Strength for Today and Bright Hope for Tomorrow

Volume 9 : 2 February 2009
ISSN 1930-2940

Managing Editor: M. S. Thirumalai, Ph.D.
Editors: B. Mallikarjun, Ph.D.
         Sam Mohanlal, Ph.D.
         B. A. Sharada, Ph.D.
         A. R. Fatihi, Ph.D.
         Lakhan Gusain, Ph.D.
         K. Karunakaran, Ph.D.
         Jennifer Marie Bayer, Ph.D.



  • We seek your support to meet the expenses relating to the formatting of articles and books, maintaining and running the journal through hosting, correrspondences, etc.Please write to the Editor in his e-mail address to find out how you can support this journal.
  • Also please use the AMAZON link to buy your books. Even the smallest contribution will go a long way in supporting this journal. Thank you. Thirumalai, Editor.

In Association with




  • E-mail your articles and book-length reports in Microsoft Word to
  • Contributors from South Asia may send their articles to
    B. Mallikarjun,
    Central Institute of Indian Languages,
    Mysore 570006, India
  • Your articles and booklength reports should be written following the MLA, LSA, or IJDL Stylesheet.
  • The Editorial Board has the right to accept, reject, or suggest modifications to the articles submitted for publication, and to make suitable stylistic adjustments. High quality, academic integrity, ethics and morals are expected from the authors and discussants.

Copyright © 2008
M. S. Thirumalai


A Study on the Levels of Living of Self-help Groups in Coimbatore District
with Particular Reference to
Thondamuthur and Perianaicken Palayam Blocks

C. Athena, M.A., M.Phil.


Women's participation in nation's development is not merely a question of providing some special concessions to them. Women's collective action on issues of relevance for their empowerment is the key factor around which women's movement as a whole has to be organised and directed. A nation or a society goes ahead only through the contribution of all its members. "Push the women into the backyards, and society itself will lag behind".

Women's participation is significant in rural development. They put their entrepreneurial skills in all the rural employment activities such as agricultural operations, poultry, sheep rearing, diary, firewood cutting and selling, sale of agricultural produce etc. Though they put their heart and soul in rural employment activities, their economic status is not yet improved. Though they have enough entrepreneurial potential, due to poor financial strength, they are not able to convert their entrepreneurial dream into reality. They need financial assistance.

In the context of designing programmes for the poor, micro finance is recognized and accepted as one of the new development paradigms for alleviating poverty through social and economic empowerment of the poor, with special emphasis on empowering women. The operational framework of micro finance, therefore, essentially rests on the premises that: (a) formation of a self-employment enterprise is a viable alternate means of alleviating poverty, (b) lack of access to capital assets/credit acts as a constraint on the existing and potential micro-enterprises, (c) the poor are capable of saving despite their poor income level. In essence, therefore, micro-finance could be referred to as an institutional mechanism of providing credit support in small amount and usually linked with small groups along with other complementary support such as training and other related services to the people with poor resources and skills for enabling them to take up economic activities. Self-Help Group (SHG) is one such aspect of bottom-up strategy calling for mass action at the local level.

The first effort was taken by NABARD in 1986-87 when it supported and funded an action research project on "Saving and Credit Management of Self Help Groups" of Mysore Resettlement and Development Agency (MYDRA). Then NABARD launched a pilot project to provide micro-credit by linking SHGs with bank in 1991-92. From the period of initiation to till the date, the SHG-credit linkage programme has shown a rapid progress over the years, mainly because it has helped in reducing the transaction costs both at the banks as well as at the borrower's level, almost 100 percent, have further strengthened the concept.

The SHGs linkage programme has so far helped in extending from banking services to more than 45 lakh poor households in India by March 2001, making it the large micro-finance innovative in the World today in terms of outreach. The mission of NABARD is to link one million SHGs with the overall banking systems by the year 2008, facilitating access of hundred million rural poor to formal credit system.


