Mysuru: Around 200 women hoot and cheer as one of them jots down numbers on a blackboard. These, women, gathered under one roof, are the representatives of 120 self-help groups from around 50 villages in H.D. Kote, one of the most backward taluks in the Mysuru district. They are here, in Beechanahalli village, for their routine monthly meet, and are currently engaged in a friendly competition to see who saved the most the previous month.
There are many rules here – if you come late for the meeting, you’re fined Rs 10. If you don’t turn up, you’re fined Rs 25. If you use your mobile during the meet, you’re fined Rs 10 and so on. Yet, the air is thick with mirth.
Each month these women manage to save away a small part of the amount they have taken on loan (anywhere between Rs 2,000 to Rs 2 lakh, at significantly low interest rates) and contribute these savings to the federation’s functioning.
They get handsome gains for their trouble – the federation provides them with basic ration, milk and water. And each school-going child gets four notebooks and two pens.
While most members borrow money for personal purposes, like their children’s education, weddings and so on, others borrow to run their businesses.
Lakshmi, a 32-year-old woman from Beechanahalli, borrowed money for her dairy farming business. “Earlier, I used to milk other people’s cows and help sell the milk. Now, I own four cows myself and get at least 10 litres of milk per cow daily,” she says.
Pushpamani, the 40-year-old owner of a chicken shop, says the concept of SHGs goes beyond finance. “It is not just about the money. We share a bond. Women who wouldn’t otherwise step out of their homes are all a family now,” she says.
SHGs were first started three decades ago, in a place not too far from here. These groups were meant to ensure a free flow of micro-credits for women and to create a sense of collective responsibility among borrowers. SHGs have clearly achieved that. And much more.
How it all began
In the early 1990s, many of the region’s farmer cooperatives were going broke and credit systems failing. “There were many defaulters. Farmers, especially those growing cash crops had no ready money, and they had to turn to private lenders and loan sharks,” recalls William D’Souza, who was then working as an extension manager with Myrada (the NGO that started SHGs) and helping mobilise funds for farmers.
At the time, Myrada, then called the Mysore Resettlement and Development Agency, was working with around 300 co-operatives, helping and training their members in handling finances.
One of the problems was unwieldy loan recovery – each cooperative had at least 50 members and keeping track of each one’s finances was a task. So, Myrada broke these groups into smaller ones of about 20 people each, and named them ‘credit management groups’. “The idea was that a group would be made collectively liable for the credit taken. This was new and was welcomed by the members. The number of defaulters drastically reduced after this,” explains D’Souza.
As Myrada went out to promote their model from village to village, they began to notice that women were more interested in the idea than men. Sensing potential, they shifted focus towards empowering women through financial independence.
“Rural women really wanted to contribute to household earnings. We began to teach them skills and fund these skills with loans to give it wings,” says D’Souza. Soon enough, the NGO started imparting skills like basket-weaving, mat-making and knitting to the women in these groups as well.
Myrada’s idea built upon a similar one instituted in Ahmedabad way back in the 1970s. Ela Bhatt, a cooperative organiser and activist, had engineered a similar model there with her NGO, Self-Employed Women’s Association (SEWA).
Bhatt, who was then working with a textile labour association in the city, started a self-help group under the association’s women’s wing. She was inspired by similar groups in Israel, where self-employed women unionised to assert their rights.
The model, though successful, was limited to a few dozen women. Myrada expanded the concept and pitched the idea to the National Bank for Agriculture and Rural Development (NABARD) in 1986. The project received an amount of Rs 10 lakh for micro-financing SHGs. The pilot project became so successful that in 1992-93, NABARD went on to initiate an SHG-bank linkage programme.
Several state governments, starting with Tamil Nadu, quickly adopted the concept. Karnataka and Kerala followed suit, and soon enough, every state was following the model.
Fast forward to today – there are more than 8.5 million registered SHGs in India. They were loaned a total of Rs 38,000 crore by private and public sector banks in 2016-17. What started in the small town of H.D. Kote continues to touch millions of lives across the country.
Kathlene Reena is a student of journalism at the Asian College of Journalism, Chennai.