Validation and Grading of SHGs

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?

Disaster Management

Disaster Management in Phailin was remarkable in its aspect of losing minimum lives when faced with challenge of massive proportion. India evacuated more than half a million people as massive Cyclone Phailin hit eastern ghats at Odisha and Andhra Pradesh. An early warning and timely actions saved countless lives. Earlier entire nation prays for the well-being of the people of disaster struck zone. Yet never care to plan. Things started changing with 1999 Odisha cyclone. And even world bank blog has put an article on the preparation by Odisha government.

In the case of flood/tsunami/cyclone, torrential rains always play havoc and diseases are rampant due to decaying carcass. The relief center must be equipped with grains, deworming pills, Trampoline sheet, dhoti/lungi with saree, mosquito net, blanket, towel & utensil kitchen as an immediate requirements for the household affected with cyclone. My prior experience on preparation for disaster management was itself a big lesson.

I was posted in Ganjam district with Panchyati Raj Department after one month of cyclone Phailin. I observed that mangroves have lowered the full impact of cyclone in the coastal region. Even 50 km from the coast, the brick mortar schools were partially destroyed by the storms.  On enquiring about the relief work at block level,  I was given brief on the help provided by administration post disaster. There were 33,283 households in Bhanjanagar. They were provided with kerosene oil, jaggery and flattened rice (chuda) of two months supply. 50 kg of grains and Rs 500 were given to each household. Plastic cover roof was in demand more than anything. Ganjam was worst hit by the Phailin and the accounts were horrifying.

There is lack of access to basic resources to sustain livelihood for the community. There must be careful planning with Donor funds coming for rehabilitation. Poor countries have become fighting arena of NGOs on international aid after each disaster. And all the international aid and investment is mostly consumed by INGOs, private companies involved in the relief effort. Even missionary organization pops up for saving the soul of unbelievers post disaster with charity. When disaster strikes, who profits? This is the key question for policy level to eliminate corruption and inefficiencies. No other country in the world has more non-governmental organizations (NGOs) per capita as Haiti. Yet we all know about real face of international relief after 2010 earthquakes. (Source 1 and Source 2).

Link Worker Scheme

The Government of India estimates that about 2.40 million Indians are living with HIV (1.93 ‐3.04 million) with an adult prevalence of 0.31% (2009). For the readers, there is a popular myth that HIV, or AIDS is an urban disease. As per the HIV Sentinel Surveillance (HSS) of 2007, it was identified that 57% of the HIV-positive persons in India are estimated to be living in rural areas.

Under the NACP III, Link Worker Scheme was designed for rural prevention and NACO implemented this program with the financial support of Global Fund through Lead NGOs. Link Worker Scheme was launched to saturate the reach of HIV-related services to high-risk groups based in rural areas. The scheme aims to build a rural community model to address the complex needs of rural HIV prevention, care, and support requirements. Under this scheme, a person who has been trained and has been made responsible for carrying out specific activities is called a Cluster Link Worker. I visited the field office of Humana People to People India (HPPI) in Lucknow on a learning tour about the Link Worker Scheme. A Red Ribbon Club (RRC) in the villages has been formed to prevent AIDS. This was done due to the dormant village health committee and uneasiness among village elders to take up issues related to sexual health. I observed that women from higher caste and men are reluctant to talk openly. Cluster Link Worker told me about the few cases referred to STI services under this intervention. Information materials & commodities (condoms, needles/syringes) through collaborating with the nearest government health facilities have been distributed among the youth in the community.

Numerous NGOs and CBOs are working on HIV/AIDS issues in India at the local, state, and national levels. The events organized by NGOs are limited to shouting slogans and carrying placards depicting various messages related to HIV/AIDS. They also help in social marketing (SM) of condoms. The campaign uses targeted ads and community engagement opportunities to change the way men and women think about HIV/AIDS. The major reasons for AIDS can be attributed to Unsafe Sex and Low Condom Use. But it arises from the Low levels of literacy leading to myth and misconception. STIs very often go untreated due to both a lack of information and healthcare facilities. Stigma towards people living with HIV is widespread among urban and rural communities. Sex workers are hiding in plain sight.

