An Evaluation Study on Women Self-Help Groups of Punjab

Master's Thesis, 2012

98 Pages







1.1 Evolution of SHGs in India
1.2 Self-help group approach to women empowerment

2.1 Profile of SHG members and functioning of SHGs
2.2 Impact of SHGs on its members:
2.3 Problems faced by SHGs

3.1 Locale of the study
3.2 Selection of districts
3.3 Selection of SHGs
3.4 Selection of sample
3.5 Operational definitions and measurement of variables:
3.5.1 Independent variables
3.6 Construction of research tools:
3.7 Pre-testing of the research instrument
3.8 Collection of data
3.9 Analysis of data

4.1 Profile of SHGs
4.2 Socio-economic profile of the SHG members
4.3 Functioning of SHGs
4.3.1 Criteria to select group leader:
4.3.2 Performance of various duties
4.3.3 Meetings
4.3.4 Distribution of members according to nature of contribution toward savings
4.3.5 Distribution of members according to the loan taken from SHG
4.3.6 Distribution of SHGs according to entrepreneurial activities
4.3.7 Factors influencing choice of enterprise
4.4 Opinion of members and officials towards functioning of SHGs
4.4.1 Opinion of members about SHGs
4.4.2 Opinion of officials about SHGs
4.5 Empowerment of women through SHGs
4.6 Problem faced by SHG members







The present study entitled “An evaluative Study on Women Self Help Groups of Punjab” was undertaken to study the profile and functioning of SHGs, know the opinion of officials/SHG members towards functioning of SHGs, asses the impact of SHGs on empowerment of women and identify the problems experienced by SHG members. A sample of 150 members i.e. 75 from Ludhiana and 75 from Hoshiarpur were selected through random sampling technique. The data were collected with the help of interview schedule. The study revealed that majority of the SHGs were formed during the year 2008-09, had 16-20 members in their SHGs and were involved in 4-6 entrepreneurial activities. Majority of the SHGs adopted monthly pattern of meeting and found regular in their contribution towards saving. The findings of the study also indicated that majority of the SHGs were charging interest on inter-loaning among members. Maximum numbers of SHGs were involved in food processing and beauty parlour, their major source of funding for running the enterprise was contributions made by the members. Findings further revealed that all the respondents indicated that SHGs had helped them to undertake income generating activities, set up micro-enterprise, improve availability of financial services and develop habit of saving. All officials agreed that SHGs helped them to undertake income generating activities to set up micro-enterprise with improved availability of financial services and have developed habit of savings. Majority of the respondents reported that there was improvement in economic resources of the family, women‟s own development, decision making regarding education, marriage of children and participation in social activities. Majority of the respondents achieved high level of empowerment through Self-Help Groups. The major problems experienced by members’ were lack of training opportunity and lack of guidance/ support from promoting agencies.

Keywords: Self-Help Group, Empowerment, Enterprise



‘Progress of our land cannot be achieved without active participation of our mothers, sisters and daughters.

Dr. S. Radhakrishnan

Women are almost half of the national population of the country, who are far behind in the development process as compared to the other half of the population. Their plight is visible through declining sex ratio. The birth of girl child is not welcomed in the family and result in female foeticide. Similarly female literacy is 53.7 percent in comparison to the male literacy which is 76.8 percent. Likewise malnutrition, maternal mortality, low education level, domestic violence, dowry deaths and sexual crimes are some of the dimensions revealing their status (census 2001). If this is the state of country’s almost 50 percent populations of the country how can we dream for shining India? A nation or a society moves ahead only through the contribution of all its members. Therefore mainstreaming of women population in development process is of utmost importance. Women are an integral part of every economy. All round development and harmonious growth of a nation would be possible only when women are considered as equal partners in progress with men.

Women are now entering the labor force in large number in many areas to ensure rural transformation. The image of women in the society is fast changing but it is difficult to define clearly the changing shape of the image. At this stage it is the duty of every one to remember the words of Jawaharlal Nehru: “In order to awaken the people, it is the woman who has to be awakened. Once she is on the move, the household moves, the village moves and the community moves”.

We need to realize that women’s issues cannot be compartmentalized and isolated as secondary issues in development as the future of development and society lies in the future of women. Women are sometimes victimized by development which leaves them worse off. Feminization of poverty has been noticed as a phenomenon in almost all developing countries. The statistics about women at a glance world over would throw light on gender bias in development of the world in 1.3 billion poor, nearly 70 percent are women. Between 75 and 80 per cent of the world’s 27 million refugees are women and children. Only 24 women have been elected heads of state government in the last century. Women hold only 10.5 per cent of the seats in the world parliaments. Two third of 130 million children worldwide who are not in school are girls. In most of the countries women work approximately twice the unpaid time men do. The value of women’s unpaid household work and community work is estimated at 35 per cent of GDP worldwide. Women are becoming increasingly affected by HIV today about 42 per cent of estimated cases are women. Twenty million unsafe abortions are performed every year resulting in the deaths of 70,000 women. In fact the noble laureate Amartya Sen shocked the world when he announced that 100 million women were missing from the global population figures (Vanitba 2004).

