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Microfinance challenges: empowerment or disempowerment of the poor?

Isabelle Guérin
Jane Palier

Part III - Assessing microfinance

21. Empowerment of SHG/DWCRA women through microfinance: A study in Andhra Pradesh

D. Vasudeva Rao

Texte intégral

“Coming together is a beginning, keeping together is progress, working together is success.”
- Henry Ford

1For the overall development of society, women need to be empowered to manage their affairs on their own, without interference from males. In a traditional, patriarchal society, this is possible only when women are brought together as a force, with economic empowerment and social development operating together as well as simultaneously. The Andhra Pradesh government has been working for the cause of women’s empowerment for the last decade. Presently, there are 4.7 lakh SHG groups in Andhra Pradesh with a membership of 65 lakh women, and a corpus of Rs.1,590 crores, including Rs.697 crores provided by the State government.

Rationale for the study

2Though the government has been spending a lot of time, money, personnel and other resources on the formation of self-help groups (SHGs), there have been inadequate studies on the levels of development achieved by these groups. There are also no specific studies to evaluate the levels of social development achieved by these groups. Several studies have been conducted by different organisations in the past on the formation, composition and functioning of the SHGs, but a limited number on their economic activity such as savings, lending, following banking procedures, recovery rate and increase in the individual income through micro enterprises. With the financial support from the Malcolm and Elizabeth Adiseshiah Trust, Chennai, the Council for Social Development (CSD) at Hyderabad has taken up a detailed study on assessing the social development aspect through microfinance of the women in the SHGs. The social development/empowerment of these women is studied with special reference to their attendance, participation and achievement, of specific demands through group meetings, self-management capacities, change in their role in decision making at the household, community, and village level affairs, their participation in the village level community based organisations (CBOs) and Panchayati Raj institutions. This paper is an abstract of a much larger study conducted by CSD on 1,000 women’s groups from three districts of Andhra Pradesh.

Major objectives

3The main objective of this study focuses on the all-round development achieved by the SHG/DWCRA (Development of Women and Children in Rural Areas) women’s groups in Andhra Pradesh. More particularly, it focuses on the sustainability of the programmes, i.e. the involvement of the community in planning and implementing several development programmes so that development activities will be carried on by the communities even after outside assistance is withdrawn. In other words, it measures whether the women have been practicing advocacy for their rights, their improved role in decision-making, and whether they have become articulate, empowered, and capable of self-management.

4The following outputs/measurable indicators, which are likely to reflect the all-round development among the women groups (Counts 1996) are studied:

  1. Urge for literacy (daughters)
  2. Acceptance of family planning
  3. Self-esteem
  4. Participation in local self-government (Sarpanch, President)
  5. Active role in CBOs: Vana Samrakshna Samiti (Forest Protection Committees), Water Users Association, Village Development Councils, Village Education Committees, etc.

1. Methodology

1.1. Sample design

5A 1.5 per cent sample from each selected district is proposed for this study from the 1.15 lakhs DWCRA groups and 2.19 lakhs SHG groups in Andhra Pradesh. The three districts selected for the study are based on their performance against the State average. A 1.5 per cent sample of 150 groups was selected from Khammam district (representing Telangana region), which showed the lowest performance. Similarly, Kurnool district (Rayalaseema region) has been selected for its moderate performance with 195 groups. East Godavari district from the coastal area had the highest number of groups and the best performance and was selected with 655 groups. The samples were selected to cover adequately different castes (Scheduled Castes, Scheduled Tribes, Backward Class/Castes, Other Castes), occupations (agricultural labourer, sub-marginal farmer, asset-less, destitute), tribal and non-tribal areas, and literacy levels. By adopting multistage random sampling, six mandals were covered in East Godavari district, spanning over 60 villages, in Kurnool district three mandals were covered, spreading over 15 villages, and 38 villages were covered in three mandals of Khammam district to cover the 1,000 groups. The samples were carefully selected within the three geographical areas in order to study the differentials between the tribal areas, developed areas and well-developed areas.

