Download - My presentation at the mF summit in Dec 11
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““RevisitingRevisiting SHGsSHGs””
Dr.B.S.SuranmCID, NABARD-HO
Mumbai
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The presentation format
Introduction Flashback & status Financial lives of poor- a case Some features of the new version-SHG Conclusion
20 year – flash back
Research &Development
1992Pilot project
RBI-Or
1996Working group
1998Govt Recogni
Bank as SHPI
1997Training
ConsultationNGO Grants
Add-on
mFDF
Product awareness building. Resource supplementation for
partner agencies Product catches on in select
areas… slow inroads in otherareas
Range of products – grain banks,Other SHPIs
Product awareness building. Resource supplementation for
partner agencies Product catches on in select
areas… slow inroads in otherareas
Range of products – grain banks,Other SHPIs
Large client base to beserved….
Limited or no competitors Huge gap in capacity & know-
how Limited resources of partners
Large client base to beserved….
Limited or no competitors Huge gap in capacity & know-
how Limited resources of partners
•Entice more players to enter-• Govt depart, corporations joins• larger loans on a continual basis•New players join, pilots -social security• Attempts at Technology integration-smart card, computer munshi,e-grama• initiatives by bankers …
•Entice more players to enter-• Govt depart, corporations joins• larger loans on a continual basis•New players join, pilots -social security• Attempts at Technology integration-smart card, computer munshi,e-grama• initiatives by bankers …
• Resource poor areas- refocus• Technology II• BC models•Need for restratagising !•Need for Product changes !
• Resource poor areas- refocus• Technology II• BC models•Need for restratagising !•Need for Product changes !Product changes !
mFDEF
TechProjectsPilots
NewsletterPartnership
IGNOU
OtherSHPIs
1993RFA support
Rating support
Capitalsupport
Vision
Bank’s- Sp branch
NB/Bank’s- SHG as BC
NB- specializedLoans
(sanitation)
NB- JLGs
Bank’s- Tiny cards
Sp strategy forPri states
Self ratingtools
Activity groups
Large SHPIprojects
DialoguesState Govts
Contripensionscheme
Some concerns - SHGs Strengths of SHGs
• Expectation mismatchs• Longer wait for loans• Cases of Poor Quality of groups•Smaller quantum of loan•Lesser control & Monitoring•GL constrains entre activity•Multiple borrowing / member• Bank Linkage – delays• Conflict between SHPIs• Costs ? / Overdues ?
• Expectation mismatchs• Longer wait for loans• Cases of Poor Quality of groups•Smaller quantum of loan•Lesser control & Monitoring•GL constrains entre activity•Multiple borrowing / member• Bank Linkage – delays• Conflict between SHPIs• Costs ? / Overdues ?
•Permits savings culture /habit• User owned system•Enables sustainable inclusion•Tool for delivery of financial services• Better peer learning•Delivery of Govt /NGO prog•Better and mutual understanding•Stronger group cohesion•lower interest rates•Flexibility
• Builds social capital / social empowe
•Permits savings culture /habit• User owned system•Enables sustainable inclusion•Tool for delivery of financial services• Better peer learning•Delivery of Govt /NGO prog•Better and mutual understanding•Stronger group cohesion•lower interest rates•Flexibility
• Builds social capital / social empowe
Rejig the product – multiple borrowingDiversify saving opportunitiesFacilitate personal savings withdrawalStar ratings of SHGs- larger loansIntensify monitoring -ICTE- bookkeeping / ICT solutionsIntroduce self rating toolsImprove trg systems/deliveryRNGOs in districts/ support FNGO
Rejig the product – multiple borrowingDiversify saving opportunitiesFacilitate personal savings withdrawalStar ratings of SHGs- larger loansIntensify monitoring -ICTE- bookkeeping / ICT solutionsIntroduce self rating toolsImprove trg systems/deliveryRNGOs in districts/ support FNGO
•Repitch: sustainable FI tool•Selectively converge prog•Build Community Capacity• Support Fed. Structures / CSC• Redefine Fed performance stands• Usher Govt efforts in LI states•Enable journey to livelihoods•Good SHGs as BF/BCs- support–product•Good SHGs / JLGs as POs - product
•Repitch: sustainable FI tool•Selectively converge prog•Build Community Capacity• Support Fed. Structures / CSC• Redefine Fed performance stands• Usher Govt efforts in LI states•Enable journey to livelihoods•Good SHGs as BF/BCs- support–product•Good SHGs / JLGs as POs - product
Where have we reached ?