For the empowerment of women, several programs and schemes had been launched in the past few years by the Government of India in order to fulfill its vision of expanding women's horizons of autonomous decisions making and control over resources, becoming equal partners to their men folk to achieve “the ultimate goal of complete development”. Several programs and schemes brought economic and social reforms, but not in significant manner. This leads to search for alternative ways to serve the rural poor in general and rural women in particular. In such a search, the women self-help groups (SHGs) are praiseworthy (Kumar 2005)

Women’s development began mainly as welfare oriented programme in the first five year plan (1951-56). The second five year plan (1956-61) organized women into Mahila Mandals to act as focal points at the grass root levels for development of women. The third five year plan (1961-66) supported female education as major welfare measure. Similarly, the fourth five year plan (1969-74) continued emphasis on women’s education. The fifth five year plan (1974-79) emphasized training of women who are in need of income and protection. The sixth five year plan (1980-85) saw definite shift from welfare to development. It has recognized women’s lack of access to resources as a critical factor which is impending their growth. The seventh five year plan (1985-90), the development programmes for women continued with the major objectives of raising their economic and social status to bring them into the main stream of national development (Chaudhry 1996)

The eighth five year plan (1990-95) has focused on empowering women, especially at the grassroots level, through Panchayati Raj Institutions. The ninth five year plan (1997-2002) emphasized a new concept on empowerment of women by organizing women into self-help groups (SHGs). The tenth five year plan (2002-2007) suggested adopting a sector specific three fold strategy for empowering women i.e. social empowerment, economic empowerment and political empowerment. A diverse range of women organizations including self-help groups (SHGs) have developed in this context conveying a multitude of issues and purposes because empowerment of women through self-help groups (SHG) would lead to benefits not only to the individual women, but also for the family and community as a whole through collective action for development (Banumatty 2005).

1.1 Evolution of SHGs in India

The concept of self-help groups gained significance, especially after 1976 when professor Mohammed Yunus of Bangladesh began experimenting with micro-credit and women SHGs. The strategy made a revolution in Bangladesh in poverty eradication by empowering the poor women. In India the concept of self-help groups can be traced back to the Gandhian Gram Swaraj movement. It was mainly concerned with the poor and it is for the people and of the people. The existence of traditional saving groups has long and successful history in India. Informal SHGs oriented to saving and credit functions are not a new phenomenon (Desai and Namboodiri 2001). SHGs were widespread in the traditional and ancient times and they were the main basis of functioning of these societies. These groups acted as a major source for providing social and material support to individuals, families and communities in times of need. With the increase in modernization, the needs of societies have undergone a change. In response to this, there is a revival of traditional SHGs with new structure and content to support the changing needs of people. This new concept of SHGs was introduced in India in 1985 by NABARD. Most of the SHGs of the country are concentrated in southern India and about 29000 are in Andhra Pradesh alone followed by Tamil Nadu, Karnataka and Maharashtra (Rao 2002). Thus a new concept on empowerment of women by organizing them into Self-Help Groups (SHGs) was initiated in the ninth five year plan (1997-2002).

India has nearly 400 million people, living below or just above an austerely defined poverty line. About 75 million households therefore need micro-finance. Of these, nearly 60 million households are in rural India and remaining 15 million are urban slums. The current annual credit usage by these households was estimated in 1998 to be Rs. 465,000 million or US $10 billion. It is estimated that the number of small loans accounts from banks covered some 40 million households in 2000. The remaining 35 million households are perhaps meeting their credit needs from the informal sector (Fisher et al 2002). Statistics, available from National Bank for Agricultural and Rural Development (NABARD) 2003, suggest that more than 8.67 lakh SHGs in India made successful functioning, while NABARD‟s target of ensuring bank loans were extended to 1 million SHG‟s by 2008 with an average membership of 17, this would mean bank’s outreach to some 17 million members, the vast majority of whom will be women, with an average size of Rs. 1766 per family, Banks loans were made available to 11.6 million families in 2002-03: Beside the big donor agencies like NABARD, Small Industries Development Bank of India (SIDBI) etc. there are 2800 partner NGOs working extensively in this field. Two specific programs: Swayam Sidha and Sivashakti which envisage formation, stabilization and bank linkages of women‟s self-help groups were quite important. Southern region has significant share i.e. 64 percent in SHG bank linkage while Central India (11 percent), Eastern India (13 percent), Western India (6 percent) and Northern India (5 percent) account for nominal share. North-eastern region has negligible share i.e. 1 percent in total bank linked SHGs.

There has been skewed growth of SHGs across the country. The eastern and central regions accounted for 51 per cent of SGSY credit and 50 per cent of group under SGSY. While in case of NABARD sponsored SHG-Bank linkage programme, southern region accounted for 59 per cent of SHGs and 75 per cent of the credit disbursed in 2005 (NABARD,2005). On the other hand, Punjab has been classified as high volume and low penetration state (less than 25 per cent) on the basis of credit for SHGs and number of poor families receiving finance through SHG channel (Dasgupta 2005)

In India two major SHG networks have access to institutional credit. One is the NABARD sponsored SHG bank linkage programme and the second was Swaranjyanti Gram Swarozgar Yojana (SGSY) started by Ministry of Rural Development on April 1, 1999 by combining various programmes like IRDP, TRYSEM, DWCRA, SITRA and GKY. The NABARD sponsored programme has grown much faster than the SGSY programme, with 22.39 lakh groups under its purview and cumulative credit disbursed of Rs. 11397.4 cores (NABARD 2006)

1.2 Self-help group approach to women empowerment

“Self-realization and self-initiative are the two most powerful weapons to wash poverty out from the world map”. This dynamic quotation of world‟s greatest economist Chanakya is being translated to one word that is SHG. It is proverbially true that there is a great strength in unity. Once a group of people unite, they become strength to reckon with. They gain strength from each other for development or when it comes to fighting together. Micro finance through self-help groups (SHG) has become a ladder for the poor to bring them up not only economically but also socially, mentally and attitudinally (Rimjhim Mousumy Das 2004). Self-help group approach, in the recent years, has been rightly recognized as the best way of socio-economic empowerment of people living below poverty line in India and elsewhere.

Self-help groups are the voluntary organizations, which disburse micro-credit to the members and facilitate them to enter into entrepreneurial activities. Formation of self-help group of women in India has been recognized as an effective strategy for the empowerment of women in rural as well as urban areas. Since the overall empowerment of women is crucially dependent on economic empowerment, women through these self-help groups are enabled to involve in a range of areas such as health, sanitation, nutrition, agriculture, forestry etc. besides income generation activities availing micro-credit. SHGs are the effective instrument of women empowerment; SHGs have made a lasting impact on the lives of the women. Their quality of life improved a lot, they could develop their skills and abilities in various productive activities, there is increase in their income, savings and consumption expenditure, they can carry out any type of work without any fear, they have become productive and important member of the family, they got high self-esteem which enhances their capacity to work (Rekha.R.Gaonkar 2001).

