity in which all the members are engaged in the same activity though at times in various segments of the production process;

-there is no initiative to foster regular savings and investment.

-there is no provision for regular meetings to discuss credit needs, to establish priorities and to acquire the skills necessary to build and manage an institution.

- those groups which are functioning usually produce a product which is purchased by the Government, or where this is not the case, marketing is a major problem leaving goods unsold, with members losing confidence. In very few cases is the group taking the initiative to tap the open market; as a result, self help and self reliance is not the guiding culture of these groups;

- in many cases women in DWCRA groups are brought together from several neighbouring hamlets or villages; there is no common underlying bond on which trust can be built;

- many women leave the DWCRA group due to several reasons, many of them personal; no one, however, is asked to leave by the group because she is not abiding by its norms and culture; in a word, there are no effective sanctions operating within the group. In general, the groups have not developed a culture of their own; those norms that guide the group derive from and are limited to an activity, and are imposed from without.

The question raised repeatedly is whether a DWCRA group can become a SHG; it can, provided:

- the group is an affinity group, is small (less than 20) and is willing to save and invest in the activity it has chosen to pursue;

- is willing to allow a few of its members to form SHGs; there could be several affinity groups within a DWCRA unit;

- is prepared to explore possibilities of gradually catering to the open market;

- is willing to allow individual members to borrow for their own purposes whether for consumption, trading, small business or other economic activities;

- is open to expanding its agenda beyond economic activities to include women's issues.

ii> Literacy groups and Mahila Samakhya: these groups can be considered together, though they may not have the same objectives; they are similar to the extent that the groups are large, often heterogenous, including members from different castes and economic strata and even from different hamlets and villages; these are major constraints to their emergence as SHGs. On the other hand, theyprovide the opportunity for women to improve the skills they require to manage and maintain an institution; examples of suchskills are literacy and numeracy; they also build the confidence of women by organising them to lobby for their rights. These are all qualities that members of theSHGs require for the SHGs to develop into an institution. Every member must be able to participate effectively in the proceedings; they need to understand the Minutes of their meetings and figures in their pass books and have the confidence to organise common action.

It was reported in many areas that attendance tends to fall in programmes which focus only on literacy and awareness raising. The reasons are many but the main ones that emerge from discussions with groups are : (1) People want to go beyond literacy to programmes from which they derive some immediate benefit; after all - what is the point in going to school if one cannot get a job? (2) It is often assumed that those who fail to attend are not interested; enquiries have shown that in many cases absentees are willing to participate in the programme but not with the existing groups; they prefer to form another group of their own; in most cases this is an "affinity group". The skills of literacy and numeracy together with the self confidence that grows through common action especially in some of the Mahila Samakhya groups are good building blocks for SHGs. SHGs therefore can emerge from these groups provided that small affinity groups are allowed to form after the concept of the SHG is explained and discussed thoroughly; visits to functioning SHGs have proved to be very effective in explaining the SHG concept to newer groups of women.Discussions with such groups indicate that women are quick to see the benefits of building up a common fund over which they have control and ready access. The major motivating factors are:-

- the desire to go beyond "literacy" to tangible and immediate investments in income generating projects, to manage which they feel more confident after participating in the literacy and awareness programmes,

- their need for consumption loans and the high interest rates charged by local money lenders ranging from 5% to 10% per month.

iii> Milk Societies : these societies at the village level are examples of a group structure which is appropriate for the collection and handling of milk but is inappropriate for the management of credit. The milk society requires the larger producer to make the route viable; the small supplier (normally belonging to the poorer sections of society) rides on the back of the large farmer; it is this heterogeneity that makes the system viable. In an SHG, on the contrary, if larger farmers and members of rich families are included with the poor, their interests will collide; often the families of the richer women are the very money lenders against whose interests the SHG now operates both in terms of loans as well as in other areas like the demand for fair wages and payment for services which the poor sectors have traditionally rendered free of cost to the dominant families in the village. It is, however, quite feasible for the poor members of a milk society, if they have affinity linkages and are homogeneous in terms of incomes, to form an SHG. Experience with such groups of the smaller farmers and landless people owning dairy animals has shown that these members can borrow from the SHGs to meet expenses on animal health care, breeding and feed.

Groups of "eligible beneficiaries" : In the IFAD project several groups were formed of "eligible" beneficiaries under pressure to meet annual targets. The pressure to organise such groups arose because several members of the self help groups were not eligible for bank loans because of previous defaults on the part of their husbands, while others did not wish to take large loans. As a result, in order to target 10,000 beneficiaries in each District, over 20,000 members had to be organised into SHGs. This was considered to be a waste of time and effort resulting in the need for extra staff and failure to meet with annual targets. Therefore, the solution was to exclude the above categories and organise groups of only "eligible" women. A similar situation arises in PLAN projects where eligible families are first chosen on the basis of a child for sponsorship; these families are then formed into a group. If the groups are genuine SHGs they will function notbecause the members have joined a group as a condition to receive loans but because women have taken the initiative to build an institution on the basis of their own efforts; if, on the other hand, "eligibility" to receive benefits of some kind from an external source becomes the only basis for group formation, the group will probably dissolve once the benefits are received. In a genuine SHG, the group continues to grow and function even after the project period is over. If groups are to sustain their efforts, they need to be affinity groups as well as small and homogeneous, besides which they must have the freedom to develop their own rules and regulations and to include and exclude members according to norms which they lay down. Women who are brought together because they are eligible for loans perceive the formation of a group as a precondition to receiving loans; seldom do they go any further either in terms of building increasing self confidence or empowerment in social and private life.