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Prasanna Mishra

News Highlights

  • As on March 31, out of over six lakh Groups, 2,41,339 SHGs have been credit-linked and these have availed loan amounting to Rs 4,190.44 crore.
  • Serious thought should be given to consolidating the number of Groups for better nurturing and scaling up operations.

I view Mission Shakti initiative of the Odisha Government as a great piece of social engineering. The state, the eighth largest in area and the eleventh largest by population among all the states, has by now brought over seven million women under 6,02,013 Women Self Help Groups (WSHGs). Launched on March 8, 2001, on the eve of International Women’s Day, its initial objective was to have two lakh groups in two years. By March 2017, the number had reached 3,14,646 and now, over six lakhs. Government views Mission Shakti as a self-help mission for empowering women through promotion of WSHGs to take up various socio-economic activities through credit and market linkage.

Liberal financial assistance flows from the Government to a Group from the beginning. This has improved liquidity in rural families – a situation that was never so good before. Community Investment Fund is a huge amount of money for a Group to take up worthwhile viable programmes. After a Group has established itself, it is sponsored for Bank linkage for credit. As on 31st March 2021, out of over six lakh Groups, 2,41,339 SHGs have been credit-linked and these have availed loan amounting to Rs 4,190.44 crore. Target for 2021-22 is to draw credit of Rs 6002.52 crore for 2,80,150 SHGs. Average loan size for a Group last year was Rs 1.74 lakh. Government plans it to go up to Rs 4 lakh by 2022-23. In the current year, banks are getting sensitised to enhance the loan-size at least to Rs 2 lakh. 

On prompt and regular repayment, a WSHG is eligible to zero per cent interest facility for its loan up to Rs 3 lakh. This interest subvention amount is supposed to act as a catalyst for SHGs scale up activities. In 2020-21, Interest Subvention of Rs 125.54 crore was made available to 15 banks against a target of Rs 150 crore. Target for 2021-22 has been fixed to Rs 200 Crore towards Interest Subvention. The subvention requirement would go up substantially if the loan size goes up to Rs 3 lakh. So far, only 2.41 lakh WSHGs are Bank-linked; over 3.5 lakh WSHGs more could qualify for Bank linkage. If the present policy of interest subvention continues, the annual requirement of funds could then be of the order of Rs 1800 crores.

WSHGs are aggregated at the Gram Panchayat level into GP level Federations, which further aggregates to Block Federation at block and then to District Federation at the district level. Efficiency and performance of WSHGs vary. A well-documented Report of Mission Shakti and WFP India in June 2020 (to be referred to as Report, hereafter) indicates the existence of several inactive SHGs and candidly states that no real empowerment can be achieved if groups remain inactive. But many Groups do reasonably well as well and have ensured reasonable income for Members of WSHGs. In the six districts the assessment was made—Bolangir, Balasore, Bargarh, Bhadrak, Ganjam and Koraput --  the Report indicated per Member monthly income of Rs 3498; Rs 1849, Rs 7363; Rs3355, Rs2290 and Rs 10,824 respectively. The average turnover of WSHG was the highest in Koraput at Rs 12.96 lakh and lowest in Balasore at Rs 2.22 lakh. Mostly the WSHGs handled non-government schemes with Ganjam reporting highest participation in government schemes at only 5%.

The Report has flagged utilisation of loans by the Groups as an area of concern. Loan amount didn’t correlate with enhancement of income as in many cases the loan amounts were also utilised for household expenses ranging from husband’s business to cost of children’s education. Many Members needed sensitisation on profit and income. When loan did not carry interest, there is little hesitation to use the money for meeting consumption needs. The requirement to repay the loan on time is likely to be met by informal borrowing from friends. Improvement of liquidity in the household won’t dent persisting personal indebtedness unless the Members are adequately educated on financial management and augment their income.

These groups are engaged in different income generating activities including vegetable and mushroom cultivation, poultry, beekeeping, toy making, making terracotta items, pisciculture, Agarbati making, procurement of paddy, Business Correspondent Agents of Banks, collection of electricity dues. Under the Convergence programme of the government, many departments are providing training to WSHGs to enable them to perform activities of different sectors. There is however genuine desire from many Members for further training and on new areas like latest designs, technologies, mechanisation and market trends for activities such as tailoring and pottery. In many activities, dependence on men has been unavoidable. In some cases, the Report noted men seemed to play significant managerial roles in many groups, creating a “potentially exploitative arrangement and impeding independent decision making by the women members”. In many WSHGs “men dominated the management of activities, including maintenance of books of accounts, finances and marketing. Sales are also often carried out by male family members”. In the process, the Report said, “WSHG members are reduced to passive workers, with no stimulus to hone their own decision making power and managerial skills.”

Working of the WSHGs has thrown up many issues that need addressing to make the Groups more vibrant; productive and absorb more capital.  Members are in dire need for training in areas of financial management, marketing, bookkeeping. Many housewives need to learn that profit is different from income; they are in need of handholding in marketing – an arena dominated by men. The Mission should open permanent market outlets in a large number of towns and cities so that sale volume picks up. Branding is an area that needs urgent attention. Agarbatis, for example, is a commodity that is made by a large number of WSHGs throughout the state. Standardisation of inputs would help and the Agarbatis could sell under a Brand name. The Groups that are doing well with higher turnover and holding potential for higher growth, should be enabled to become Enterprises.

The role of WSHGs as an effective tool for women empowerment is widely appreciated in India and the country by now has 54 lakh WSHGs with 59 million women members. Odisha’s Mission Shakti, however, alone, has in its fold over 6 lakh WSHGs (11% of the country’s total) with 7 million (12% of the total) women members. There is no virtue in an open-ended linear expansion of the number of WSHGs. Serious thought should be given to consolidating the number of Groups for better nurturing and scaling up operations. The present arrangement for Interest Subvention needs fine-tuning. Capital at zero per cent would surely improve liquidity in households but could lead to higher consumption expenditure and may move the women to debt trap. A modified Interest Subvention should work towards a soft interest regime of, say, 4%. 

(DISCLAIMER: This is an opinion piece. The views expressed are the author’s own and have nothing to do with OTV’s charter or views. OTV does not assume any responsibility or liability for the same. The author can be reached at lonewalker.1942@gmail.com)

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