Empowerment of women through self-help groups has benefited not only the individual women but also her family and community as a whole. It is true that the poor status of Indian women in villages can be transformed with the help of self-help groups. SHGs are the real pathfinders in the life of rural Indian women (Kumar V S, 2005). According to (Damyanty 1997) SHG are based on principles of need and collective action and thus provide self-reliance to women. The SHGs bring out the capacity of women in moulding the community in right perspective and explore the initiative of women in taking up entrepreneurial ventures. SHGs have inculcated great confidence in the minds of rural women to succeed in their day to day life. Empowering is not just for their economic needs but also through more holistic social development (Murgan and Dharmalingam 2000). SHG approach has emerged as a successful strategy for women empowerment in present time.

The concept of SHGs has gained a huge popularity in Punjab. Many institutions such as government organizations, non-government organizations, farmers clubs, health workers and banks are using this approach to empower women socially, economically and politically. In Punjab, SHGs are promoted by Ministry of Rural Development and Ministry of Co- operation to empower women. The movement of SHGs is functioning from more than a decade. But in Punjab sufficient data is not available regarding their functioning and role in empowerment of women.

Keeping in view the above mentioned knowledge gaps the present study entitled An Evaluative Study on Women Self- Help Groups of Punjab” was planned with the following specific objectives:-

1. To study the profile and functioning of selected Self-help groups.
2. To know the opinion of officials and Self-help group members towards functioning of self-help groups.
3. To assess the impact of self-help groups on empowerment of women.
4. To identify the problems experienced by SHG members.



Reviewing the literature is an integral part of any research study. It provides a base for planning and implementing any research problem and to know what already has been accomplished in particular sphere and related areas of significance and what needs to be done further. So it is desirable to review the relevant literature while handling a research problem. A brief resume of the studies related to the present investigation have been presented under the following sub headings:

2.1 Profile of SHG members and functioning of SHGs
2.2 Impact of SHGs on its members
2.3 Problems faced by SHGs

2.1 Profile of SHG members and functioning of SHGs

The structure of several of SHGs was mostly of homogenous nature in term of their socio-economic background, which contributed to the cohesiveness of the group was found in a study on structure and functions of self-help groups in Andhra Pradesh in Tirupathi block was conducted by Kumaran (1997). Nineteen SHGs promoted by voluntary agency were the population of the study. The data also revealed that lion share of the credit was used for consumption purposes followed by income generating activities. Self-help group was a powerful instrument f or lowering risks and cost of lending to the poor, particularly women. Microfinance also offered lucrative business opportunities to the financial institutions if implemented on a commercial basis. It had reached the unreached with good profit and excellent recovery percentage was explored by Shete (1999). The success story of “Srinidhi Women Self-Help group” in Dharwad (Karnataka) was conducted by Hosamani et al (2000). It was found that majority of the members of SHGs were from low income group, low level of education and from joint families. It was also revealed that the groups were able to earn a rate of return of 21 percent per annum on their savings. Gaonkar (2000) highlighted that individual loans were mostly used for productive purposes. The rate of recovery was found to be cent per cent although, monthly interest rate charged on individual loans was high. The decisions were taken by the group only after free and frank discussion and all the groups maintain the records such as membership register, minute’s book, saving ledger and the loan ledger. The growth of NABARD sponsored SHGs in India was the highest in Pondicherry (748.52 per cent) per annum followed by Haryana (497.22 per cent), Andhra Pradesh (370.31 per cent) and Uttar Pradesh (346.18 per cent) during the period 1997-98 to 1999-2000. It showed that most of the states, which had more agricultural potential formed self-help groups at higher rates as compared to other states of India. This is due to the more income of people of these states. Thus, the group matures for taking loan from banks early in these high-income states was explored by Kachroo et al (2000).

Bhatia and Bhatia (2000) highlighted that recovery of SHG's was higher than other credit extended to borrowers. Moreover, involvement of SHG's had helped the bank branches in recovery of old dues. They observed that there had been perceptible changes in the living standards of the SHG's members, in terms of ownership of assets, increase in savings and borrowing capacity, income generating activities and income levels as well. There was no specific pattern in the performance of SHGs among different regions, the southern region made an edge over other regions. Confirming to this situation, the SHG programme was found to be more popular in the southern region and its progress in other regions was quite slow, thus there was an uneven achievement among the regions. Older groups had relatively more positive features indicating their better performance than younger groups that confirmed the stability of the SHGs at the ground level was explored by Puhazhendhi and Satyasai (2001). A significant change in the participation of group members in diversifying income generating economic activities in rural areas was explored by Raghavendra (2001). Though the credit needs of members were not effectively met, the study suggested that the programme was financially sustainable. The members reported that they did not borrow from money lenders in emergencies any more. Resource constraint was a major detrimental factor to expand economic activities by these groups. The level of education of the groups was another factor obstructing structural changes. Ponnarasi and Saravanan (2001) studied the performance of self-help groups which were successfully functioning in Cuddalore district of Tamil Nadu. A comparative study on the performance of all the five SHGs functioning in Agaranallur village of Kunaratchi block was selected for the purpose of the study. The data revealed that group saving, lending pattern, financial assistance from banks was collected from the registers maintained by the respective SHGs. Among the five SHGs selected group II, had received the „Best Self-Help Group Award‟ for the following reasons. Group II had disbursed an amount of Rs. 2, 34,180 as internal lending which was almost twice that of other groups. In addition to their own savings, it had got an amount of Rs. 25, 000 as revolving fund from the banks of which Rs. 10,000 was a subsidy. This group had received an amount of one lakh rupees as loan from the bank, which was the highest amount among the five groups studied. Thus, group II had lent more than 86 per cent of its funds for productive purposes, whereas the other groups on an average had lent only 72.5 per cent for productive purposes.

