The Hindu Business Line : SHG scheme benefits 11 lakh families in Kerala

MICRO Financing Institution, a novel concept launched by the Sree Narayana Dharma Paripalana (SNDP) Yogam, an organisation of around one crore economically backward Ezhava people in Kerala, has improved the living conditions of its 11 lakh families in two years.

Significantly, it is through women empowerment.

"When we launched this project conceived by the SNDP General Secretary, Mr Vellapally Natesan, in August 2003, with the main objective of removing the economic and social backwardness of the community, we never perceived a progress of this magnitude in such a short period," Mr K.K. Mahesan, State Coordinator, Micro Financing Institution (MFI), told Business Line on Monday.

The project is implemented in three phases - micro financing, micro enterprises and macro business, he said.

In the first phase, 52,000 self-help groups were be formed with 20 women in each group, contributing an average of Rs 10 a week. Weekly meetings are held in the members' homes, and the convenor and joint convenor of the group collect the money and deposits in the group's joint account with the bank.

Primarily, the members are given soft loans to liberate them from the clutches of the `blade mafia' (money lenders), said Mr Mahesan.

As on October 31, 52,000 SHGs have been registered, involving 11 lakh families. The weekly contribution has gone up to Rs 1 crore. The total capital of the institution has reached Rs 46 crore.

The women members are given technical training with assistance from the Union Human Resources Development Ministry, the State industrial department and banks, Mr Mahesan said. They gain skills in book-binding, umbrella manufacturing, leather works, manufacturing rice flour, pickles, detergent powder, incense sticks, and coir spinning, and goat and poultry farming.

To ensure transparency in the transactions, the SHGs are evaluated by a monitoring group headed by trained group inspectors of SNDP and officials of MFI. Then they are given grades , which will enable them to enter the second phase i.e. micro-enterprises. These graded SHGs are allowed to avail themselves of financial aid from banks and other institutions.

So far, 34,600 SHGs have availed themselves of loans, amounting to Rs 108 crore, of which Rs 40 crore came from Dhanalakshmi Bank.

Other banks that offered to finance include Federal Bank, Syndicate Bank, Lord Krishna Bank and regional banks such as South Malabar Gramin Bank. The total turnover as on October 31 stood at Rs 154 crore, said Mr Mahesan. Loans are repaid without any default. No SHG is permitted to pay any penal interest; as a result there have been no defaulters so far. In fact, one loan instalment is paid in advance. The loans are disbursed by the banks on the guarantee of SNDP and its taluk unions.

Already 4,000 SHGs, spread over six taluk unions of SNDP, have entered the second phase and they would be setting up manufacturing units and margin-free shops to market the products manufactured by the SHGs.

The concept of margin-free shops has been introduced to facilitate marketing of good quality products at low prices, besides providing direct and indirect employment to several, said Mr Mahesan. It will also prevent exploitation by intermediaries.

The first such margin-free shop has started functioning at Chertalai in Alapuzha district.

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