A Study on the Socio Economic Conditions of the Members of
Self Help Groups in Krishnagiri District


By

M. Muthu Gopalakrishnan1
Lecturer and Ph.D., Scholar in Commerce
T. John Institute of Management and Science (TIMS)
Bangalore-83

Arun Kumar
Professor
Jawaharlal Nehru University
New Delhi
 


INTRODUCTION

In this globalization and information era, while a small slice of India is rich enough to eat out, drive new cars and shop for luxuries at glitzy malls, millions in the vast, impoverished countryside are still struggling for survival. "Poverty is an acute problem in India. Even though Government is taking a lot of steps, poverty is getting entrenched in more backward areas especially rural areas."2 About two thirds of India's more than 1 billion people live in rural areas, and almost 170 million of them are poor. Although many rural people are migrating to cities, three out of four of India's poor people live in the vast rural parts of the country. For more than 21 per cent of them, poverty is a chronic condition.

POVERTY IN INDIA AT A GLANCE

The Government has been trying to eradicate the poverty right from the independence. It is worth while here to state, to over come the problem of any, one should know well about it. In this regard the following table exhibits the state of poverty level in India.3

TABLE 1
POVERTY IN INDIA AT A GLANCE

Total population (million), 2003

1,064.4

Rural population (as % of total), 2003:

71.7 %

Total labour force (million), 2003

473.3

Female labour force as % of total, 2003:

32.6

Number of rural poor (million) (approximate)

222.0

Poor as % of total rural population, 2000

30.2

Population living below US$1 a day (%), 1990-2002

34.7

Population living below US$2 a day (%), 1990-2002

79.9

Population living below the national poverty line (%), 1990-2001

28.6

                        Source: www.ruralpovertyportal.org

MICRO CREDIT - REACHING THE RMOTE PARTS

Of course, there is a lot of ways and means to be used as the tools to eradicate the poverty in India. But in the recent past microfinance is often considered one of the most effective and flexible strategies in the fight against global poverty. It is sustainable and can be implemented on the massive scale necessary to respond to the urgent needs of those living on less than $1 a day, the World's poorest. Because micro credit can provide a much-needed boost to people's earning power in remote parts of a country and an economy where the formal banking sector has shied away from lending.

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 had initiated in 1986-87.  But the real effort was taken in 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.  In Tamil Nadu the SHGs were started in 1989 at combined Dharmapuri District.  At present 1.40 lakhs groups are functioning with 23.83 lakhs members.  So foe it was utilized by the women members only. Recently many men are also eager to form the 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

The SHGs are functioning on the basis of following aims and objectives.

* 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.

REVIEW OF LITERATURE

To carry out this present study the researcher has gone through various related studies, articles and books. In order to state a few, below listed studies have been given.

Loganathan, P.4 had analyzed the state wise performance of linkage of SHG, with banks in terms of members SHGs linked with banks assessed the extend of involvement banks in the programs. It reveled that Tamil Nadu is one of the top three states in respect of linkage of SHGs with banks.

Shanthi, G. and Dhanalakshmi, C.5 in their article, based on the survey method of multi stage sampling, stated that participation in group activities leads to changed self image, enhanced access to new information, broad knowledge about resource availability and negotiation with government officials. 

The positive impact of the micro finance on life of the rural women came to know by reviewing the article entitled women empowerment and credit control - an empirical analysis on credit recipient of Grameen bank in Bangaladesh published in the ICFAI Journal of Economics.

OBJECTIVE OF THE STUDY

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. The present study was carried out with following objectives

* To highlight the distinct features of SHGs
* To analyze the socio economic conditions of SHG members
* To study the attitude of SHG members towards SHG
* To offer suitable suggestions on the basis of the finding of the study

METHODOLOGY

The present study has conducted in Krisnagiri district of Tamil Nadu. In this district study covers only four villages namely Hanumantheertham, Keelkuppam, Katteri and Puthupatti in Uthangarai block. To collect the data, the researcher has taken 106 respondents on the basis of convenient sampling and pre-tested interview schedule was administered for this purpose. For the usage in the appropriate places, secondary data were also collected from websites and related publications. To analyze the data collected, few statistics namely percentage analysis, ranking and Chi square test were employed.

