6
I
t gives me great pleasure to scribble a few thoughts on the
occasion of the seminar being organized by NABARD to
commemorate the completion of 25 years of SHG movement
in India. I was always fascinated by this unique experiment
that combined informal, semiformal and formal approaches to
financial inclusion based on social bonding, particularly among
disadvantaged and deprived sections of the society, through
positive, participative and collaborative group dynamics. My
engagement with the sector grew substantially when I joined as
the Principal of Agricultural Banking (CAB). There my colleagues
and I took a number of initiatives for capacity building among
the bankers, government officials and NGOs for upscaling of the
programme. In particular, SHG groups and their federation were
given an important role as business facilitator/correspondent in
expanding the banking outreach in the report of the Working
Group on Rural Credit and Micro-finance. As we look back at
25 years of history of the movement one feels that while it has
achieved a lot, many challenges remain ahead, more so when one
feels that it has not leapfrogged into higher levels of economic/
livelihood activities, social and financial inclusion, and organised
participation in the markets. Some of the challenges we need
to address are: lack of focus by policy makers in harnessing
SHG movement for financial literacy and inclusion, occasional
political interference vitiating the credit culture, lack of effective
coordination among different programmes for livelihood
development and achievement of the Millennium Development
Goals (MDGs) by leveraging this largest micro finance +
movement in the world, slow progress in building up of credit
history through credit bureaus of groups and individuals, waning
enthusiasm and engagement of bankers in SHG bank linkage
programme, particularly the absence of focus on more intensive
handholding and closer follow-up, non-disbursement of repeat
loans, absence of dedicated verticals at the zonal / head office
level to monitor the progress, absence of comprehensive national
and regional data base on SHGs, building up a robust framework
where technology and people have to be synergized to bring
about desired outcome, smoothing out the design and ground
level implementation issues arising out of bringing women SHGs
under the remit of the National Rural Livelihood Mission (NRLM)
and sharp practices followed by some institutional lenders in
disrupting the sustainable group dynamics of existing SHGs. I
am hopeful that initiatives like E-Shakti programme of NABARD
aimed at digitization of SHGs, use of Aadhar and credit bureaus
for sustainably upscaling the movement and experiments being
undertaken for market linkages through e-commerce will help in
bringing focus back to the importance of SHG movement.
Shri Harun R Khan
Former Deputy Governor, RBI
& Director on the Board of NABARD
