'D:\CUSTOMERS\Mate\SaDhan22\SaDh' by Anil

Sa-Dhan Newsletter Volume 4 Issue 2

Community Based Organisations

Director, NIPCCD Swashakti Project, who introduced the

As expected federations mainly engaged in mF or mF

workshop. She said that the Swashakti project targets all

plus, seem to focus on credit delivery and recovery

rural poor women, particularly those who are- a) single and

issues.

heads of households; b) migrants, women in acute poverty,

Very few of them raise finances for supporting their mF.

handicapped; c) Commercial sex workers, primitive tribes and

those facing social and family harassment; d) women living

All the federations play significant role in regard to

in drought and flood or violence prone areas; and e) Scheduled

advocacy on social issues and also focus on other

caste and scheduled tribe families. About 12,000 SHGs have

development work

been formed who are involved in either farm or non-farm

activities. To reach the above figure, she said, " Around 240

His session also emphasized on the importance of the issue

NGOs have been roped in and most of these groups have been

of sustainability of SHG networks. According to him,

linked with the banks. In many places, a second tier of SHG

sustainability could be financial as well as operational. He

"clusters" has also been promoted. Till date 650 cluster-level

defined federations and SHGs in economic terms, and referred

associations have been formed. In some places clusters have

to SHGs as member-oriented firms (MOFs) and the federations

also formed federations. Twenty such federations have been

as investor-oriented firms (IOFs).

formed across the country

This was followed by Vinod Jain's presentation on "SHG

With the introduction of Sa-Dhan Mathew Titus, Executive

Federations - Typology & its features as appearing from the

Director made the gathering walk through on the start up

study co-ordinated by Sa-Dhan. According to this study,

finance and working capital requirements of poor women; the

"Federation is an informal or formal, registered or unregistered,

huge percentage gaps in funding the unorganized enterprises.

association of SHGs." He reported that the study covered 27

He said, "80% of the funds came from the poor and 16%

SHG-federations out of which 13 in the South (Tamil Nadu,

came from the non-institutional sources while institutional

Kerala, Karnataka, AP), 3 in the West (Maharastra), 5 in the

and government welfare schemes provided only 4% of total

North (Rajasthan, UP), 3 in the East (Orissa, WB) and 3 in

funds". Financing the poor should not be looked at from a

the North East (Assam, Manipur). Federations promoted in

charity point of view. It should be considered as a business

the Southern States were older, provided a wider range of

proposition by the banking sector. This could be achieved by

services, and were formalized. Federations in the East west

encouraging MFIs in building strong demand based CDFIs

and North were only emerging, while in the North East region

and by incentivising the banks to provide micro-finance he

they were at a nascent stage. Some of the features of

added. He also advocated a facilitating legal and regulatory

federations according to the findings of the study are given

environment for the emergence and growth of these

below:

institutions.

The formation of Federation starts with the formation

of SHGs, which undertakes savings and credit activities.

Margaret Alva, Chairperson, Committee on Empowerment of

Aggregation of SHGs occurred at different levels.

Women, delivered the opening remarks. She spoke from her

Aggregation of groups at the cluster level - 10 to 15

experiences, and urged the gatherings to keep in mind three

SHGs in the same village or adjoining 2/3 villages,

important issues "that need to be addressed."-i) Creating

seemed to be a natural corollary to the promotion of

alternate banking channel. ii) To make Training materials

a number of SHGs in a pocket. Cluster federations

available in local languages. iii) Addressed the huge gap in

provided identity to the groups at the local level.

Self-Help Groups' formulations. "Issues like regular

Design of subsequent levels or tiers of federations was

contribution, regular meetings and linking SHGs to economic

contingent on the vision of the promoting organization

activities are also important areas to closely look at", she

(PO).

added.

SHG federation model adopted small and large group

characteristics. While SHGs were task groups, clusters

INITIAL FINDING OF SA-DHAN STUDY

and federations aggregated and provided functional

support services, identity, external interface and most

TThe second session started with Sanjiv Phansalkar by his

importantly stability of a large group.

presentation on "SHG Networking: An Institutional Framework".

Some of the observations on the role of promoting institutions

Through a representational system, the members were

made are as follows:

distant from the leaders in large multi-tier federations,

and interacted indirectly and periodically. In such

Promoting Institutions (PIs) focus on giving exposure

federations, leaders were closer or interacted more

to federation leaders and providing leadership training.

frequently with PO leaders than with members. PO

leaders became role models for federation leaders.

Provide training to federation staff on issues related to

managing mF operations.

POs face a significant dilemma in balancing financial

and social intermediation. Financial and social

Provide computer literacy to federation staff and

intermediation requires different approaches and mind

providing infrastructure support to federation seems to

sets. Financial intermediation for sustainability entails

have low priority