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T
he Indian self-help group movement is the world’s largest
microfinance programme. I was perhaps the first person
to point this out, in a conversation many years ago with
Mr Y C Nanda, and it is still true.
Much more important, however, is the fact that it is also the best.
I say this for the following reasons:
• SHGs are linked to banks. India has a vast and effective
banking system, which provides financial services to everyone,
rich and poor. SHG members are not stuck in a specialized
microfinance institution or ‘ghetto’ for the poor, they are
customers of the same institutions as everyone else, and can
as they become less poor, access the same services.
• The SHG movement is wholly Indian, in its origins, its structure
and its management. It is designed for Indian conditions, it
owes little or nothing to foreign money or expertise, and the
Shri Malcolm Harper
International Expert on Microfinance
role of foreign ‘experts’ such as myself has been mainly to
appreciate, to learn, to document and to compare.
Thanks to NABARD’s leadership, innovations such as E-shakti
are rapidly taking shape. I am unqualified to comment on
these and other developments. But I was asked to express my
hopes for the future; professors never resist the temptation to
“profess”, so here goes:
• SHG savings balances are well over $161 billion and loans
outstanding are over $615 billion. I hope that both these
figures will grow and that the level of savings will come closer
to and perhaps eventually exceed the level of debt.
• Many SHG members are opening their own individual savings
accounts and taking loans direct from the banks; I myself do
not save with a group or borrow from one, and I hope that the
100 million plus SHGmembers will soon be able to do the same.