Gupta and Shrivastava (2001) studied the working of SHGs in Daudi Junkar Village of Hoshangabad district, M.P. The study revealed that number of members in the group was between 10 -20. They held meetings weekly or fortnightly. The members saved a common fund which was created from pooled savings Members were from homogenous socio-economic background and had common interest. The study reported that in M.P the movement was not very old, till March 31, 2000 a total number of 2,272 SHGs were linked with branches of banks in the state. The role of an NGO named Chaitanya from Pune district of Maharashtra in mobilizing savings and in disbursing credit in the rural areas was studied by Tillkar (2001) and found that the NGO started its work in 1998 and had 142

SHGs by the end of December 2000, with a minimum of 20 women members each, spread over 52 villages. The total saving generated by these SHGs amounted to Rs.11.30 lakh till the end of the year 2000 and the total credit disbursed was Rs.30 lakhs. The study further concluded that women members of SHGs indicated that in addition to meeting the financial requirement, the SHG had become a platform for exchange of experiences and ideas besides social participation by each of them. It was also reported that the members of the SHGs and their households were given information by the officials of NGO regarding various development programme of the government which was not done before by any agency. The impact of SHGs in providing credit to rural women was explored by Madheshwaran and Dhaemadhikary (2001). The study revealed that there were no defaulters among the SHG members in the sample. This implies that even the poor can show financial disciple and that high rate of interest is not a deterrent for taking a loan. Members including the poorest said that the ease of obtaining a loan compensated for the higher cost. The study further observed that status of women, both within the household and outside has improved. Except for two non-poor, all others earned surpluses over and above the loan due. The study showed the poor earned enough to repay the dues.

The process of development of SHGs in Hoshiarpur district of Punjab was described by Vatta and Singh (2001). In this study there were 352 SHGs of which 199 belonged to below poverty line (BPL) and 153 above poverty line (APL) categories. A majority of the SHGs in both the categories (61 per cent) were linked to commercial banks, 28 and 11 per cent of them were promoted by Regional Rural Banks (RRBs) and Co-operative Banks respectively. The total saving generated by the SHGs amounted to Rs.48 lakhs during the period 1996-97 to 2000-01.The loan sanctioned to BPL/SHGs was as low as 7.4 per cent as compared to as high as 41 per cent sanctioned to APL SHGs. Despite considerable progress achieved in the formation of SHGs, the banks did not provide credit to BPL groups. The APL groups were able to get more benefits from these schemes because of their greater awareness, education and managerial abilities. Study also revealed that about 83 per cent of BPL groups were eligible to get loan but only 5 per cent of them could get it. A study to assess the economic, social and institutional impact of micro finance through SHGs was conducted by Anjugan and Alagumani (2001). The study reported that group was formed with 18 members; out of them only two had studied up to matric and remaining were illiterate. The average size of the family was only 4.2. Besides their own savings, the group received the first loan of Rs. 13,400 and a second loan of Rs. 25,000 from Indian Bank. The major purpose of loans advanced to 17 members was repayment of old debts from the money lenders which had accumulated to Rs. 54,200. The study also revealed that SHG helped them to use the loan properly and repayment was 100 per cent. The formation of SHG resulted in increased awareness of members towards girl’s education, improved outside contacts and decision making skills. The growth and development of Self Help Groups in Rajasthan was explored by Jairath M S (2001). The study revealed that in India, the SHGs registered a growth of about 86 per cent from 1994-1995 to 1999-2000. As against this, the state witnessed a little less growth of 75.59 per cent during the same period. The proportion of women groups in the total number of groups linked in the state stood at 31.2 per cent in 1993-94 and improved significantly to 80 per cent in 1999-2000. The impact of Self Help Groups on the economy of marginalized farmers of Kanpur Dehat district of Uttar Pradesh was studied by Singh (2001) and revealed that the average value of assets per household which was Rs. 31,625 in the pre- SHG situation increased by 47 per cent to Rs. 46,500 in the post-SHG situation. In the pre- SHG situation, the members of the group had taken loan from moneylenders for consumption purpose while none of the members approached the moneylenders after the formation of SHG. The per-household annual income also increased by about 28 per cent from Rs. 20,275 in the pre-SHG situation to Rs. 25,883 in the post SHG situation. The households were dependent on labour income in the pre-SHG situation. But after the formation of SHG, they drive maximum income from dairy. The SHG is now functioning in the place of moneylenders because loan could be taken any time as and when needed for any purpose.

Micro-finance: An Innovative Tool for banking with the Unbankables, a study conducted by Sethi and Atibudhi (2001) and found that, there were 933 SHGs with a total membership of over 13,000 in the district with maximum concentration in Bhawanipatna. The average group size was 14 and 82 per cent of the SHGs were women groups. Out of the total promoted groups, over 70 per cent had saving accounts in different banks. The per capita savings was found to be very low, being only Rs. 177. So far as saving mobilization is concerned, Narla block with 21 per cent occupied the first position whereas the average per capita saving was reported to be the highest in Bhawanipatna block. Only 28 per cent of the members of the SHGs in the district received credit support from the banks under the linkage programme. Sarker (2001) studied the working of SHGs financed by NGO, The Taj Mahal Gram Bikash Kendra (TGBK) in Hawrah district of the state, which provides micro credit to poor women, engaged in Zari industry, mobilized savings and promoted self-employment and micro-economic activities. The study revealed that due to wide spread landlessness; the families of SHGs were fully engaged in the traditional craft of golden embroidery. People with small savings had formed themselves into credit groups. The members of all the 10SHGs collected small savings within their groups. Eight SHGs had an average membership of 5-10 each and the remaining five had 10-15 members each. As regards saving-credit status of SHGs with NGO, about 90 per cent of the total households were credit linked with the NGO and none of the sampled household had access to formal credit. More than 70 per cent of the households which received credit from the NGO used it for production purpose. The recovery of credit was found to be over 65 per cent of the total size of loan taken by the SHG households. The socio-economic evaluation of the working of SHGs in Solan district of Himachal Pradesh in terms of their impact, issues and policy implications based on field study. The data were collected by Dahiya et al (2001) from 54 SHG beneficiary members drawn from six such groups from two development blocks of the district. Four out of these were women groups and two were mixed groups. The average family size of sampled SHG households was 5 and 51 per cent of the members were working. Over 54 per cent of the members were literate and only 7.2 per cent possessed post-secondary education. The monthly saving rate ranged from Rs.20 to Rs.100 and the interest rate on internal loaning ranged from 24 to 60 per cent per annum. The ratio of loan to saving ranged from 1 to 7.2 per cent.

