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Ch. Prashanth Reddy

HYDERABAD, June 27

THE Andhra Pradesh Chief Minister, Mr N. Chandrababu Naidu, has announced that the State Government was considering winding up of self-help groups (SHGs) which were not functioning well.

As of now, more than 50 per cent of the SHGs in the State would have to be wound up if such a measure were to be implemented. The Chief Minister, however, gave a reprieve by stating that non-performing SHGs would first be advised to improve their performance. If they continued to perform poorly, they would be wound up.

SHGs comprises members who are poor and have low saving capacity.

A typical SHG will have like-minded individuals who volunteer to save small amounts of money in a common pool, out of which need-based loans are given to members for meeting their credit requirements based on the priorities decided by the group. Hitherto, these people used to depend on moneylenders or private sources for meeting their monetary requirements.

In Andhra Pradesh, the SHG programme has developed into a massive movement with the emergence of over four lakh SHGs and 1,300 SHG federations, many of which are functioning under the Mutually Aided Cooperative Societies (MACS) Act of 1995.

The SGHs, under the SHG-Bank Linkage Programme, have so far secured loans from various banks to the tune of Rs 500 crore.

However, according to a study by the Andhra Pradesh Mahila Abhivruddhi Society (APMAS), only one-third of the SHGs are functioning properly in the State. A considerable proportion of them do not have conceptual clarity, loan default is becoming a significant problem and almost 70 per cent of the SHGs are not maintaining books of accounts in an accurate and up-to-date manner.

The study reveals inadequate fund management among the groups. A majority of SHGs practise equal distribution of funds instead of need-based lending. SHGs are not conducting meetings regularly. Democratic decision-making is lacking with most of SHGs being leader-or promoter-dependent.

On the positive side, in most SHGs the savings are regular. SHG members have increased awareness and knowledge, with the groups taking responsibility to ensure proper implementation of Government programmes and schemes.

SHGs are able to demand services and wherever there are good SHGs, various social indicators are improving.

Recent studies by the National Bank for Agriculture and Rural Development (Nabard) have also indicated that there have been perceptible and wholesome changes in the living standards of the SHG members in terms of ownership of assets, savings and borrowing capacity, income generating activities and income levels. On the whole, SHGs were significantly contributing towards poverty reduction in rural areas.

The APMAS Chief Executive Officer, Mr C. S. Reddy, said that there was a need for installation of strong follow-up, reviewing and monitoring systems apart from identification of committed manpower and resource persons at all levels to take the SHG movement forward.

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