Sa-Dhan Newsletter Volume 4 Issue 2

Community Based Organisations

the supervision of the primary groups but there were too

of vision or idea as to what should be the way forward. Many

many conflicting relationships between them".

years ago, some organizations sought to develop SHGs for

resolving some common problem by credit linkages to the

He further pointed out that cooperative organization and other

banks. Later on it evolved into a development approach. A

community organization's function on the principle of self-

stage had come where federations were required to give SHGs

regulation and self-supervision. However, he felt that a third

some sort of organizational support. After all, SHGs are to a

party could play a critical role of supervising or monitoring.

large extent home- grown organizations, which deal with

This third party could be an NGO or any independent party

their own requirements". He also said that SHGs have

doing some supervision and monitoring.

established themselves particularly in some parts of the

country with a little bit of outside support. He suggested that

On the issue of financial sustainability, he said that in most

it was best to leave SHG federation out of the purview of the

multi-tier cooperative style structures, the strongest

government inspectors and government funding, which breeds

organization was at the grassroots, where the real business

its own problems, and evolve a federal system on its own.

happened - the real savings, the real lending, the real

Organizations like Sa-Dhan should survey what has happened

margins, the real services.  Therefore, the primary level

in other countries in similar situations and also look to

organization was the strongest and if they had some left over

homegrown wisdom. Workshops of this type would help to

money, they deposited it at the next level, which by definition

evolve some common knowledge and thinking about the way

was smaller.

ahead.

Commenting on the issue of sustainability of the federation,

Anthony Scoggins, Regional Director, Canadian Cooperative

he said, "Capturing of all the subsidies in an organization was

Association said that the process of promoting a federation

useful but it did not mean that the organization was not

could be seen as the transfer of functions from the promoting

sustainable. For example, if there was an organization that

institution to the federation. However, from the perception of

was meeting the criteria of zero subsidy - i.e., it was

SHGs or the leader of the federation, this was not so much

recovering all its costs from income - and then the government

as a transfer, as it involved things that used to be done for

came out and announced that it was going to give subsidized

free, because either there were grants or the NGO somehow

credit. After getting the loans at subsidized rate and passing

got a subsidy for it. Now the SHGs were expected to pay for

that on to the members and the members repay. Suddenly,

it. So the issue was -- who exactly was going to pay for the

it would appear that the organization that used to be

promotional cost and how it would be done. Therefore,

independent or self-sufficient was not independent, which

federations could and should take on the responsibilities of

was really not true. He suggested that the analysis should be

NGOs till date, and it is hoped that they can do certain things

based on the core cost of the federation. Core cost of the

better or cheaper. But there were also some things that

federation at a certain level would be very low.

perhaps NGOs could continue to do and that they would do

better than the federations. He wondered if federations were

Summing up the day's deliberations, Ganesh Pandey, Executive

necessarily the best institutions to organize new self-help

Director of Shramik Bharti, said there were many issues of

groups. They did not organize themselves in the first place.

concern including the uneven growth of the micro-finance

The NGOs did it. Maybe they learnt something, maybe they

sector in the north and northeast. At the current stage,

could share in that process. Secondly, it is not at all obvious

classifying federations as promoters driven or members

that they could afford to do that unless there are transfers of

controlled may not be very desirable, he pointed out. The

resources and the money that used to go to the NGOs now

federation study by Sa-

goes to the federations.

Dhan apart from providing

On the issue of financial

some insights also raised

intermediation,

Mr.

many questions that need

Scoggins said: "It was not

to be answered. There is a

obvious that federations as

need to share experiences,

financial  institutions,

get insights, handhold,

would do a good job of

and visualize a direction

supervising their member

and definite the future

organizations. There was a

roadmap.

view that there is certain

conflict of interest there.

The  workshop  was

The self-help groups or the

brought to a close with a

primary groups own the

vote of thanks delivered

second-tier groups, which

by Mathew Titus of Sa-

were supposed to be doing

Dhan.

Mrs. Alkwati, Grameen Mahila Swayam Sidha Sangha (Federation) Leader

Speaking at the Workshop

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