SHGs performed very well on saving and borrowing front was revealed by Rao (2002). A study on Self-help groups is also found that the average saving of the members increased from Rs.75 to Rs.150 per month in post SHG situation, they got loans easily at annual interest rate of 22-24 per cent for consumption purposes, which was not possible prior to the formation of group. The functioning of SHGs was studied by Chatterjee (2002) and reported that SHG approach for economic development of this district had been gaining popularity since April 1999 with the introduction of SGSY. As within a year of launching SGSY, 75 SHGs had been formed in Rautamai village viz. 3 for zari works, 2 fisheries and 1 each for bee keeping and cattle rearing. In each of the group, 15-20 members were there and poor people belonging to all castes and sex were member of SHGs. Most of the members of these groups were illiterate and the group started with a saving of Rs. 20 each per month. It was found by Lalita and Nagarajan (2002) that mean age of the members of different groups varied between 28 and 40 years, out of 401 members selected majority i.e. 79.55 per cent were married and 70 per cent were literate. The schedule caste members formed the single largest majority. Agricultural laborers with/without animal husbandry activities constituted majority of 81.79 per cent of the group members. In case of poor members 35.94 per cent of the members had created assets as against 62.5 per cent in case of non-poor, credit facilities from SHGs had been used for education of children (8.48 per cent) , redemption of old debt (13.99 per cent), consumption needs (22.69 per cent) and for meeting emergency needs (6.73 per cent).

Role of Self-help groups in promoting micro enterprises through micro credit was explained by Kumaran (2002). Fifteen SHGs were selected on a random basis. Among them 10 groups were promoted jointly by NGOs and Banks, while the remaining five of them were DWACRA groups promoted by District Rural Development Agency. Findings of the study revealed that monthly meetings were regularly conducted by all the groups. Rate of participation of members in the meeting was very high in all the groups. Saving was regular in NGOs and bank promoted groups and irregular in the DWCRA groups. The socio-personal profile of the members showed that most of them were women in the age group between 26-40 years and were married. Caste wise distribution showed that about 25 per cent members were illiterate. Cost benefit analysis of enterprises set up by the members showed that the cost of production per month varied from Rs.100 to Rs.10, 000. About 17 per cent of the micro enterprise reported no profit or running at loss. Among the profit making units, the average monthly net profit was Rs.1235.

Jothy and Sunder (2002) in their study reviewed growth of self-help group programme in Tamil Naidu. The results revealed that 14 districts were covered in 1997-98. The figure rose to 28 in 1999-2000, indicating 100 per cent growth. While the number of groups and members increased from 5177 and 92743 to 26220 groups and 481733 members in 1999-2000. The programme recorded about 60 per cent increased coverage of weaker section. The SC/ST membership increased from 27.18 per cent in 1997-98 to 3.49 percent in

1999-2000. Dwarakanath H D (2002) studied the financial analysis of SHGs undertaken in Ranga Reddy District of Andhra Pradesh. These SHGs were promoted under DWCRA programme and the present SGSY project. Regarding the socio economic status study revealed that the DWCRA helped rural women to increase monthly income ranging from Rs.500 to Rs. 2500 depending on the enterprising activities taken up by them. The study also revealed that nearly 48 per cent of women groups involved in the production are in the age group of 19-35 years and more than 60 per cent of the members are in the age group of 35-50 years in which 63 per cent of them are SCs, 12 per cent of them are STs. It was reported by Chatterjee (2003) that till Nov. 2002, SGSY formed 3009 SHGs and out of these only 61

SHGs had started with economic activities. Further, it was observed that in many of the rural bank branches, there was severe shortage of staff. Most of the branches were functioning with one branch manager, one assistant and one attendant. It was also reported that after launching of SGSY, group formation for economic activities required three sets of accounts. Second bank account was related to sanctioning of revolving fund and loans by bank and third bank account relates to stating of economic activities. The Self Help Groups were promoted by government agencies rather than NGOs was found by Sarangi (2003). The block had formed

293 SHGs while engaging a total of 4384 rural women among whom 2617 were SC members and 15 were ST members. Almost all the groups of the Block-Mass (B-Mass) engaged in income generating activities such as rice selling, dry fish processing, cultivation, vegetable vendor, stone chips, mixture sweet making units and spice grinding etc. The B-Mass had a total saving of Rs. 10, 18, 017 at the end of March 2002. The Rushikulya Gramya Bank meets all the credit need of the groups in the block. A total amount of Rs. 10, 55,900 was disbursed as loan to 137 groups and a sum of Rs. 5, 86,927 had been recovered so far. A study conducted by NABARD (2004) in Wayand district of Kerala revealed that the average savings and borrowings per household increased by 98.58 percent and 43.38 percent respectively during pre and post SHG situations. The percentage of women members without any other work than housekeeping decreased from 14.7 per cent in pre SHG situation to 7.5 per cent in post SHG situation. Employment increased by 2.2 per cent i.e. from 118.13 man- day to 120.73 man-days per household during pre and post SHG period. The study further revealed that average net income per household increased by 32.12 per cent for members in group below 2 years of age and by 50.44 per cent for the members above two years. Average value of asset per household of 44.09 per cent members increased above Rs.10, 000 in post SHG period. It was found that 31 per cent of the household members of the SHGs were landless agricultural laborers and 54 per cent were small and marginal farmers. Nanda (2004) found that 70 per cent of the loans were used for income generation purposes and average net income of 33 per cent households increased in post SHG situation. About 64 per cent of the incremental income of the SHG member household generated from non-farm and off-farm activities.

