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Ch. Prashanth Reddy

Hyderabad , Sept. 19

THE role of moneylenders in the rural economy of Andhra Pradesh seems to have significantly declined following the proliferation of women self-help groups (SHGs) in the State.

An indication to this effect comes from a study conducted by the Mahila Abhivruddhi Society of Andhra Pradesh on SHG-bank linkage programme.

The study states that 70 per cent of the SHGs surveyed have reported that their members are free from moneylenders.

Similarly, 71 per cent of the groups reported moderate improvement in income levels and 80 per cent of the groups reported moderate change in employment generation.

These figures are significant considering that the State has an estimated 4.5 lakh SHGs with an average membership of 14 people per group.

The APMAS study, however, points out that the credit availability has improved more to the SHG groups whose members are financially better when compared to the groups belonging to the poorest of the poor. The systems and procedures of banks, which lay emphasis on the repayment capacity, were "skewed towards the groups that are financially sound".

Thus, according to APMAS Chief Executive Officer, Mr C. S. Reddy, the SHG movement in the State was " more successful as a women empowerment strategy and not so as a strategy for poverty reduction".

The study was conducted in the districts of Prakasam, Vizianagaram, Chittoor, Kurnool, Mahabubnagar, Nizamabad and Warangal.

As per the extrapolations made from the study, the cumulative savings of SHGs in the State is to the tune of Rs 1,100 crore. The existing SGH's cash in the banks is Rs 186 crore, while their fixed deposits account for an additional Rs 74 crore.

Till March 2003, banks have lent Rs 454 crore to the SHGs in the State. Ironically, the idle funds left with the SHGs is estimated at Rs 271 crore. On the average, each SHG has an idle fund of Rs 5,307.

Mr Reddy told Business Line that there were idle funds as need-based lending was absent in some of the SGHs. "They do not lend regularly as a monthly-basis". This apart, some banks block withdrawals from the savings accounts by certain SHGs as a security measure till their loans were repaid. This was despite the fact that 47 per cent of the SHGs feel that the amount lent by banks was inadequate.

With regard to the pattern of loan utilisation by SHG members, the study says that 17 per cent of the loans taken were being spent on purchase of food material, 46 per cent loans are utilised for purchase of milch animals, 2 per cent have been used for repayment of their high interest loans taken earlier, 29 per cent utilised for taking up seasonal business and 11 per cent of the loans have been utilised for setting up petty business.

The loans taken for health purposes and children's education are less than 1 per cent.

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