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Naveen Forms Mission Shakti Dept: A Reality Check On SHGs In Odisha

The number of Women SHGs stood at 4.53 lakh in 2020 against 5.23 lakh in 2013. Many self-help groups literally work for the 'self-help' of their families, not for poverty reduction

Bhubaneswar: With the growth of women-led Self Help Groups (WSHGs) having stagnated in Odisha, it seems Chief Minister Naveen Patnaik in order to fix the plaguing ills in the SHG movement has recently come up with a new panacea – an exclusive department called Mission Shakti.

The numbers tell a shocking tale of the SHG movement in Odisha. While the State government is claiming that Odisha has 6 lakh WSHGs, the data with National Rural Livelihood Mission (NRLM) puts the number at around 4.53 lakh in 2020 as against 5.23 lakh in 2013.

IS THERE SHG SATURATION IN ODISHA?

The saturation point for SHGs has not reached in Odisha. The State needs over 1.6 lakh more SHGs. Take the instances of six districts – Bolangir, Balasore, Bargarh, Bhadrak, Ganjam and Koraput.

As per an assessment by the Odisha government’s own Mission Shakti, in association with World Food Programme (WFP), the six districts could have a maximum possible SHGs numbering to over 3 lakh in rural areas alone.

However, a senior Nabard official here said the realistic assessment (as per Nabard) is the State needs 1.6 lakh more SHGs.

REASONS BEHIND SHG VANISHING ACT

Many studies, including Nabard and WFP, had found that the business models adopted by most of the SHGs are unsustainable and have a high potential of failure in the absence of frequent loans.

Most of the loans are used for procuring raw materials, equipment etc. for the next season/cycle, while profits are not used for advancing their activities, said the WFP report.

For which, many SHGs turn sick and defunct in long term, explained the senior Nabard official and added that many SHGs are taking loans from Microfinance institutions that charge an interest rate of 20-25 per cent.

SELF HELP GROUPS’ ‘SELF HELP’ ACT?

The Mission Shakti – WFP report 2020 sheds light on the other side of the SHG story in Odisha. As per the report, during its study in six major districts in the State, it has come across some surprising developments.

The report said, “not all WSHGs formed were active. Block functionaries also indicated that some WSHGs, though constituted, had also availed loans with interest subvention but were not engaged in any livelihood and income-generating activity.”

ANOTHER BLOOPER

The study said, “While some WSHGs have taken multiple loans, it was also seen that members were not always using the loans for the intended purposes. In many cases, the loan amount was divided between the members and utilized by them on various household needs, such as purchasing an asset, investing in the husband’s business and for children’s education, etc.

LIVE INSTANCE OF ‘SELF HELP’

The study has come across an interesting instance. The study report says,

“A WSHG making terra cotta products in Baleswar had taken loan for seven times since its formation in 2001, amounting to around Rs17.7 lakh, which they had utilized for purchasing raw materials and for internal lending to meet members’ household expenses. Some members had even simply created fixed deposits in their banks from their share of the loan.”

ILLS PLAGUING WSHGs IN ODISHA

The report has identified the following additional ills.

  • The approach to income generation through activities conducted by WSHGs did not appear to be Some are using the loan to procure raw materials and equipment but almost none were reinvesting into expanding the activity, coverage or volumes.
  • Some WSHGs have formed Producer Groups to avail loan from OLM (Odisha Livelihood Mission) and also access the marketing services provided by ORMAS.
  • But the PGs are managed by LSPs (Livelihoods Support Persons), who is usually a male cadre.

The Big Fallout has been neither the profits generated by PGs or Federations trickle down to all WSHG members nor are the entrepreneurial capacities of WSHGs enhanced.

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