The high-risk group (HRG) among the population includes Female Sex Workers (FSW), Men Who Have Sex with Men (MSM) & Injecting Drug Use (IDU). The Bridge Population is truck drivers, male and female migrants while the vulnerable Population constitutes migrant spouses, HRG spouses, and trucker's spouses. Youth migrating for work and trafficked women form a critical group because of their ‘mobility with HIV’. Migration for work leads them to new living and working conditions without family support. Sexually active age and separation from regular partners for extended periods predispose them to paid sex or sex with non-regular partners. Movement is not a necessary element in the trafficking process, with the mechanisms of deployment, payment of advances, and wages bearing a striking similarity across the country. The various reasons for trafficking are a result of a complex set of Gender discrimination, illiteracy, No sex education, violence against women, vulnerability and ignorance of girls, and finally lack of opportunity.

People have not suddenly understood the old arguments spread by social workers. There is a lot of awareness now of HIV than a decade ago and the attitudes about AIDS changing gradually. The HIV-positive population needs the provision of safe spaces and support systems to overcome shameful anxieties, fragile hopes, and guilt. I saluted the guts of the social worker who works in the community on such a taboo issue. Much moral courage is required to meet an outcast and convince a socially rigid community.   With consistent awareness, the masses get used to the message, and AIDS loses its disgust value. And the new generation is just much more open.

SHG Model and Financial Inclusion

SHG Model in India : “The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.” ~ Malcolm Gladwell.

This statement might have been just said on SHG (Self Help Group) movement in India. The rural landscape of India has mushrooming with SHGs. Formal credit system has, over the years failed to deliver in rural India. The transaction costs of the rural credit systems are very high and the system is plagued by non-performing assets. SHG were started as a pilot project of 500 SHGs, by Nabard in 1992, they grew slowly. SHG  are viewed today as an entry point in rural landscape for NGO, Bankers, government and even MNCs.

Self Help Groups (SHGs) are informal associations of up to 20 women (their average size is 14) who meet regularly, usually once a month, to save small amounts (typically Rs 10 to 50) a month. Majority of SHGs are single-caste groups based on basis of neighbourhood and affinity groups concept. Prof. Malcolm Harper notes three aspects with regard to using SHG groups  [Source]:

1) Groups take time, lots of it, and we have always said that poor women are very busy.
2) Groups tend to exclude individualist (sometimes they are called as entrepreneurs) who dare to be different, to do mad things like starting new types of businesses, which may even create jobs for others.
3) Men are generally bad at working in groups, and they take bigger risk and are less reliable than women, but when they do succeed they tend to create more jobs than women do, for the vast majority who prefer to employed than to be self-employed.'

Financial Inclusion (FI) in India [Source] -  Typically speaking, the scope of financial inclusion (FI) in India involves the following and related services (not exhaustive):

Access to accounts: a) Savings (No frills etc); and b) Current accounts.

Access to deposits: a) Fixed deposits; and b) Recurring deposits

Access to transaction banking: a) Use of cheques, demand drafts and other such instruments; b) Receiving of social security (NREGA and other) payments through bank accounts; c) Transfer of money through RTGS or NEFT and remittance services; d) Debit cards and ATM usage; e) Credit cards including KCC and GCC; f) Bill payments through technology banking - mobile banking, internet banking etc

Access to credit facilities: a) Typical priority sector loans for agriculture and allied areas etc; b) Post harvest, post production loans; c) Loans for marketing of agricultural and other produce etc; d) Traditional working capital limits; e) Traditional MFI loans under priority sector; f) Traditional SHG bank linkage program loans; g) Loans from specialised credit and other cooperatives; h) Traditional MSME loans backed by credit guarantee from Government of India; i) Housing/mortgage loans; and j) Various kinds of overdraft facilities and so on;

Access to risk management services: a) Life insurance; b) Health insurance; c) Asset insurance; d) Crop and weather insurance; e) Livestock insurance; f) Other such products such as credit insurance; and g) Micro-pensions

Access to other Services: a) Deposit insurance; b) business facilitators (BF) and business correspondents (BC); c) financial literacy services and credit counseling (FLCC) centers; d) grievance redressal, ombudsman and legal aid services; e) credit bureau; and f) Other services

The above services can be acquired through various institutions such as (but not limited to) the following: Commercial Banks, Regional Rural Banks (RRBs), Cooperative Banks, Local Area Banks (LABs), Post Offices, State Cooperatives, Mutually Aided Cooperatives, Multi-State Cooperatives, Investment Grade NBFCs, NBFC MFIs, BCs/BFs, Other MFIs, SHGs and so on.