Annual growth rate of SHGs linked with banks from March 1997 to March 2000 was 181.75 per cent as reported by Kachroo (2004). Among various banks, which provided loans to these groups, co-operative banks had shown more growth i.e. 75.07 per cent as compared to regional rural banks (27.68 per cent) and commercial banks (12.39 per cent) but physically commercial banks were contributing much more. Though the number of NGOs which were linked with SHGs had increased, yet SHGs credit linked through NGOs as facilitator and financing agency had shown a negative trend. It was further observed that region/ state wise performance of SHGs indicated a positive growth throughout except the state of Himachal Pradesh which had shown a negative trend due to lack of awareness among masses about the performance. The rate of interest charged was between 18 to 23 per cent per annum while the interest rates had fallen drastically in the recent environment and there were proportionately lesser groups in relatively underdeveloped states and in remote areas was explored by Anonymous (2004). A study on role performance of SHG leaders was conducted by Selvi and Krishnan (2004). The study revealed that among the fourteen roles taken for assessment of SHG leaders, seven roles were found to be performed by majority of the respondents namely ensuring participation of all members in every meeting (94.20 per cent), ensuring regular group savings by members (93.30 per cent), working for improvement of literacy of the group members (86.70 per cent), creating awareness of present social position (85.00 per cent) and motivating the members towards collective thinking and action (82.50 per cent). It was found that India has one of the largest microfinance programmes in the global micro credit market in 2003 which was 13 per cent of all clients in the world and 16 per cent of the poorest clients in the world. Nair (2005) study also revealed that micro credit significantly increased the flow of bank credit and saving to rural areas that contributed significant to the diversification of livelihoods in the non-farm sector. The loans were generally invested in supplementary activities in the farm and allied sectors.

The effect of SHGs on the socio economic aspects of the member’s households evaluated by Ramachandran and Seilan (2005) and revealed that 81.67 per cent of respondents had developed saving habits, 62.5 per cent had access to larger quantum of resources, 93.33 per cent contributed towards family income and 60.83 per cent got better leadership and communication skills after joining the SHGs. The fact revealed by Selvi (2005) that the members have considerable improvement in their lives after being members of self-help groups. Their lives are getting enriched both economically and socially. Their satisfaction is significant through various aspects. There is significant improvement in their income, expenditure, savings and standard of living. Hence it can be very well concluded that self-help groups are a boon to the rural mass both in empowering women as well as in acting as a poverty alleviation programme in uplifting them.

2.2 Impact of SHGs on its members:

An overall increase in the purchasing power and business income, besides their own empowerment, as expressed by the women members revealed in a study on “Srinidhi Women Self-help group” in Dharwad (Karnataka) conducted by Hosamani et al (2000) . The SHGs made a lasting impact on the lives of poor, particularly women by increasing their income and providing loans on lower rate of interest was explored by Gaonkar (2000). It was indicated by Nedumaran and Palansami (2000) that social conditions of the members considerably improved after joining the group activities. Promotions of SHGs in the rural areas, training to members and involvement of local NGOs in building the SHGs were suggested for the overall improvement of the household. Manimekalai and Rajeshwari (2000) found that women moved from the status of agricultural laborers to the owner of a micro business. The income of the group members had improved from a meager income of Rs. 4800 to Rs. 50874 after owning a micro enterprise thus providing them economic and social empowerment. SHGs could positively contribute to the economic and social empowerment of rural poor and the impact on the latter was more pronounced than in the former. The involvement in the group significantly contributed in improving the self-confidence of the members was explored by Puhazhendhi and Satyasai (2001).The impact of Self-Help Groups on the economy of marginalized farmers studied by Singh (2001), his study also compared the socio-economic conditions of members in the pre and post SHG situation. The findings of the study revealed that the average value of assets per household which was Rs. 31, 625 in the pre- SHG situation increased by 47 per cent to Rs. 46, 500 in the post-SHG situation. In the pre-SHG situation, the member had taken loan from money lenders for consumption purpose while none of the members approached annual income also increased by about 28 percent from Rs. 20, 275 in the pre-SHG situation. The households were dependent on labour income in the pre-SHG situation. But after the formation of SHGs, they derived maximum income from dairy. The SHGs were now functioning in the place of moneylenders because loan could be taken any time as and when needed for any purpose.

Borbora and Mahanta (2001) found that 80 per cent of the members in the selected SHGs were from poor families. The members of the groups were women who were engaged in gainful economic activities of 45 members selected for study, only 7 had saving bank account with the post office or bank before joining SHG. The programme has succeeded in inculcating the habit of saving among the members. As many as 57.8 per cent and 42.2 per cent people saved Rs.501 to Rs.1, 000 each. It also helped them to free themselves from the clutches of non-formal sources of credit. Forty-three of the sample beneficiaries could expand their income generating activities. The SHGs have helped to set up a number of micro enterprises for income generation. An analysis revealed a significant change in the participation of group members in diversifying income generating economic activities in rural area. Though the credit needs of members were not effectively met, the study suggested that the programme was financially sustainable. The members reported that they did not borrow money from lenders in emergencies any more. Resources constraint was a major detrimental factor to expand economic activities by these groups. The level of education of the groups was another factor obstructing structural changes. However, the group approach was becoming more and more significant in alleviating poverty and promoting income generating activities in the rural areas. Raghavendra (2001) reported that there is a greater potential for SHGs in implementing various programme for the rural poor in future.

