SHG and their relationship with Development Administration.
What are SHGs?
SHGs are small voluntary associations of people, preferably from the same socio-economic background who come together for the purpose of solving their common problems through self-help and mutual help.
Why did the need for SHG arise?
1. Earlier West imposed development models followed Rostow's theory of development which talked about linear stages of economic growth for development.
2. According to it, a country will need economic engineering (SHG is about social engineering) and proper mixture of aid, saving, investment.
3. Under this approach, large scale development projects were undertaken and many certralized schemes were launched for welfare of people. They followed top down model with one-way communication, from top to bottom.
4. People were not provided choice to select their development agenda. They were imposed schemes from above.
5. As a result these schemes/project did not receive the support of people as envisaged. Moreover this model caused more harm than good and made people worse off in developing countries in the form of
-> Poverty, growing national debt, greater disparity in the income of rich and poor.
-> Economic stagnation.
-> Marginalisation of significant section of society.
-> Political repression.
Difference in the SHG approach
More participative - People are allowed to choose the activity and make progress at their own pace.
Widespread reach - Traditional financial institutions did not have universal reach. Hence local moneylenders were the primary source of credit resulted in exploitation and high level of indebtedness. SHGs facilitated the smooth flow of credit to people.
Innovative - SHGs devised innovative strategies to function efficiently and keeping in needs the local conditions. No centralised model was imposed from above.
This movement does not focus on just provision of credit, instead it focuses on management of savings and credit.
[I think some more points can be added here. Please add them and post them too here]
Evolution of SHG in India :
1. SHG in India were started in 1985 by MYRADA (Mysore Resettlement and Development Agency).
2. In 1992, NABARD started promoting SHGs on a large scale though SHG-Bank Linkage Program.
3. Since then, the number and reach of SHGs increased considerably.
4. In 2001, Government formed National Policy for Empowerment of Women (NPEW) aimed at economic empowerment of women by enhancing supply of credit to women through SHGs.
Objectives of SHGs :
1. Inculcate the habit of saving and financial management among rural women.
2. Build up trust and confidence between rural women and the bankers.
3. To develop group activity so that various welfare programs can be implemented in a better way with the participation of these women groups.
1. Wilson's filtering through the cultural lens : The western model also placed emphasis on providing credit to people so that they can develop. But in case of west, the institutionalised credit disbursal system (okay, read banks) had universal reach. In case of India, many areas were unbanked and add to that menace of moneylenders. Hence, a decentralised and non-institutional system emerged in form of SHGs.
2. Warren Bennis "End of Bureaurcracy" : He predicted about new social structures which were not bureaucratic in structure. SHGs follows a structure different which is flexible and does not follow rigid hierarchy as in Weber's Bureaucratic Model.
3. Elton Mayo's Human Relations Approach : SHGs are like informal group formed in a formal organisation. Members of the SHGs are involved in collective decision making, fixing their targets and helping each other. Hence as opposed to informal groups in a formal organisation, SHGs are more like informal group in informal organisation.
4. Comparative Public Administration : SHG model in India is emulated from Grameen Bank Model of Bangladesh. After seeing the success in India, many other countries emulated that model.
5. New Public Administration : Ideas of relevance, value, equity and change were sought to be adopted by administration. SHGs helped the administration in this. These were agent of change and promoted equity. Also the coming of SHGs led to paradigm shift in attitude of bureaucracy and banks as they started to consider them as partnership with SHGs made their approach more value oriented and relevant to current challenges.
6. Public Choice Theory : It was about giving choice to people. Development Model can also be considered as a service and SHGs provided a choice to people different from government led schemes and projects. "Human behaviour is dominated by self interest and individuals are utility maximizers in every situation" - Since SHG provided better opportunity to people, they embraced it.
7. Paradigm VI - Public Administration as Governance : Nicholas Henry said that “*We are moving away from government and moving towards governance”. Governance is institutionalised and networked. So linkage of SHG with government efforts led to more networking and hence better governance.
8. New Public Service (Denhardt & Denhardt) : It proposed attitudinal change in administrator characterized byinvolvement, co-governance and de-emphasis on govt role. This all is being facilitated by SHGs.
9. Basic Needs Model (Robert McNamara of WB and Mahbub-ul-Haq) : It argued for 'welfare agenda for masses' rather than "growth agenda for classes". It arged for developing human capital through social engineering as opposed to financial capital through economic engg. This all is being facilitated by NGOs and SHGs.
10. Entitlement Model (Robert Chambers and Amartya Sen) : This argued for reversal of entitlement, resources and opportunities so that poor can loose less and gain more. SHGs helps in providing credit to poors thus providing entitlement, resources and opportunities to them.
Thank you for coming this far but now go back to the top and study again. You're not supposed to just glance over it.
References :
1. http://www.ifad.org/operations/projects/regions/pi/paper/3.pdf
2. http://shodhganga.inflibnet.ac.in/bitstream/10603/5387/12/12_chapter5.pdf
