3

Scaling Up in Microfinance - Issues and Challenges

However, in scaling-up, while most

available for SHGs. Efforts at improving

promoters have stuck to their models, the

target population coverage, as

basic SHG concept remains the same

compared to geographical coverage ,

with variations in the focus of the SHGs2,

would also help create a stronger SHG

frequency of meetings, levels of

movement, one which is more cohesive,

f e d e r a t i n g , systems followed, and

member-sensitive, viable, sustainable

activities pursued by the SHGs.

and replicable.

In the need to

Staff Capacities: The initial focus on staff

While there are thousands of self-help

achieve targets,

promoting institutions (SHPIs) involved in

c a p a c i t y building, orientation on

the initial

SHG promotion in India, only a handful

community processes and structures and

process of

of them have managed to achieve

the need for people's participation takes

social

significant scale, as they have been

a back seat with greater focus on targets

mobilisation is

constrained by their own institutional

and providing management information

forgotten and

capacities. The experience of the top

systems (MIS) to the SHPI. The SHPI has

the financial

SHPIs reveal that the growth of SHGs

to bring in new staff to cope with rapid

incentive in

promoted by them has been fuelled by

growth needs, resulting in a culture clash

forming an SHG

grants, effective linkages with banks,

between new and old staff. Additionally,

is highlighted

i n n o v a t i v e partnerships, and the

many a time, the focus of staff reviews is

products and services offered.

on the quantitative aspects and rarely

on qualitative aspects. This results in the

The issues that need to be addressed

staff also giving greater importance to

then for effective scaling-up are :

quantitative  aspects  and  not

qualitative aspects in the field.

Process: W h i l e m a n y S H P I s t a k e

Centralisation: The rapid growth forces

significant time in forming the first few

SHGs, there seems to be an urgency

the SHPI to focus on centralisation of

when it comes to scaling up. The targets

information, processes and decision-

agreed upon while receiving grant funds

making for the purposes of ease in

seem to pressurise SHPIs into promoting

implementation  and  reporting.

SHGs in large numbers. This results in the

However, many a time, it is forgotten that

SHPI adopting a target mode, instead

the mantra for sustained growth is

of the original process mode.

decentralisation. Decentralised decision-

making ensures greater ownership of the

Federating SHGs: The role of the

community and allows scope for greater

f e d e r a t i o n and its structure has a

sustainability even beyond the project

predominant effect on SHG functioning.

period and SHPI.

Usually, federations are formed after the

Governance: Leadership rotation,

SHGs are promoted and they feel the

need for a federation. Later, during scale-

without giving adequate time for the

up, many a time the focus is on promoting

leaders to understand the functioning of

the federation at the earliest and then

the SHG and the relation with other

g i v i n g it the responsibility of SHG

stakeholders including the federation, will

promotion. The federation being nascent,

result in the SHG being directed more by

and the leaders yet to understand the

the promoters and staff. It was observed

purpose and logic of SHGs and their

that a considerable number of SHPIs

federations, provide their own version of

b e l i e v e that leadership rotation is

the need to form an SHG.

mandatory each year, with new leaders

being elected. This has resulted in

Shared Vision/Mission: In the need to

members being dependent more on the

achieve targets, the initial process of

staff, either of the SHPI or the local book-

social mobilisation is forgotten and the

keeper, which is not in line with the

financial incentive in forming an SHG is

concept of self-help.

highlighted. This results in SHGs being

Leadership: Development is not being

formed with a different purpose, which

subsequently guides their functioning.

given emphasis, particularly as the

promoters and the federations seem

Coverage: The target approach makes

more comfortable to work through the

the SHPI aim for geographical spread

SHG book-keeper, who is more articulate

rather than for saturating a village/

and

more

comfortable

in

mandal3 /block. Various assessments by

"understanding" issues. This hampers

APMAS have revealed that while most

knowledge development of the SHG

of the SHPIs achieve 100 per cent

l e a d e r s , and also leads to staff

geographical  coverage,  target

domination at a later stage. It has been

population coverage varies between 50

n o t i c e d that the SHG staff (book-

and 70 per cent. This results in the SHPI

keepers), while competent and efficient,

staff covering more villages and

see themselves more as `mentors' of the

distances, requiring greater time and

SHG than as staff, and take an active

effort and, therefore, relatively less time is

role in decision-making. In the SHGs and