Self Help Group
Self Help Group (SHG) is a group of 12 to 20 women of the same socio-economic background who come forward voluntarily to work together for their own upliftment. The unique feature of the SHG is its ability to inculcate among its members sound habits of thrift, savings and banking Regular savings, periodic meetings, compulsory attendance, and systematic training are the salient features of the SHG concept. Each group selects one animator and two representatives from among themselves. The animator is responsible for providing leadership to the group and to maintain the various registers. The representatives assist the animator and maintain the bank accounts of the group.
Self Help Groups consist of 12-20 BPL women members in the age group 18-60 years residing in the same area.
NGOs and PLFs affiliated with Mahalir Thittam undertake the formation of SHGs.
They are trained to become cohesive as a group through regular meetings and encouraged to cultivate savings habit.
Capacity Building Programmes such as SHG and A & R training are imparted to the Group members and within a period of six months.
After a period of 6 months, SHGs are rated for Credit Linkage by a Committee consisting of Bankers, APOs, NGOs, Block level officer and PLF Representative.
For the eligible Credit rated SHGS, credit facilities are largely made available through Banks, both for revolving fund and economic activity.
Other sources of funding for Credit linkage are SGSY, TAHDCO, NABARD & SJSRY
Under various Skill Training Programmes, eligible SHG members are encouraged to start economic activities or undertake self employment.
Efforts are made by Mahalir Thittam for marketing the products produced by SHGs wherever possible locally and for sale in exhibitions.
In order to enable all poor women living below poverty line to join and benefit from the Self Help Group movement, the group formation is undertaken with special focus on NREGS women workers, urban slum dwellers and in Village Panchayats where SHG coverage is still inadequate.
Panchayat Level Federation:
The Panchayat Level Federation provides a common platform for the SHGs to share their experiences and to voice their problems. The PLF can help achieve what individual SHGs cannot, by pooling in their talents and resources and exploiting economies of scale both in production and marketing. They can also guide and monitor the functioning of SHGs in a Village Panchayat and also form and train new SHGs. Strengthening PLFs is the key to achieving sustainability of the SHG movement in the long run.
In addition, the Government initiated the following steps to further strengthen the PLFs :
Providing seed money, instituting Manimegalai Awards to best PLFs and capacity building of office bearers of PLFs. The Government ordered restructuring of PLFs with the objective of making them more inclusive, transparent and participatory and also to improve their governance and sustainability. In order to accord legal status to the PLFs and facilitate them to access Bank Credit the Government have ordered to register all PLFs under Tamil Nadu Societies Registration Act, 1975. A detailed action Plan has been drawn up to restructure all the PLFs in the State in three years in a qualitative manner. On completion of six months from restructuring the PLFs are graded based on indicators covering participation, inclusion, governance, transparency,credit discipline and community development initiatives.
Credit Linkages to SHGs.
Revolving Fund is provided to SHGs to augment their group corpus and create credit discipline by enhancing their financial management skills. Proper utilisation of revolving fund will help in making SHGs creditworthy and access Bank loans.
SHGs become eligible for Revolving Fund (RF) after passing the first credit rating which is undertaken 6 months after the date of formation of the SHGs. It is aimed at augmenting the group corpus and makes them credit worthy to access Bank loan.
After passing the first credit rating, SHGs in rural areas are provided with Revolving Fund subsidy of Rs.15,000/- under schemes like SGSY for the financial year 2011-2012. But RF subsidy was not available to SHGs in urban areas which restricted their access to credit from banks
The SHGs that complete 6 months become eligible for credit rating. Credit rating is a bench marking exercise to grade the group and ascertain its credit worthiness. The credit rating committee consists of an Assistant Project Officer from Mahalir Thittam, a representative from DRDA, a Banker, and a NGO representative. In an effort to strengthen the Panchayat level federation (PLF) of the SHGs, one representative from the PLF has been included in the credit rating committee. Regularity of savings, frequency of meetings, proper maintenance of registers, internal loaning and repayment are some of the key parameters for rating of groups. The successfully credit rated SHGs, become eligible for credit linkage. They are given revolving fund through schemes like SGSY, TAHDCO or directly provided loans by banks.
The groups also undergo a second credit rating after the lapse of another six months to ascertain their readiness and suitability to undertake an economic activity. The groups which pass the second credit rating are provided financial assistance to start an economic activity through SGSY / TAHDCO schemes along with bank funding.
Bank credit is one of the most critical inputs for empowering SHGs and to reduce rural indebtedness. Banks normally extend cash credit upto Rs.50,000 to SHGs along with RF subsidy of Rs.15,000 provided by Government. But the quantum of credit extended by banks to SHGs was not adequate to meet the credit requirements of all the SHG members. Therefore Government have taken special efforts to increase the quantum of credit to SHGs and ensure credit is made available to SHGs in multiple doses. Due to the efforts taken by Government, banks in the State have started providing minimum of Rs.50,000 as first linkage and minimum of Rs.1 lakh and Rs.1.5 lakh as second and third linkages respectively.
Credit Linkage - 2011-2012