Economic progress in any country whether developed or underdeveloped would be achieved through social development and empowering women would certainly lead to social development. Women constitute equal share with men in total population of our country and in few regions, women's share outnumbered men in total population. Therefore, women's empowerment cannot be just ignored while devising various policies for rural and socio-economic development. Right from the independence, in fact even in the pre-independence era, rural development vis--vis poverty alleviation had been considered as a major challenge to our country. Initially, it was assumed that various Poverty Alleviation Programmes such as IRDP, TRYSEM, DWCRA, ICDP etc., could be able to enhance income level of the rural masses, especially women through trickle down effect. But these programmes failed to achieve the target because 'trickle down' effect of economic growth cannot be achieved if the growth is not accompanied with infrastructure development; which is essential for speedy percolation of the benefit of such programmes. Lack of participatory approach in planning and execution of these programmes result in complete failure to improve socio-economic condition of the poor masses for which these were evolved. At this point of view, micro financing or group lending is being looked upon as the instrument that can be considered as the golden stick for poverty alleviation vis--vis rural development. Therefore, providing micro credit to the rural women through an organised set up will make them enterprising women.

The Self-Help Groups (SHGs) are voluntary associations of people formed to attain some common goals. These are groups that have similar social identity, heritage, caste or traditional occupations and come together for a common cause and manage resources for the benefit of the group members.

The SHG generally has members not exceeding 20. Each group selects among its members a leader called animator. The animator conducts 2 to 4 meetings every month. The group members save a regular amount of Rs.20 to Rs.100 every month. The group rotates the money to the needy members for various purposes at a specified interest rate. As the repayment is cent percent and the recycling is very fast, the savings amount increases faster owing to the accumulation of income from interest. Though the cohesiveness among the members would be increased due to homogeneity of the groups in terms of education, occupation, income distribution, sex composition, but in the long term, stability of SHGs depends on their members' loyalty to it and the adequacy of SHGs to meet the growing needs of the members. After the group stabilizes over a period of six months or more in the management of its own funds, it conducts regular meetings, maintains savings and gives loans to its members on interest.


Mohammad Yunus, popularly known as father of micro-credit system, started a research project in Bangladesh in 1979 and came out with ideas of micro-credit that resulted in the establishment of Grameen Bank in 1983.

In 1984, the Federal Ministry of Economic Co-operation and the Agency for Technical Cooperation of the Federal Republic of Germany undertook a series of studies and workshops on rural finance in developing countries that resulted in a new policy of Self-Help Groups (SHGs) as a financial intermediation between rural poor and financial institutions, in one hand and micro enterprises, on the other.

In 1986, the participation of Asia and Pacific Regional Agriculturalist Credit Association (APRACA) decided on a coordinated programme for the promotion of linkage between banks and SHGs for rural savings mobilization and credit delivery to the rural poor.

In 1989, the Central Bank of Indonesia with the involvement of Self Help Promoting Institution (SHPI) started a pilot project entitled "Linking Banks and SHGs". In 1997, the World Micro-Credit Summit in Washington announced a global target of ensuring delivery of credit to 100 million of the world's poorest families, especially the women of those families, by 2005.


TABLE I Growth of Micro-Credit in India
Source: Karmakar (2002)

Year Number of SHGs Bank Loan NABARD Refinance
1992-93 255 0.289 0.268
1993-94 620 0.650 0.459
1994-95 2112 2.440 2.303
1995-96 4757 6.058 5.661
1996-97 8598 11.840 10.650
1997-98 14317 23.760 21.380
1998-99 32995 57.070 52.060
1999-2000 114775 192.870 150.130
2000-2001 263825 480.870 250.620
2001-2002 461478 545.46 395.73

The pilot project made steady progress during the initial years. During 1992-93, 225 SHGs were linked to banks. The cumulative figure rose to 620 in 1993-94 and then to 2122 in 1994-95. Since then, the figure almost doubled every year to reach a total of 32,995 in 1998-99. The year 1999-2000 can be said to be a turning point in this respect as during that year alone, the number of SHGs linked crossed the total number of SHGs that had been linked since the inception of the programme. The same phenomenon was repeated during 2000-2001. As a result, the number of SHGs linked to banks at the end of 2002 touched a phenomenal figure of 461478.