HYPOTHESES

To carry out the research work, the researcher has set the following hypothesis.
Ho  SHGs do not bring out over all improvement in the socio economic status of the members / clients.
H1 SHGs bring out over all improvement in the socio economic status of the members / clients.

ANALYSIS AND INTERPRETATION

Social structure of people is intimately connected with the economic activities. Economic and social conditions are interrelated. The socio and economic conditions of SHGs' members were studied by analyzing the member's position held in SHGs literacy level, income level, family income, occupation, borrowings, repayment of loan and savings.

REASONS FOR JOINING SHGs
TABLE 2
REASONS FOR JOINING SHGs

Reasons

Preference of Respondents

Total

I

II

III

IV

V

To get loan

40

49

17

-

-

106

To get training

48

24

34

-

-

106

To move with people

-

-

-

70

36

106

To get help to start business

18

33

55

-

-

106

To get information

-

-

-

36

70

106

Total

106

106

106

106

106

 
              Source: Primary Data.

TABLE 3
GARRET RANKING RESULT

Reasons

Total Score

Average

Ranks

To get loan

447

89.4

I

To get training

438

87.6

II

To get help to start business

387

77.4

III

To move with people

176

35.2

IV

To get information

142

28.4

V

                            Source: Research Compilation

The major reason to join the SHGs in the study area is to avail the loan facility of the Groups.

SAVINGS OF THE MEMBERS
TABLE 4
SAVINGS OF THE MEMBERS

Sl. No.

Monthly Savings  Rs.

Before Joining SHGs

After Joining SHGs

No. of Respondents

Percentage

No. of Respondents

Percentage

  1.

Less than 300

19

17.92

11

10.38

  2.

300-699

16

15.09

17

16.04

  3.

700-999

43

40.57

48

45.28

  4.

1000-1299

20

18.87

22

20.75

  5.

1300 and above

8

7.55

08

07.55

 

Total

106

100

106

100

   Source: Primary Data

INCOME OF THE MEMBERS
TABLE 5
INCOME OF THE MEMBERS

Sl. No.

Monthly Income 
Rs.

Before Joining SHGs

After Joining SHGs

No. of Respondents

Percentage

No. of Respondents

Percentage

  1.

Less than 2000

32

30.18

23

21.70

  2.

2000-3000

30

28.30

39

36.79

  3.

3000-4000

28

26.42

28

26.42

  4.

4000-5000

10

9.43

10

9.43

  5.

4000-5000

06

5.67

06

5.66

 

Total

106

100

106

100

    Source: Primary Data

EXPENDITURE OF THE MEMBERS
TABLE 6
EXPENDITURE OF THE MEMBERS

Sl. No.

Monthly Expenditure  Rs.

Before Joining SHGs

After Joining SHGs

No. of Respondents

Percentage

No. of Respondents

Percentage

  1.

Less than 1500

26

24.53

20

18.88

  2.

1500-2000

23

21.70

27

25.47

  3.

2000-2500

28

26.42

29

27.36

  4.

2500-3000

20

18.87

21

19.81

  5.

More than 3000

09

8.48

09

8.48

 

Total

106

100

106

100

    Source: Primary Data

TABLE 7
OVER ALL ECONOMIC CONDITION

Factors

Increased

%

Not Increased

%

Total

Savings

94

88.68

12

11.32

106

Income

35

33.02

71

66.98

106

Expenditure

39

36.79

67

65.21

106

                     Source: Primary Data

SHGs AND SOCIAL EMPOWERMENT
TABLE 8
SHGs AND SOCIAL EMPOWERMENT

S.No.

Resulted in

No of Respondents

Total

Intensity

Value

Rank

SA

A

UD

DA

SDA

1

Equal Status

29

49

6

16

6

106

391

I

2

Power of Decision Making

20

28

17

22

19

106

326

IV

3

Breaking Social, Religious and Cultural Barriers

14

30

32

20

10

10

336

III

4

Increase Status

16

26

35

20

9

106

338

II

         Source: Primary Data

TESTING OF HYPOTHESES

SHGs are independent in bringing out over all improvement in the socio economic status of the members / clients.

