Question

Major criticism of self help group

Answer 1

The Self-Help Group--Bank Linkage Programme (SHGBLP) of micro-finance for poverty alleviation in India is the largest micro-finance programme in the world. It has emerged as a predominantly significant approach for the growth and development of micro-finance sector in India. Started by the National Bank for Agriculture and Rural Development (NABARD) in 1992 as an experiment with a non-government organization (NGO) named MYRADA in Karnataka, it has undergone from pilot to consultation to implementation phases. It is based on NGOs and banks motivating poor people to form groups, mobilize their savings, and finally link them with banks for credit support to start income-generating activities/micro-enterprises. As on 31 March 2006, a total of 2,238,565 SHGs were linked with banks, 90 per cent of them women groups, having Indian Rs 113.98 billon of loans to 32.98 million poor households. The average loan per group in this programme is Rs 50,917 and per household Rs 3,456. The programme covered 583 districts of thirty-one states. 

Answer 2

Answer:

Criticism of the SHGs

In certain cases, due to lack of continued official support, the micro enterprises started by women SHGs have collapsed, as has happened in case of the Annai Theresa Women's SHG.

The educational status of the members is also below par, making financial management difficult. Also lack of vocational education makes diversification into technical enterprises almost impossible.

Aggregate data regarding actual governance of the SHGs: whether groups once formed continue to function effectively or not and other related themes are yet to be published.

The discontinuation of the functions of the SHGs, lack of cooperation between the members, unavailability of bank linkages, favoritism among members are some of the other issues that need to be addressed.

Increased work burden and responsibility of the household invariably falls upon women, stagnating the SHG movement.

Explanation: