Krishnabai in her shop set up from SHG loan
By Vidya Kulkarni
Once a landless agricultural labourer, Kushabai now owns two milch cows and a couple of goats. Her earnings of Rs.2,000/- per month on an average are almost double the income she managed to get from seasonal agricultural work. The economic activity has not only given her a sense of financial security but also induced in her newer aspirations for self-reliance.
Life began to change for this 50-plus woman from Nandura Budruk village in Babhulgaon block in Yavatmal district when she, together with nine other women in her village, formed a Self-help-group (SHG). The formation of Prerana SHG in 2001 has helped its 10 members to support themselves by initiating collective ventures for income generation. More importantly, this has raised the status of these diligent rural women from being labourers to micro-entrepreneurs.
This micro-entrepreneurship programme is based on the concept of Convergent Community Action (CCA) primarily laying stress on pooling common resources and channelizing it for the overall development. In 2000, the District Rural Development Agency (DRDA) launched the progarmme in partnership with a network of NGOs and with support from UNICEF.
The cows have become a secured source of income for Kushabai in Nandura Budruk.
Functioning of the SHGs
The SHGs run on the collective funds. This fund is accumulated from the fixed monthly savings of each member of the group. The group fund is then utilized for internal lending with an interest, much less than that charged by private moneylenders. Following a stabilization period of six months, the smoothly functioning groups become eligible to avail government schemes and can later even access credit from the banks and other private micro-credit institutions.
“Access to credit allows well managed, enterprising groups to take up income generation activities on individual or collective basis”, says Sadhna Dube, District Coordinator of the programme. Apart from this external support, mutual trust and unity among the group members generate required strength as well as solutions in dealing with problems. For instance, the Prerana SHG from Nandura Khurd was all equipped and qualified to access credit under the government-sponsored Swarna Jayanti Gram Swarozagar Yojana (SGSY) scheme from a year of its formation. However, the bank dismissed their proposal on the grounds that two of the group members belonged to a family of loan defaulters. This made the entire group unqualified to apply for loan. The group however did not give up and decided to repay the loan amount from the group savings.
Once the women crossed this hurdle they were entitled to an initial revolving fund of Rs.25,000/-, with a subsidy of Rs.10,000/-. They used part of this money to buy goats and utilized remaining amount as individual loans. As they repaid this initial fund within six months, the group became eligible for a fresh loan of Rs.150,000 at 18 per cent interest. In consultation with Sadhna Dube and other government officials, members of the Prerana SHG decided to buy cows and start a dairy. The group now owns 21 cows and is able to sell 35-45 liters milk daily to the government dairy at a rate of Rs. 9 per litre.
Working towards a quick loan repayment that will make them eligible for a subsidy of Rs. 100,000, a major share of the profit is utilized for this purpose.
Inspired by the social and economic empowerment that is an outcome of the SHG process, not surprisingly, men too in Nandura Khurd and in several other villages have come together to form their own SHGs!