1.2. Choice of tools and indicators

6To collect information from these groups, a questionnaire was prepared in Telugu, the local language, covering the objectives of the study. It was pretested in some of the areas for clarity, use of local dialects, and ambiguity between the interviewer and the respondent. It was also tested to reduce as far as possible the technical terminology and ensure the logical sequencing of questions. In addition, members from different groups in each village were assembled together and a focus group discussion was held on various topics to elicit details about the group’s formation, and the perceptions and reactions of its members, to gauge the overall situation and record the group behaviour as a whole. DRDA officials and bank officials were also interviewed to elicit their experiences and suggestions to improve the present functioning of the groups, and to get the views of the service providers at the micro-level and the line department officials involved in the formation and sustaining of the groups.

Box 1. Details of instruments used for data collection

1. Group leaders’ general identification (10 questions)
The information related to age, caste, religion, educational status, main occupation, marital status, household size, land particulars and household income per month.
2. Details of the group (21 questions)
The information related to the age of the group, the respondent’s position in the group, particulars of each group member, motivational factors to join the group, attendance, participation and achievement particulars, group dynamics, linkages with financial institutions, election of the leader, savings, lending, recovery activities.
3. Self-management aspects (7 questions)
Details on who writes the accounts, how the subscriptions and loan instalments are collected, who writes the minutes, how passbooks are maintained, and so on.
4. Loan details (6 questions)
Amounts saved through contributions, government’s contribution, bank loans (details about seed capital available for rotation), purpose, amount, outstanding and overdue particulars of the loans, processes of the loan sanction, etc.
5. Impact of SHG (20 questions)
Detailed information on the change in the perceptions/experiences of the women before and after joining the group, changed role of women members in decision making in family matters as well as in solving community issues.
6. Occupational mobility (8 questions)
Occupation mobility was the response of each member based on their perceptions about changing their occupation in the future, in relation to their improved economic situation as a result of the microfinance, training received, awareness created on income-generating activities, improved self-management skills, and so on. Suitable suggestions were made based on their practical experiences to improve the existing situation.

2. Results of the study: functioning of groups in different districts

2.1. Participation levels of different family members in decision making in family matters

7The responses were graded on a three-point scale. Under each item the share of each family member’s participation was graded as: nil, moderate and active. The main people considered were self, husband, father-in-law and mother-in-law. Information was sought on their daughter’s marriage, dowry, children’s education, asset purchase, major loan, and health care. In each of these matters, the role played by each member of the family produced interesting results. There was perceptible improvement in decision making by women.

2.2. Self-management aspects

8Writing of accounts, collection of monthly contributions, process of giving loans, writing of minutes of the meeting, going to the bank were all considered. Though there was improvement in self-management practices, all the members did not have opportunity to develop. Only leaders were able to do so.

2.3. Composition of capital

9The capital available for the group was made up of three components: the group’s savings, revolving funds from the government, and bank loans. The amount and composition of the funds available for each group in each district varied notably. While savings were more in Kurnool (46%), government assistance (27%) and bank loans were high in Khammam. The groups’ performance was better with higher government assistance.

2.4. Participation in community problems

10It would be of interest to know the improved and increased role of women as a group in solving community problems. The main activities relating to the community were broadly classified as developmental activities such as a check dam, Janmabhoomi, etc., water problems, regular supply and correct billing of electricity, a building for a school, regular attendance by teacher and students, construction and management of low-cost sanitation units, and the laying of kutcha (mud) roads including acquiring of the land for this purpose. Only a few active groups could achieve village development activities. Other groups need exposure in this aspect.

2.5. Change in perceptions on important aspects of social development

11The respondent’s opinions/perceptions on some of the important parameters such as the number of girl children going to school, reduced family size, improvement in individual income, increased working days, asset formation, interface with the government officials, skill improvement, capacity building, trainings and membership in CBOs, etc. were compared between the present and the past in terms of percentages. On some aspects, in some areas, there was improvement. For all-round improvement, capacity building and training classes are needed.

12On the whole, the increase in the percentage of the perceptions (of the respondents) on important matters between two points of time has shown better trends towards higher levels of awareness on issues directly related to social development. The trends are satisfactory in the case of improving skills, self-management, trainings, capacity building and membership in CBOs. A good beginning has been made and with the passage of time, more women are expected to come out with courage.