To test this hypothesis 3 factors have been taken in to account namely income, savings and expenditure. It is tested with the help of chi square test. The result is exhibited in the following table.

OVER ALL ECONOMIC CONDITION

Factors

Increased

Not Increased

Total

Savings

94

12

106

Income

35

71

106

Expenditure

39

67

106

Total

168

150

318


Applying Chi square test, since calculated value (82.3017) is more than the table value at 5% level of significance (12.83), the hypotheses is rejected.

Inference : SHGs are independent in bringing out over all improvement in the socio economic status of the members / clients.

It means that the SHGs are bringing out overall improvement in the socio economic status of the members / clients

FINDINGS AND SUGGESTIONS

On the basis of the study undertaken researcher is able to provide the following findings and also suggestions.

* Most of the poor people live in rural area in India. India's more than 1 billion people live in rural areas, and almost 170 million of them are poor.

* To eradicate poverty lot of schemes are implemented. One among them is micro credit through SHGs

* Total number of SHGs in the study area 6057 consisting of 84,518 members.

* SHGs are getting popularized by making linkage with banks.

* NGOs are having predominant roll in the flotation og the groups

* The major reason to join the SHGs in the study area is to avail the loan facility of the Groups. So the education level is to be improved.

* The illiterates are also participating as the animators and representatives of SHGs. But it is only 12.20%

* Almost all the groups and members (67%) are not engaged in the self employed activity. They all depend on the agricultural activities. So they should be encouraged to start their own venture.

* By seeing overall SHGs are performing considerable role in the overall improvement in the socio economic status of the rural poor.

CONCLUSION

From this study the researcher is able to conclude that micro finance, micro credit through SHGs has reached the people. There is a steady growth in SHGs and millions of households are being helped through Micro Finance. Therefore, a timely and regular check out will make the micro credit through SHGs to become a harbinger of the overall development of the socio economic development of the rural poor.

REFERENCES

* The Sydney Morning Herald, Nov. 12, 2005
* Journal of AIMA, Vol. 45 Issue 8, August 2006.
* Abhigyan, January-March, 2005.
* Tenth Five Year Plan, Vol. I, Planning Commission.
* Tamil Nadu Journal of Cooperation, July, 2003
* Journal of Marketing and Communication, Vol.1, No.2, September-December, 2004.
* Economic and Political Weekly, September 21, 2005
* Yojana, July 2003
* Yojana, December, 2006
* ICFAI Journal of Financial Economics, Vol. V, No. 2 January 2007
* Business line, Internet edition, Nov.15, 2003.
* Mahalir Thittam (Credit Guidelines for SHGs) Tamil Nadu Corporation for Development of Women Ltd.
* Kisan World Vol 31, No. 10 October 2004
* www.expressindia.com
* www.ruralpovertyportal.org
* www.indianngos.com
* www.tn.gov.in
* www.flyhighonline.com
* www.villagebanking.org
* www.knowledgeallianz.com
* www.microfinancegateway.org
* www.tamilnaduwomen.org
* www.yearofmicrocredit.org

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1. Lecturer and Ph.D., Scholar in Commerce, T. John Institute of Management and Science (TIMS), Bangalore 83.
2. Arun Kumar, Professor, Jawaharlal Nehru University, New Delhi.
3. www.ruralpovertyportal.org
4. Loganathan,P., SHGs and Bank Linkages", Kisan World, vol.31,NO.4, April 2004, pp.24 26
5. Shanthi, G. and Dhanalakshmi, C., Case Study of Women Emporment Through SHGs in Gopichettipalayam Block, Journal of Cooperation, Vol 4, No.10, August 2005, pp 23 -24
 


M. Muthu Gopalakrishnan
Lecturer and Ph.D., Scholar in Commerce
T. John Institute of Management and Science (TIMS)
Bangalore-83

Arun Kumar
Professor
Jawaharlal Nehru University
New Delhi
 

Source: E-mail July 2, 2008

           

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