Jammu &Kashmir
Himachal Pradesh
UttarPradesh
Punjab
Haryana
Rajasthan
GoaKarnataka
AndhraPradesh
Orissa
MadhyaPradesh
Delhi
Gujarat
Maharashtra
KeralaTamilNadu
Bihar
WestBengal
Jharkhand
Sikkim
Assam
ArunachalPradesh
Nagaland
Manipur
MizoramTripura
Meghalaya
Chhattisgarh
Green Extent ofcoverage - good
17states
Red < 50 % coverage 6 states
Yellow > 50 - 70 % 2 statesBrown >70 - 90 % 4 states
SHG savings coverageMapping- March 2011
Credit deepening !!
Jammu &Kashmir
Himachal Pradesh
UttarPradesh
Punjab
Haryana
Rajasthan
GoaKarnataka
AndhraPradesh
Orissa
MadhyaPradesh
Delhi
Gujarat
Maharashtra
KeralaTamilNadu
Bihar
WestBengal
Jharkhand
Sikkim
Assam
ArunachalPradesh
Nagaland
Manipur
MizoramTripura
Meghalaya
Chhattisgarh
> 100K/SHG
>50K- 100K/SHG< 5,0000/SHG
Trend: SHGs Savings linked & Av saving balances
Trend: SHGs credit linked
Trend : Bank Credit to SHGs
Trend: Bank loan to SHGs & Averageloan sizes
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Financial lives of poor
1 July – 19August 2008
Name : Mrs ShanthammaVillage : PuthentharaAsset : Land 5 Cents
Part Kutcha HouseFamily : 5 membersOccupation : Fish peelingBank account : YesMember of SHG : Yes
How financially active are they ?
1 July – 19 August 2008
Wages 1
SHGcompulsorySaving
Tradecredit
Landlady
Borrowingfrom friends Chitty
Pension
Post office
SHG loan
Wages 2
Salary
Money lender
Kai vaiyappa
Financial lives of poor
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Frequency and sources of inflow
Inflow/ categoryFrequency
Total % age shareAverage
Per HouseholdAmountMax Min
Loan from SHG 2 4320 2.73 2160 3120 0 (1200)Loan from Bank 6 29500 18.61 4917 8000 0 (1000)Chitty / Chit
funds 0 0 0 0Friends / relatives 4 9050 5.9 2260 5000 0 (50)Money lender /
Land lord49
35280 22.26 720 10000 30Pay/wage 588 77805 49.08 132 600 40Agri income 3 330 0.21 110 205 0 (60)Saving /other
receipts11
828 0.52 76 525 0 (25)Others-pension 12 1100 0.69 92 450 0(50)
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Expenditure baskets of the poor
Daily needs, 70179
Health, 6870
Savings/Assets, 30635
Debt Servicing, 14692
Social Expenses, 31460
Daily needs
Social expensesSaving/asset
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Implications
Predominance of debt in the financial lives of poor ,though savings/thrift with informal entities is common
Fungibility of credit use is prevalent Need for new Savings options felt Money lender continues to be the most frequented source
for many poor HH Quantum of credit taken from informal source is generally
low Share of food in the expenditure basket of the poor
household is very high. Attending or hosting socialfunctions is a biggest spender in the family budget
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The design difference !
Changes
Permit volsavings
One corpus ?
MinimumCredit sanctions
Permit MultipleBorrowing –Cash Credit
Profitsharing
Grading &Self rating
Audit +e-Bookkeeping
Livelihoods
Enabling journey to livelihoodsEnabling journey to livelihoodsSHG
(14 members) Bank Grades& cr links
1-3 years
SHG members SHG members SHG membersFin Literacy
NSM
Eco oppConsumption smooth& existing livelihoods
Risk appetite Eco active, Entre REDP
Skill
MEPA
MEDP
Environ
8 2 4
SHG modeJLG
EstablishedCredit History
Bank Loan entre
NREGS
NRLM
POJLGs JLGsInsurance
SHG-Bank Linkage in underserved areas
- old approaches continue- SHPI, Training, stakeholder meets, exposurevisits etc, ….. approaches to be specific to regions / district
• Using NGOs as Business facilitators
• Posting micro Finance anchors in select districts
• Leveraging SHG-BF, CRP as SHG facilitators
• Using Resource NGO – field NGO models for expansion
• Using Training resource NGOs
• Strengthening community-based organisation / Coop- SHPI
•Integrating technology for audits / bookkeeping
•Improving financial literacy / capability of microfinance clients
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Partnerselection& support / Trgsys
Enablelivelihoodjourney
ConvergenceOpportunities
Product design& positioning
1 2
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SHG version 2SHG version 2Maximise utility to the client
SHGs, promoting an informed & inclusive nation
Conclusion