2.6. Occupational mobility

13The researched also probed into why a few respondents wanted a change of occupation. As expected, 40 per cent did so for more income. Interestingly, around 25 per cent each from the districts mentioned the group spirit (after joining DWCRA) as a reason since their vision had widened and they became aware of alternative occupations available to them. This phenomenon is quite welcome.

2.7. Social emancipation index

14Human behaviour cannot exist in a vacuum. There are many influencing factors that can change behaviour. Conclusions drawn based upon a single parameter at any one point of time may be short-lived and misguided. Hence, a composite index is always better, so that the holistic attitudes of the respondents can be better understood. Hence, some interrelated and mutually influencing parameters were considered for calculating the Social Emancipation Index, making use of 11 indicators, out of which 7 were finally retained. The present Social Emancipation Index was calculated by suitably amending the Social Empowerment Index calculated by Puhazhendi and Satyasai (2001).

15The Index has been calculated separately for each district. These variables were made unit free by turning them into ranks. For each parameter, mean and standard deviations were calculated at the district level. These “unit free values” were summed up across all the 7 parameters for each district. The composite value was compared between the districts to arrive at the over-all performance of the district. The final value for East Godavari was 178, Kurnool, 155 and Khammam, 140. These figures invariably exhibit the level of emancipation achieved by women’s groups in each district.

16The Social Emancipation Index indirectly gives the direction, if not the precise and exact magnitude of empowerment. In those parameters where there is a deficiency, it is recommended that the government take active measures to improve that parameter in that particular district to improve the overall Social Emancipation Index, for the fuller empowerment of women groups.

3. Findings and recommendations

17It has been recommended that a congenial atmosphere be created so that women become members of the SHGs out of self-interest and self-motivation, instead of officials and village leaders motivating them to form groups for their ulterior motivations. This will go a long way for the sustenance of the group.

18Periodical change of leadership is a must for the members to share responsibilities and generate leadership qualities. However the Bank Manager’s reluctance to accept the resolutions to change the leader should be dealt with officially at the higher level. Bank staff should cooperate with the members and leaders and guide them.

19In addition to the group leaders, other members should be trained to write the accounts, go to the bank, and prepare the minutes of the meetings so that over a period of time they will acquire leadership qualities. Hence, periodical training on self-management should be imparted at regular intervals to group members with the help of resource persons.

20The members should be trained to rotate money in the case of emergencies, rather than sharing it equally among themselves. Local resource-based and demand-based micro-enterprises need to be identified, and their feasibility/viability worked out. The necessary skills may be imparted to selected groups of women, for the required Income Generating Activities.

21All the groups should be treated equally by the government and by banks, in extending financial support. Lack of transparency and encouraging particular groups creates suspicion among the other groups. To overcome this, it has been recommended that frequent interface meetings be conducted between the group members and the officials concerned.

22The practice of collecting the thrift amount at the members’ households should be discouraged and regular attendance at meetings should be made mandatory to inculcate group cohesiveness among all members. To minimise irregular repayment or defaulters, peer group pressure should be adopted, rather than involving outsiders.

23On social development, the women need further exposure on aspects such as sending girl children to school and small families. The changes that have occurred since the inception of the groups have been encouraging but are still inadequate.

24The participation of women members of SHGs in local self-government is meagre and membership in CBOs is negligible. So far, economic development has been the single goal and social advancement has taken the back seat. For sustainability, the groups should be trained gradually to take a proactive role in community and village issues, and shape themselves as natural leaders. The share of women in decision-making regarding important domestic matters has been varying between districts and caste groups.

25This study has brought into focus the levels of social development/empowerment achieved by several women groups in the three districts. By and large, the thinking process of the women and the mindset of the group members have been slowly turned towards social issues relating to their family, community and village, as a consequence of the availability of microfinance and the adoption of micro-enterprises. Still, all is not well with all the groups and recommendations were made to improve the groups in specific areas, and the solutions given thereof. The recommendations made by the study have been discussed with the Commissioner concerned in the State government, and they will be considered for future adoption at an appropriate time and location.


Senior Faculty, Council for Social Development, Hyderabad (India)

© Institut Français de Pondichéry, 2005

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