Data published by NABARD on the subject revealed that the spread of this phenomenon in the country was not uniform. The four southern states (Andhra Pradesh, Karnataka, Kerala and TamilNadu) accounted for 1,87,372 (71 percent) of the SHGs linked. In comparison, the five northern states (Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana and Rajasthan) had only 9,012 SHGs (3 percent) linked as at the end of March 2001.


Under the linkage programme, in all 120 banks are participating. All the 27 public sector banks (State Bank of India and its 7 subsidiaries and 19 Nationalised Banks) in the country are participating in the linkage programme. Besides two private sector banks, 79 Regional Rural Banks (RRBs) and 12 Co-operative Banks are also participating in it.

It was expected that the participation of the banking system in the linkage programme would increase further during the next few years, for the reason that the system has several merits. For bankers, the sphere of interest is the near cent percent repayment rates that have been legendary and are often quoted in support of group finance. Secondly, transaction costs for banks get reduced as monitoring and follow up becomes easier and less time consuming. A part of the cost of monitoring also gets transferred to the intermediary NGO resulting in net saving for the bank. Refinance from NABARD is also available to banks for lending to groups.

The above merits are not only based in theory but have been documented in several studies. Even before the linkage project commenced, a study of 46 SHGs spread over 11 states conducted by NABARD in 1987 observed that defaults were rare as prestige, group pressure and group support worked. However, this repayment was not to the banks but to the group itself. A study of 38 SHGs promoted by Cauvery Grameen Bank showed that with 100 percent recovery and reduced transaction costs for the bank, the experience was a total success. A study of SHGs promoted by branches of Tungabhadra Grameen Bank found that the involvement of SHGs had helped the branches in recovering many old dues.

In the year 1999-2000, a total of 266 banks have participated in the SHGs credit linkage programme as expected. These comprised of 40 commercial banks (55 percent of linkages), 36 RRBs (41 percent) and 61 co-operatives (4 percent). Given the vast network of the banking system in the country and the potential for the SHG linkage programme in different regions, the support by the way of training and sensitization of bank personnel will have to be intensified over the next few years.

The SHGs are being linked with the banks for the external credit under the projects of rural development. Three broad models of SHGs bank linkage have emerged over the past few years in India. They are as follows:


In this model, bank plays the significant role. The bank does formation and promotion of SHG. The bank opens savings accounts of the members. After satisfying the functions, the bank provides credit to SHGs. From the beginning the bank acts as SHG promoter institution. As on 31st march 2000, this model formed 14 percent of the cumulative number of SHGs credit linked with the bank.


Under this model, NGOs, Government agencies or community-based organisations act as facilitating agencies to form SHGs. The groups are developed, nurtured and trained by these agencies. Bank observes the operations of the SHGs and after satisfying the functions, helps them to open savings accounts and provides credit directly to the SHGs. About 70 percent of the SHGs are linked under this model. The state government agencies like DRDA and DWCRA play active role in linkage of this model. Co-operatives have a greater role to play.


This model is totally different from the other two models. Under this model SHGs are nurtured, promoted and even financed by NGOs. NGOs act as facilitator and Micro-Finance Intermediaries (MFIs). After some time, when the SHGs have fully developed and stabilized, banks are being approached by the NGOs for loans, for lending to SHGs. 16 percent of the SHGs are linked during the year 1999-2000.

The joint appraisal team consisting of bank managers, rural development officers, NGOs, project implementation units visit the groups and selects the beneficiaries proposed by the women groups for providing financial assistance to the respective entrepreneurial activities such as setting up of petty shops, vegetables shops, tailoring units, rice mundy, charcoal making units etc.


The working of the Self-Help Groups in general can be outlined as follows:

1. Self-help groups are the informal groups consisting of 15 to 20 poor women/men of the same area. And each group decides the choice of its members and the name of the group.