SHG Model and Financial Inclusion in India

Government has been pushing banks to step up their financial inclusion (FI). Most of the financial inclusion has been limited to opening of No-Frill Accounts. Due to lack of financial literacy, program is not achieving the vision. Banks are fulfilling targets through intermediaries such as business correspondents (BCs). The limited amount of the BC works revolves around disbursement of government funds, small-value credit; recovery of principal / collection of interest; collection of small-value deposits and sale of micro insurance. Facilitating access to microfinance through SHG-supported bank linkages is one of the most critical aspects of our Financial Inclusion program. More on SHG Bank Linkages will be coming on the blog pretty soon.

e-NRLM

It is very essential for monitoring and evaluation to have solid data. There are thousands of functioning SHGs in the country. NRLM has taken step for transparency through data collection about SHG. MIS of NRLM is hugely important for tracking effectiveness of programs that would serve in a long way to establishing accountability at each level.

ICDS is already working with SHG movement in Odisha with Mission Shakti since 2003. Through validation and gradation of SHG in December 2012, Panchayati Raj Department was able to verify total number of SHG in the Odisha. Still, there was no concrete record of name of all SHG members. Name of President and Secretary can only be obtained through all given data. I formed a template as required for MIS and termed this E-NRLM format. Our OLM team at Bhanjanagar and Surada block of Ganjam district used Aagan Wadi Workers (AWWs) for collecting data about SHG.

Data collection exercise is a tough thing in India. Education of the most of the AWWs varies mostly from class 7-12 range. They are overloaded with core responsibilities and other auxiliary works. Other hurdles in data capture is Demand of Information in English Language. This is a huge problem at all India level as the necessary level of English is not achieved by  AWWs, GRS or any other extension staff. If we collect data in the regional language, it will be very tough for translating them in English for data operator sitting at block level. One more precaution should be taken while collecting data at rural level. Agriculture season shouldn't be selected for the exercise as women members are busy in all activities. That will add burden to AWWs and make process more tedious.

Gathered information is static in nature. We need to re-validate all old SHGs each year for any change in members, amount of savings and bank linkage history. There is need to colled basic information also need about new SHGs formed each year. There will be upcoming need to update BPL(Below Poverty Line) data related to SHGs in near future. Currently, 1997 BPL census data is used in Odisha for any scheme. 2011 BPL data will be soon made public and must be incorporated soon.  Why this is important ? Each government schemes has guidelines to select beneficiary mostly on the basis of either SC/ST or BPL card per household. Hence, a more transparent way will emerge with the help of this MIS.With each opening of bank branches (public and private) in the locality, they should be readily integrated in MIS data.

In a review meeting, we were battered by a senior officer for not taking ownership of the mission in data collection exercise. This task was not possible without having a single field staff dedicated for NRLM at our disposal till December 2013. And, nobody remembers all big talks of convergence of various government agencies! I was working at Balangir district where few villages/GPs name were missing from MIS. We readily took help from MGNREGS MIS software. Now, that is a fine example of convergence. We are collecting BPL card number instead of just writing yes or no in BPL column for e-nrlm. That is ensuring much transparency in the system. It is plan to do this data collection exercise each year conjoint with re-assessment schedule of all SHG. That will ensure much light on proper SHG health.

Social investment is not being done just be formation of SHG and quality is not being maintained as government is only chasing numbers. Our huge ignorance of how good or bad SHG works is barrier to their development. MIS is a tool that will be give quantitative answers. There is still need of huge qualitative data to explain the numbers. NRLM need rigorous and reliable information of impact assessment studies, social audit, panel studies etc. Open data-Base is a new kind of 'public good' that can be generated through this mission. With this huge amount of publicly available data disseminated to policymakers, industry, bankers, researchers, Academia, students and others can give more understanding social reality.