chapter  8
31 Pages

Impact of federations on the functioning of SHGs: an empirical study

WithSUNIL KUMAR

The Self-Help Group (SHG)–Bank Linkage Programme is nearing two decades of existence. While the growth has been phenomenal in terms of number of groups, there are several concerns that are emerging on the sustainability of the programme. The premises on which the programme has been built are that the groups will manage on their own after the initial capacity is built; the self-help promoting institutions (SHPIs) will build the capacity of the groups, link them to the banks and scale down their involvement. If banks are the SHPIs, the relationship continues more as a lender than as the capacity builder. Further, once the groups are linked to the banks, they will not need external assistance, and the banks will continue the banking relationship seeing it as a business opportunity. However, fi eld-level experiences of the last two decades show that these two premises are not holding good. The moot question is ‘Can groups manage on their own?’