Women Empowerment Through Self Help Groups:

A Case Study in the North Tamil Nadu

Introduction

 Poverty and unemployment are the major problems of any under developed countries, to which India is no exception.  In India, at the end of ninth five year pan 26.1% of the population was living below poverty line.  In the rural area 27.1% of the population was living under poverty.  The overall unemployment rate is estimated to 7.32%.  The female unemployment rate is 8.5%.  The rate of growth of women unemployment in the rural area is 9.8%.  This is because of the low growth rate of new and productive employment.  In the end of IX plan the rate of growth of implemented various schemes to reduce poverty and to promote the gainful employment.  But the more attractive scheme with less effort (finance) is “Self Help Group”.  It is a too to remove poverty and improve the rural development (Sabyasachi Das. 2003).

 Origin and Concept of SHGs

 The origin of SHGs is from the brainchild of Grameen Bank of Bangladesh, which was founded by Mohammed Yunus.  SHGs were started and formed in 1975.  In India NABARD is initiated in 1986-87.  But the real effort was taken after 1991-92 from the linkage of SHGs with the banks.  A SHG is a small economically homogeneous affinity group of the rural poor voluntarily coming together to save small amount regularly, which are deposited in a common fund to meet members emergency needs and to provide collateral free loans decided by the group.  (Abhaskumar Jha 2000).  They have been recognized as useful tool to help the poor and as an alternative mechanism to meet the urgent credit needs of poor through thrift (V. M. Rao 2002) SHG is a media for the development of saving habit among the women (S. Rajamohan 2003).  SHGs enhance the equality of status of women as participants, decision-makers and beneficiaries in the democratic, economic, social and cultural spheres of life.  (Ritu Jain 2003).  The basic principles of the SHGs are group approach, mutual trust, organization of small and manageable groups, group cohesiveness, sprit of thrift, demand based lending, collateral free, women friendly loan, peer group pressure in repayment, skill training capacity building and empowerment (N.Lalitha).

In Tamil Nadu the SHGs were started in 1989 at Dharmapuri District.  At present 1.40 lakh groups are function with 23.83 lakh members.  At  present, many men also eager to form a SHGs.

 

Working of SHGs

SHGs are working in democratic manner.  The upper limit of members in a group is restricted to 20.  Among them a member is selected as an ‘animator’ and two members are selected as the representatives.  The animator is selected for the period of two years.  The group members meet every week.  They discuss about the group savings, rotation of sangha funds, bank loan, repayment of loan, social and community action programmes.

 

Functions of  SHGs

• Create a common fund by the members through their regular savings.

• Flexible working system and pool the resources in a democratic way.

•  Periodical meeting.  The decision making through group meeting.

• The loan amount is small and reasonable.  So that easy to repay in time.

• The rate of interest is affordable, varying group to group and loan to loan. However it is little higher than the banks but lower than the money lenders.

From the previous studies related to SHGs, it is clearly understood that the SHGs are tool to promote rural savings and gainful employment.  Through this the rural poverty is reduced considerably.  Therefore women members are economically independent and their contribution to household income is also increased.  The present study is also focusing the economic improvement of women after they joining SHGs.

 

Objectives

The overall objective of the present study is to analysis the economic empowerment of women through SHGs in the north districts of Tamil Nadu.  However more specifically:

1.     To study the income, expenditure and savings of the members after joining SHGs.

2.     To know the role of SHGs in providing rural credit.

Methodology

The present study has covered the three villages from north districts of Tamil Nadu Viz., Ponneri Village of Vellore District, Koodamalai Village of Thiruvannamalai District, and Paparpatti Village of Dharmapuri District.  These three villages were selected for this study, because of the SHGs in these villages are functioning very successful manner. The ponneri village of Vellore district is pioneer in starting make SHGs.  Therefore these villages were selected for the present study.

 

This study is compiled with the help of the primary data covered only one year period (2004-05).   The primary data were collected with the help of specially prepared interview schedule.  The schedule included the questions related to the general information about the SHGs members, income, expenditure, savings and loan schemes available to SHGs’ members.  Totally 134 respondents were selected from 20 SHGs  (398 total members) of three districts y simple random sapling method.  The sample size was 1/3 of the total members in the SHGs.  This is purely a descriptive study.  Therefore no complicated models and tools were used, only percentage and average were used for the analysis.

