SHGs were formed under Mission Shakti in Odisha. Odisha government started a validation and grading exercise to know SHG status in December 2012. The validation process aimed at confirming the existing status of SHGs, whereas the Gradation Process assessed their eligibility for receiving Revolving Funds.
Validation
In an ideal world, the Branch Manager/ Representative of the Bank, B.D.O/Representative from the block, and C.D.P.O/Representative from ICDS should visit the field and complete the process. This may take from 5-10 days depending on the size of the district. This doesn't happen in the real world where AWW sits with the President/Secretary of SHG for the complete assessment.
DRDA and ICDS Balangir have a record of 11097 SHG existing in the district but validation led to only 7846 functioning groups. Hence, we can easily imagine with these figures, the difference between SHGs claimed and existing can run in lakhs. Defunct and far SHGs form a major part of the numbers claimed by the government.
Grading
Grade I and II with A, B, and C as three categories of the SHG was the grading format. The format with various criteria is uploaded on Scribd. SHGs having 70% BPL members and passed the Grade-I test and categorized as “A” or “B” i.e. Scoring more than 60% marks during Grading will only be eligible for Revolving Fund in order of merit as per their scores. The Graded SHGs are assisted under NRLM, as this fund will aim to address the immediate production and consumption needs of members of the SHGs as well as encourage internal lending practices among the members.
In the intensive Block under NRLM, Revolving Fund(RF) of 10,000 or 15,000 depending on whether they had already received any prior assistance under any other government scheme. The SHGs who have qualified grade I test but have not availed of any financial assistance will be provided with a revolving fund of ₹.15,000/- in two tranches. In the first tranche ₹.5000/- will be provided and on successful utilization of this amount ₹.10,000/- will be provided to the group directly in 2nd tranche at least after 3 months of receiving 1st tranche. This fund will become a part of their group corpus. The group members can borrow from the group corpus to meet their various needs as decided in the group. However, the groups who have already availed of such financial assistance under Mission Shakti or any Govt. program will not be eligible for 1st tranche and receive only 10,000. I insisted on attaching Xerox copies of my BPL card and Bank Passbook SHG while working at Bhanjanagar block in Ganjam district. Hence, it created transparency and gave validity to the no. of BPL members by any SHG.
Conclusion
RF/PPIF is distributed in a campaigning mela organized at each block to sensitize the groups about NRLM. Generally, it is more show of the good work done by the government. In an ideal world, SHG assessment (or rating) should not just be limited to current performance but could also assess credit absorption and repayment capacity. That requires qualitative information to look for problems faced by each group. It is assumed by the government that the SHGs that are found ineligible would be provided hand-holding support, to improve their credibility for future assistance. However, there was no staff at the field level to do this tedious job. Record keeping at the group level has emerged as a very weak aspect of SHG functioning.
The main problem is that we don't have data on the Life cycle of a SHG. We are unable to understand how many groups are defunct or discontinued so we don’t know the mortality rate of the group. So, the government has no answer to these two questions: What groups work, and what works with groups?
