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Sustainability of SHGs

Sustainability of SHGs. V.K.Padmavathi Chief Executive DHAN Kalanjiam Foundation. Sustainability. Long term continuation of an institution. Owned, controlled and managed by People. Appropriate systems and processes. Scaling up for sustenance Established partnership with Mainstream

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Sustainability of SHGs

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  1. Sustainability of SHGs V.K.Padmavathi ChiefExecutive DHANKalanjiamFoundation

  2. Sustainability • Long term continuation of an institution. • Owned, controlled and managed by People. • Appropriate systems and processes. • Scaling up for sustenance • Established partnership with Mainstream • Multiple products and services responding to needs • Meeting its own costs. • Fulfilling the developmental needs of the members. • Identity

  3. Dimensions of Sustainability • Institutional - Shared purpose, structure, strategy, staff, systems, style and shared values…… • Financial - Deepening and scaling up financial services (saving, credit and insurance) - Ability to mobilise resources for self growth • Developmental -Achieving poverty reduction -Enhancing quality of life

  4. Institutional Sustainability • Transformation of Group to Institution. • Building an Institutional value framework. • Capacity Building in response to growing needs. • Dynamic systems and processes • Endo system for building sustainable ownership

  5. Challenges • Social mobilisation: Does poverty matter? • Drift from social cause to commercialization • Are the members clientele or owners ? • Multiple membership, clarity of promoters • Does ‘Win-Win’ equilibrium between banks and SHGs exist? • SHGs grow. Does the capacity of governance grow accordingly? • Political Mileage without considering sustainability. • Growth without systems. • Legal framework – Is regulation external or internal?

  6. Financial sustainabilty • Savings: Safety vs. liquidity • Savings vs. loan ratio • Credit vs. package of products • How Efficient are the SHGs in leveraging external loan funds? • Effective interest rate: Are loans from SHGs really affordable? • Gestation period for financial self sufficiency • Increasing costs Vs Services • Promotional costs vs. contexts • Are subsidies boon or bane? • Inadequacy in Financial literacy

  7. Developmental Sustainability • Reducing risks and vulnerabilities • Deepening Livelihoods • Deepening Civic interventions. • Forward and Backward linkages. • Reaching the left out poor. • Ensuring poor getting entitlements. • Nurturing Democratic practices • Transforming into civil society.

  8. Thanks

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