 

Analysis and Interpretation

The present study is related to the economic empowerment of  women in the north Tamil Nadu.  For this study three villages were selected from three districts.

 

This section deals the economic improvement of women through SHGs.  In the study area totally twenty SHGs are functioning with 398 members (Table-1).  From the 398 members 134 respondents were selected for the study.

                           Table 1 – Membership in SHGs

 

Sl.No.	Name of the Village	No. of  SHGs	Total    Members
1.	Ponneri (Vellore District)	6	130
2.	Koodamalai (T.V. Malai District)	8	138
3.	Papparapatti (Dharmapuri District)	6	130
	Total	20	398

Source : Primary Data

Age Group of Members of SHGs

 

Age and socio-economic activities are inter-related.  The young and middle age group people can actively participate in the socio-economic activities, which is true in the activities of SHGs in the study area.  In the three south district of Tamil Nadu, 20-30 and 30-40 age groups are actively participated in the SHGs activities (Table –2).  The aged people (40-50) are also in the SHGs, their role is also important for SHGs.  They can only control and solve the problems arise in the groups.

Table-2 Age Group of Members of SHGs

 

Sl.No.	Age Group	No. of respondents			Percentage
1.	Less than 20	6			4.46
2.	20-30	30			22.39
3.	30-40	32			23.88
4.	40-50	36			26.87
5.	50-60	18			13.43
6.	Above 60	12			8.96
	Total	134		100.00

Source : Primary Data

Reasons for Joining SHGs

The major aim of the SHGs is to promote savings and to credit for the productive and consumption purposes.  This is true because many people in the study area joins the SHGs for getting loan and promote their personal savings, in addition to get social status Table – 3.  In the study area many people (43.28%) joins the SHGs for getting financial assistance, 32.84% of the respondents joins the SHGs for the social status, because SHGs give the identify to the members.  14.92% of the respondents join for improving their savings.   For social, cultural and political improvement (other reasons 8.96%) some members join in the SHGs.

Table – 3  Reasons for Joining SHGs

Sl. No.	Reasons	No. of respondents	Percentage
1.	For getting loan	58	43.28
2.	For promoting savings	20	14.92
3.	For social status	44	32.84
4.	For other reasons	12	8.96
	Total	134	100.00

Source : Primary Data

Income Level of the Members

Income is the major determinant of the standard of living of the people.  The SHGs member income has been increased after joining the SHGs.  Hence women members of the groups are independent to meet their personal expenditure, and they contribute more to their household income.  Many housewives (22.39% ) did not earn anything before joining SHGs, but after a member of the SHGs, they are also earning reasonably.  This increases the willingness to participate in the SHGs’ activities (Table – 4). Many women members independently involve in the economic activities individually and with other group members after joining SHGs.  Therefore they are now economically independent and contribute to increase their household income.

 

Table 4 Monthly Income of the Members Before and After Joining SHGs

Before Joining SHGs         After Joining SHGs
Sl. No.	Monthly Income  Rs.	No. of Respondents	Percentage	No. of Respondents	Percentage
1.	Less than 1000	16	11.95	5	3.73
2.	1000-2000	25	18.66	26	19.40
3.	2000-3000	42	31.34	45	33.58
4.	3000-4000	4	2.96	14	10.45
5.	4000-5000	10	7.46	33	24.63
6.	5000-6000	5	3.75	6	4.48
7.	Above 6000	2	1.49	3	2.23
8.	Non-earning members	30	22.39	2	1.49
	Total	134	100.00	134	100.00

Source : Primary Data

 

Expenditure of the SHG members Family

The family expenditure has been increased due to positive change in the SHGs members’ income. The incremental income  not only enhance the expenditure of the family but also promote the savings of the family after they join in the SHGs.  Here the objective of the SHGs is fulfilled.  This is a achievement of the women SHGs in the study area (Table – 5 and 6).  Usually working  women are being respected by the household members and the society.  Nowadays the women in the SHGs are also respected by the others, because they are independent in earning the income and they are contributing to household income, expenditure and savings.  Therefore the above discussion clearly states that after joining in the SHGs, the members’ well-being has been increased.

