2005年-世界发展银行全球_Sustainability_of_Microfinance_Self_Help_Groups_in_India___Would_Federating_Help__46页_398kb

Summary of "Sustainability of Microfinance Self Help Groups in India: Would Federating Help?"

Core Content

This working paper examines the sustainability of Self Help Groups (SHGs) in India and evaluates whether federating SHGs can enhance their financial and institutional viability. SHGs are a major form of microfinance in India, primarily composed of women, with over 700,000 groups obtaining more than Rs.20 billion in bank loans by 2003. These groups have demonstrated strong repayment rates (over 95%) and significant savings (at least Rs.8 billion). However, their sustainability remains questionable due to their small size and reliance on promoter organizations for essential services.

Main Points

Key Achievements of SHGs

• SHGs are small groups (10-20 members) that collect savings and provide loans to members.
• Over 700,000 SHGs have obtained bank loans, benefiting more than 10 million people.
• Repayment rates are high, at over 95%, compared to other poverty lending programs.
• Savings in SHGs are estimated to be at least Rs.8 billion (US$170 million).

Challenges to Sustainability

• SHGs are often dependent on promoter organizations for services such as account maintenance, training, and bank linkage.
• Many SHGs operate at a low level of savings and credit, which limits their ability to sustain themselves.
• Repeat loans are rare, indicating limited long-term reliance on banks.
• The program is heavily concentrated in South India, particularly in Andhra Pradesh.

Federations as a Solution

• Federations are promoted to reduce dependency on promoter agencies and enhance sustainability.
• They provide economies of scale, reduce transaction costs, and offer a broader range of services.
• Federations are more complex to manage and develop than other types of member-based organizations.
• Federations like those promoted by DHAN and MYRADA have different structures and service ranges.

Types of Federations

• DHAN Foundation promotes federations with more than 200 SHGs, paid staff, and a wide range of services.
• MYRADA promotes smaller, unregistered federations with limited services and no permanent staff.
• Resource Centers are newer models introduced by MYRADA, serving as platforms for multiple community-based organizations.
• Government Agencies such as SERP and Women Development Corporations also support SHG federations.

Key Findings

• Federations that provide financial services are more likely to be sustainable than those that only offer social services.
• The study highlights that federations with strong member control are better positioned for long-term viability.
• Federations typically have a three-tiered structure, with village-level SHGs, block-level federations, and state-level apex bodies.
• The paper concludes that federations can help SHGs become sustainable, but their success is influenced by both internal and external factors.

Case Studies

The paper analyzes three SHG federations and one thrift cooperative federation:

Profiles of Federations

• SPMS: Located in Tirupati, Andhra Pradesh. Supports 617 SHGs. Has a high average member savings (Rs.2902).
• KVK: Located in Tamil Nadu. Supports 242 SHGs. Has the highest average member savings (Rs.2319).
• SMMS: Located in Anantpur, Andhra Pradesh. Supports 206 SHGs. Has lower savings and limited external loans.
• SVAWTC: A federation of thrift cooperatives in Warangal, Andhra Pradesh. Has 11 primary groups. Offers higher interest rates and is one of the oldest federations.

Recommendations

• Federations need to strengthen member control and ensure financial independence.
• They should diversify their income sources and reduce reliance on external subsidies.
• Promoter organizations must transition from direct support to facilitating federations.
• Training and capacity-building are essential for the long-term success of federations.

Conclusion

The paper concludes that federations can enhance the sustainability of SHGs by providing economies of scale and broader service offerings. However, their success depends on effective governance, financial self-sufficiency, and the ability to operate independently of promoter agencies. The study recommends strategies to improve these aspects and promote more sustainable models of SHG federations.