The Hindu : New Delhi News : Self-help groups ready for the `next step'

Online edition of India's National Newspaper
Wednesday, Sep 01, 2004

New Delhi

New Delhi

Self-help groups ready for the `next step'

By Our Staff Reporter

NEW DELHI, AUG. 31. Although micro-credit facilities in India for the poor, especially women, have been able to help them establish small businesses and bypass the unfair practices of moneylenders to some extent, they still have a long way to go in terms of making a definite impact on the lives of the people taking the credit.

A recently submitted feedback report by the Centre for Social Research to the Union Human Resources Development Ministry's Department of Women and Child Welfare in the run-up to Beijing+10 review meetings argues that in order to make the entire process economically viable it is important to evolve a mechanism that ensures proper marketing linkages for self-help groups across the country.

"There is a need to establish linkages to speed up various processes like production, packaging, marketing and distribution,'' says Dr. Ranjana Kumari, Director of the Centre for Social Research. The CSR is providing micro credit by forming self help groups called Parivartan Mahila Swawlamban Samiti (PMSS) in the villages near Varanasi in UP. The PMSS members in that area are running successful businesses in the area of flower production and spices. Varanasi, being a religious town, gives these women good marketing opportunities and spices are also sold at a reasonable profit.

"However, these are only some isolated cases. In reality, due to the lack of proper marketing and distribution system these activities fail to take off as a strong movement across the country,'' Dr. Kumari adds.

Even though the SHG model to micro-credit finance (credit provided to a group of women rather than an individual) is more successful in terms of repayment of credit because of peer pressure, the insufficient sale often leads to the burden of repayment and results in losses for these women. "The Government of India is now providing credit facilities to establish marketing linkages which is a welcome move. Such measures need to be undertaken more proactively. The role of big private corporates can also not be undermined,'' argues the CSR director.

The Pooja Group of Singhpur village in Varanasi which is being promoted and supported by CSR is engaged in the production of spices for quite sometime now. In the local market they were successfully selling their products. However, when they decided to expand their market area they faced stiff competition from branded products. The wholesale agencies were unwilling to market their products and they advised group members to improve the quality of packaging to better compete in the market. After improving the packaging, when they again contacted the market they were told to sell the product at a price that would not have earned them any extra profit. In fact, when it was in the simple packet they were earning Re. 1 per packet while quality packaging brought down the profit to 50 paise due to the extra cost.

In such cases, a need is constantly being felt to get the SHG movement to the third stage i.e. the stage of market linkages for small enterprises. In the absence of such measures once again they are bound to face exploitation from the middleman. It is equally important that in this age of globalisation this stage is reached with active support from all stakeholders such as national government, private business houses as well as multinational enterprises.

"SHGs and micro-credit schemes can only be economically viable if they receive proper processing, packaging and marketing support from bigger corporates working in the area of agribusiness. The Government by easing bureaucratic hurdles and identifying right corporate partnerships can take this movement to the next level,'' the report points out.

The Beijing+10 meeting in New York next year is being organised to review the progress made towards the commitments made by non-government organisations and governments at the Beijing platform for action. One of the critical areas identified at the meet was to empower women by eradicating poverty. The micro-credit schemes have given a ray of hope to achieve that goal. It is now time to strengthen the movement by following best practices.

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