 

Table – 5 Monthly Family Expenditure of the Members Before and After Joining SHGs 

Before Joining SHGs         After Joining SHGs
Sl. No.	Monthly Income  Rs.	No. of Respondents	Percentage	No. of Respondents	Percentage
1.	Less than 1000	45	33.58	21	15.67
2.	1000-2000	56	41.79	35	26.12
3.	2000-3000	25	18.66	44	32.84
4.	3000-4000	5	3.73	25	18.65
5.	Above 4000	3	2.24	9	6.72
		134	100.00	134	100.00

Source : Primary Data

Table – 6 Monthly Family Expenditure of the Members Before and After Joining SHGs

Before Joining SHGs         After Joining SHGs
Sl. No.	Monthly Income  Rs.	No. of Respondents	Percentage	No. of Respondents	Percentage
1.	Below 100	34	25.37	15	11.19
2.	100-200	29	21.64	23	17.16
3.	200-300	31	23.13	30	22.39
4.	300-400	15	11.19	19	14.18
5.	400-500	16	11.94	23	17.16
6.	500-600	3	2.25	18	13.44
7.	600-700	4	2.99	4	2.99
8.	Above 700	2	1.49	2	1.49
	Total	134	100.00	134	100.00

Source : Primary Data

 

Rural Credit and SHGs

One of the reasons for joining SHGs is to avails credit (V.M. Rao 2002), which is true in the present study area.  The second objective of the present is to know the rural credit by SHGs.  This part is discussed the rural credit and SHGs in study area.  The credit organizations like nationalized banks, Co-operative Societies and so on, follow many formalities to provide credit to the rural people.  At the sometime village money lenders change very high rate of interest.  In this situation SHGs are the boon to the rural people, because instead of approaching banks individual, SHGs can easily approach the banks and other institutions to get loan.  The SHGs get loan from credit institutions then, they refinance (share) to the members in the SHGs.  The SHGs charge reasonable interest.  In the study are the prevailing interest rate is 1% to 4%.  All the members are responsible to repay the loan to the banks.  Therefore members are repaid the loan in time. (Table – 9 ).   Moreover banks instruct the members to save minimum   Rs. 200 per month.  So re-payment is very easy to SHGs.  The loans  can be used by individual group members for their personal needs, sometime the group may invest on any economic activities.  Nowadays many SHGs are starting small business, cottage industries, food processing units etc.   The SHGs in the study area grant the loan to their member for various purposes.  The maximum loan amount per members is decided by the general body meeting (Table – 7).  Almost all the members in the study area are availing the loan facilities in their SHGs (Table – 8).

                Table – 7  Types of Loans in the SHGs

Sl.No.	Types of the Loan	Maximum amount Rs.
1.	Business Loan	20,000 to 25,000
2.	Marriage Loan	Upto  20,000
3.	Repay the old Loan	10,000 to 15,000
4.	Medical Loan	10,000 to 15,000
5.	House repairing Loan	Upto 5,000
6.	Cattle Loan	5,000 to 7,500

Source : Primary Data

Note: The rate of interest is 1% to 4%. It varies group o group

 

Table – 8 Amount of Loan Availed by the members Through SHGs

 

Sl.No.	Availed Loan Amount Rs.	No. of Respondents	Percentage
1.	Less than 5,000	23	17.16
2.	5,000 to 10,000	28	20.90
3.	10,000 to 15,000	29	21.64
4.	15,000 to 20,000	35	26.12
5.	Above 20,000	19	14.18
	Total	134	100.00

Source : Primary Data

Table – 9 Repayment of Loan by SHGs’ Members 

Sl.No.	Particulars	No. of Respondents	Percentage
1.	Repayment in time	86	64.18
2.	Repayment in advance	25	18.66
3.	Repayment not in time	23	17.16
	Total	134	100.00

Source : Primary Data

Conclusion

The study was undertaken the women empowerment through SHGs in the north Tamil Nadu.  It is found that the income of the women has been increased after joining the SHGs.  So that the monthly household expenditure also has been raised considerable level.  But the savings is increasing at slow rate, because the incremental expenditure is higher.  Mostly they are spending for present consumption.  The members should change it.  The good practice of the women SHGs in the study area is repayment of the loan in time.  Nearly 64% of the debtor paid their monthly due with in the time, even some members 19% paid their due in advance. A few members do not pay in time but this is not affecting the further credit of SHGs.  Since the repayment of loan is regular and within the time,  we may conclude that the economic activities of SHGs are quite success.  In this way SHGs in north Tamil Nadu are very successful to develop women empowerment and rural areas.

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