Lakshmanan (2001) conducted a study to know the working of women SHG located at Mallipalayam, in Gobichettipalayam block, Erode district, Tamil Nadu. The SHG was started in September 1999 with the help of District Development Officers and Block Development Officers. Study reported that membership of the group was only ten, when it started and increased to 12 by 2000. It also revealed that during the initial stage, the SHG collected only Rs.20 from each member per week. The group obtained Rs. 25,000 as floating fund from Government of Tamil Nadu and Canara Bank. The members were engaged in the making of mats which were of good quality. Husbands of women members encouraged them in the proper functioning of the group. Dahiya and Pandey (2001) evaluated the self-help groups in Solan district of Himachal Pradesh. The study revealed that annual income per SHG member increased by 95 per cent. This was due to small investments made by these groups. Due to this increased income, the male members of the SHG households were coerced into giving up alcoholism, a widely prevalent social evil in the area. The SHG households could send their wards to schools and put up pucca residential houses in certain areas through increased family incomes. To know the impact of rural entrepreneurship training to womenSelf Help Groups Ahuja et al (2002) conducted study on thirty trainees belonging to various SHGs from different villages were the participants. Skills of stitching, embroidery, handicraft and quilting were taught alongwith one session of formation of SHGs, book keeping, group transaction and loaning etc. on assessing the impact of the training it was found that almost 66 per cent of the trainees were active and utilized the learned training skills. About 20 per cent were only doing it when motivated many times and over 20 per cent were not taking any initiative. Banerjee (2002) in his study revealed that after joining SHGs women actively participated in the financial decision making of family and they also contributed to the development of family as majority of members were sending their children to school and many of them could successfully check the liquor addition of the husband and other type of family problems.

It was found by Gurulingaiah (2002) that Abhivruddi organized and mobilized women in Self Help Groups had helped them to get financial assistance from the local credit institutions. The members of the SHGs had been meeting regularly and discussing regarding their financial support. Abhiiruddi had been successfully conducting and organizing different skill oriented training programmes for SHGs from the beginning they were encouraged to actively involve themselves in income generating activities. The impact of self-help groups on empowerment of women also studied by Rangi et al (2002). The study revealed that 44 per cent of the respondents borrowed money from internal sources of the self-help groups while

62 per cent of them had taken loans from the banks with the help of self-help groups. The internal loans from the SHGs generated an additional income of Rs 514. This figure was Rs 614 per month of external borrowings from the banks. Both types of loans to the members have benefited them directly and indirectly for the economic empowerment.

A study on microfinance in Malaysia found that repayment rate was as high as 99 per cent in microfinance. Rahman (2002) study revealed that most of the members managed to improve their income and contributed significantly to the household income, the active participation in economic activity by poor communities increased by 70 per cent and the beneficiaries purchased or built productive assets, movable and immovable household assets after joining the scheme. Moreover through micro financing the living standards of poor households also improved. Reddy (2002) in his study on SHGs formed by National Institute of Rural Development found that utilizing micro credit as a main intervention initiated a range of social and economic developmental activities and created positive impact on the status of women in their households and communities. Majority of the women felt that their husbands treated them differently after receiving loans and were more likely to be consulted on various family matters than before.

Pandian and Eswaran (2002) conducted a study to find out the impact of microcredit on empowerment of women in Sedapatti block at Madurai district, Tamil Nadu. Total of 191self-help groups that were functioning had been selected. Hundred women respondents who had availed micro credit were chosen using non-random sampling method from various villages. Results showed that majority of the women i.e. 59 per cent were running petty business units. The petty business units were mostly milk vending, petty shop, banana leaf cutting, vegetable vendors, cloth merchant, tiffin centre etc. as far as economic empowerment was concerned 68 per cent had positive outlook towards the financial self-reliance.

Women groups in different districts and mandals were continuously striving hard for a better future for rural women by enhancing the status of women as participants in the domestic, economic, social and cultural spheres of life was explored by Sabyasachi Das (2003). Regarding the economic impact, the study revealed that there was considerable increase in monthly income and expenditure of the respondents. The expenditure incurred was mainly on food, health and education related items. Regarding educational status the study reported that respondents were exposed to various awareness campaigns and multipurpose activities related to educational, economic, and vocational, health aspects by different social agencies. As far as the impact on social status, was concurred by Wadiwale (2004) that there was increase in participation by the respondents in outdoor activities, in family decision making and positive change in behavior of their husbands and family members towards them was observed.

The findings of the study showed that majority of the respondents were engaged in non-farm activities. The result implied that a shift from farm to non-farm employment significantly reduced the income because they were largely engaged in traditional and less remunerative activities examined by Nirmala et al (2004). The main benefits of SHGs were increased participation in social service and organized action, acquisition of new skills through training and better access to credit facilities. Majority of the respondents reportedly agreed to improved economic status and freedom from clutches of money lenders was explored by Mann (2005). Further, the majority of respondents opined that their financial position, assets holding pattern, confidence level and mobility had improved after joining SHGs. Selvanatban and Aravazbi (2005) in his study revealed that in TamilNadu SHG movement covers 29.84 lakhs women members, savings of Rs. 531.96 crores and credit availment of Rs 857.76 crores. It is true that the poor status of Indian women in villages can be transformed with the help of SHGs. As the success rate is high at many places in India the SHGs were the real pathfinders in the life of rural Indian women. SHGs enable the rural poor women even to save small amount of regularly. SHGs provide saving mechanism and also facilitate cost effective delivery mechanism for small credit to its members. Above all SHGs recognized every woman in productive employment to add value to the economy. SHG significantly contributed to the empowerment of poor women was explained by Revathi and Sumatha (2006).A case study of economic impact of self-help groups conducted by Tanmoyee Banerjee (2006) revealed that the poor women of the state had become active participants in the planning and implementation process of various anti-poverty programmes. By participating in various income generating-cum-development activities, the morale and confidence of women became very high. Capacity of the poor women of the state in several areas had gone up considerably. Swain and Wallentin (2007) tried to study the impact of micro-finance and SHG on women empowerment. The data used were collected from five states namely, Orissa, Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Uttar Pradesh (two district from each state). A general structural model was established by employing appropriate technique to treat the ordinal variables in order to estimate the impact of SHGs on women empowerment for 2000 and 2003. The results demonstrated that there was a significant increase in women empowerment of the SHGs members.