2. Each group has three office bearers, namely, Animator, Representative I, and Representative II. The Animator presides over the meetings, the Representative I assure that the norms are followed and Representative II looks after the finance of the group.

3. Regular meetings are conducted and all members participate in the meetings, where the member's savings are collected and loans are disbursed. When there is more demand for loans than the level of savings mobilized, then the loan will be disbursed based on the need of the members and purpose of loans. The loan carries a rate of interest of 2 percent a month depending upon the funds availability.

4. Loans are given for various consumption purposes viz, education, payment of old debts etc. The loan amount for each purpose, the repayment period, installments are worked out by the members unanimously.

5. Each group maintains cashbook, general ledger, individual member's ledgers, minute's book etc.

6. Each group has a bank account operated jointly by the Animator and Representatives. The excess savings are deposited in bank account.

7. Each group acts as a financial institution owned and managed by the poor for their betterment and upliftment.

8. The sources of funds for the group are internal as well as external, the internal sources are the member's savings inclusive of the common fund, interest on their loans and loan repayment and the external sources are loans from banks, NGOs aids, grants/subsidies from government and NGOs.

9. Each group collects savings from all members for lending to the needy members. In addition to that, it collects administrative fee and membership fee from the members.

10. As the age of the group increases, the capacity of the group and need for credit also goes up. The funds available in the group become inadequate and the group needs the support of the financial institutions like banks to meet their growing needs. Normally SHGs linkage with banks starts after six months to one year after the groups are capable of managing their own financial transactions.


A typical rural women's SHG performs a number of useful functions, which includes:

  1. Enabling members to become self-dependent and self-reliant.
  2. Providing a forum for members for discussing their social and economic problems.
  3. Enhancing the social status of members by virtue of there being members of the group.
  4. Providing a platform for members for exchange of ideas.
  5. Developing and enhancing the decision-making capacity of members.
  6. Fostering a spirit of help and co-operation among members.
  7. Instilling in members the strength and confidence they need for solving their problems.
  8. Providing organizational strength to members.
  9. Promoting literacy and increasing general awareness among members.
  10. Promoting numeracy and equipping women with the basic skills required for understanding monetary transactions.

This is only the beginning part of the dissertation. PLEASE CLICK HERE TO READ THE DISSERTATION IN PRINTER-FRIENDLY VERSION.

PLEASE CLICK HERE for oblong-size Tables of the Report.

Development of Stroop Effect in Bilinguals | Subtlety, Mockery and Dharma in Shashi Tharoor's The Great Indian Novel | Language Alternation Strategies in Nigerian Hip Hop and Rap Texts | Faithfulness and Adequacy in Translation - A Case Study of the Translation of a Poem Written by Bharathiar | Indianized English in Shashi Deshpande's That Long Silence | Naipaul's Perception of India | Teaching English Word Formation in Academic Writing - Analysis and Remedy | Sabotaged Submission - Interpreting the Role of Women in Scriptures | Socio-economic Profile of Women Prisoners | Study on the Levels of Living of Self-help Groups in Coimbatore District, with Particular Reference to Thondamuthur and Perianaicken Palayam Blocks | Agreement in Tamil and Telugu | Etymological Analysis for Some Words of Body Parts in Semitic Languages (Especially in Arabic & Hebrew) | HOME PAGE of February 2009 Issue | HOME PAGE | CONTACT EDITOR

C. Athena, M.A., M.Phil.
Department of Economics
PSGR Krishnammal College for Women
Coimbatore - 641004

  • Send your articles
    as an attachment
    to your e-mail to
  • Please ensure that your name, academic degrees, institutional affiliation and institutional address, and your e-mail address are all given in the first page of your article. Also include a declaration that your article or work submitted for publication in LANGUAGE IN INDIA is an original work by you and that you have duly acknolwedged the work or works of others you either cited or used in writing your articles, etc. Remember that by maintaining academic integrity we not only do the right thing but also help the growth, development and recognition of Indian scholarship.