2.3 Problems faced by SHGs

Irregularity in payment, saving, repayment of loan, lack of mutual trust, non- adherence to norms set by the group, co-operation among members were the basic problems faced by SHGs members was explored by Kumaran (1997). Namboodiri and Shiyani (2001) found that SHGs had the limited scope for further growth in membership as their number cannot be increased beyond 20. It further revealed that the loan portfolio was dominated by consumption loans and hence there was limited opportunity for income generating activities. Due to lack of knowledge and education, people were not aware of self-help groups and its formation in the initial stages created lot of problems was explored by Kumaran (2002). There was much resistance not only from prospective members but also from their spouse. Lack of leadership qualities was another key problem faced in initial stages of forming the groups, which was due to inadequate education and their low socio-economic background. Madheshwaran and Dharmaadhikary (2001) in their study on self-help groups found that major challenge for micro-credit scheme was the viability of non-farm activities. Identification of the viable activities that yield a high rate of profit necessary to cover the interest rate on the loans and marketing of the produce were necessary for the success of SHG approach. SHGs suffered from lack of unity among members and failing to make the best use of time or resources was highlighted by Kulshreshta and Gupta (2002), sometimes suffered from corrupt leadership. The study further revealed that the group approach suffered from lack of solidarity among members and inefficient management on the part of members as well as the facilitating institutions.

It was found by Rahman (2002) that lack of availability of funds, political interference in the selection of beneficiaries, identification of activities and overlapping of credit and loan schemes to various beneficiary groups were the major problem faced by the microfinance. Karmakar (2002) in his study found that lack of credible non-governmental organizations caused the problem of up scaling of SHGs as there was no agency who could do social intermediation and the groups struggled to graduate from the stage of microfinance to the stage of micro-enterprise.

A study on‟ Experience of SHSY‟ in Gujarat conducted by Sud (2003) and found that problem of illiteracy was the main hindrance in the formation of group. Moreover there was little consensus in the group about the productive activity to be taken up. Padhi (2003) in his study revealed that legal constraints to NGOs acting as micro-finance institutions and risks faced by NGOs in mobilizing the savings were the main cause of less development of SHGs under model III (where NGO act as financial intermediator) in India. Dual membership was observed by NABARD (2004) in most groups. Most of the members‟ availed loan for non- productive purposes and group activities were mostly limited to availment of bank loan and lending to group members. Members face difficulty in marketing their farm/non-farm product due to non-availability of adequate linkage of market.

Nirmala et al (2004) in their study on SHGs in Pondicherry revealed that financial institutions did not give the loan to the groups in time. Some other problems faced by group were difficulty in getting raw material, competition from mechanized and better quality products and marketing. The absence of separate and systematic monitoring and evaluation of the performance of the already linked groups, the quality of book keeping by the members and inability of the SHGs to convert themselves into micro enterprise were the major impediments in growth of microfinance in India was observed by Nanda (2004). Dasgupta (2005) in his study revealed that to improve the conditions of availability of credit to poor the government should narrow down the scope of mandatory credit to micro-credit segments only and all the schedule commercial banks and foreign banks must be brought under the ambit of the mandatory credit and at the same time effort should be made to develop the NGO-MFI sector without which micro-finance could not be spread widely. The problems perceived by SHG leaders comprised harassment in opening bank account and lack of incentive for carrying out additional work were explored by Mann (2005).

Sinha (2005) revealed that group leaders used their position to influence group decision in their favor. It was explored that they borrowed loan more than other members of group. The group leader household had more than one client per household. Shylendra (2006) in his study revealed that despite the increased participation, the SHG-bank linkage programme reaches only about one third of potential borrowers and meets one tenth of the estimated demand for credit. There was also a huge imbalance in the spread of the programme across the states. To check the exploitation of the poor by the microfinance institutions few suggestions were given by Akula (2006). He suggested that establishing and enforcing initiatives like public audits, consumer protection laws, truth in advertising provisions and codes for ethical conducts will help in checking down the exploitation of poor.

The above studies simply demonstrate that SHGs are playing a vital role in extending micro-finance to the rural poor. The functioning of SHGs has been based on participatory mechanism and therefore the impacts of SHGs on its members in terms of empowerment, accessibility to credit, socio-economic change etc. has been found positive. Thus it can be concluded that SHG approach is useful for empowering women in different aspects such as economic, social, political etc.



The fidelity of research enquiries depends upon the appropriate methodological approach followed. It helps to arrive at meaningful findings, for which the research project always demands a systematic approach of the research methodology. Methodology may also be called as the description, explanation and justification of methods. The present chapter depicts the sampling technique used for selection of SHGs, leaders and the members, selection and construction of tools and techniques employed in collection and analysis of data. For the present study the methodology followed has been described under the following sub- headings:

3.1 Locale of the study
3.2 Selection of the Districts
3.3 Selection of SHGs
3.4 Selection of samples
3.5 Operational definitions and measurement of variables
3.6 Construction of research instrument
3.7 Reliability and validity of the instrument
3.8 Collection of data
3.9 Analysis of data

3.1 Locale of the study

The study was conducted in purposively selected two districts of Punjab state i.e. Ludhiana and Hoshiarpur.

3.2 Selection of districts

The movement of formation of SHGs was observed to be more concentrated among few districts of the state like Fatehgarh Sahib, Faridkot, Hoshiarpur, Gurdaspur, Ludhiana and Jalandhar. Out of these districts, Hoshiarpur and Ludhiana were purposively selected for the present study, keeping in mind the convenience of investigator.

3.3 Selection of SHGs

The lists of SHGs were procured from District Rural Development Agency (DRDA) and Department of Co-operation of Ludhiana and Hoshiarpur districts. The SHGs formed after the year 2004 were considered for the purpose of the study. An equal number of SHGs i.e. 25 were selected from each district by proportionate random sampling technique. Thus in total 50 SHGs formed the sample for the present study.


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An Evaluation Study on Women Self-Help Groups of Punjab
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evaluation, study, women, self-help, groups, punjab
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Shikha Singh (Author), 2012, An Evaluation Study on Women Self-Help Groups of Punjab, Munich, GRIN Verlag,


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