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INTRODUCTION

1. REASONS FOR SELECTING MICROFINANCE To get more understanding about SHGs and their microfinance operations. 2. WHAT IS SHG? 3. WHY MICROFINANCE? 4. SERP ROLE. INTRODUCTION.

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INTRODUCTION

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  1. 1. REASONS FOR SELECTING MICROFINANCE To get more understanding about SHGs and their microfinance operations. 2. WHAT IS SHG? 3. WHY MICROFINANCE? 4. SERP ROLE. INTRODUCTION

  2. The broad objectives are to study the microfinance operations in Bibinagar mandal of Nalgonda district and mainly focus on: study Institutional aspects of the CBOs Study about Bookkeeping Study about thrift, credit and other financial services. Study of Bank Linkage Programme welfare and social empowerment of members. Impact of SHG-BANK linkages programmes. The impact of microfinance on SHGs The socio-economic impact on the members of the SHGs Technology initiatives in the mandal. Objective of the study-

  3. Primary sample survey • Questionnaire. 2. Secondary data from- • SHGs • Banks • Vos and Mandal Samakhyas 3. Focus group discussions. METHODOLOGY

  4. In the first step five villages of the mandal were randomly selected. Households of each village were stratified into landless, marginal (less than 2.5 acres), small (2.5 to5 acres), medium (5 to 10 acres) and large (more than 10 acres) farm category. From each village, 1 SHG is selected and 2 SHG members are selected. Thus, totally 20 SHG members were selected by using random sampling method. demographic profiling of the families. borrowing and saving details, involvement in SHG were elicited from these households by using well structured schedule. Sampling Design and Data Collection:

  5. The study covers a wide array of Topics such as: -understanding of SHG meeting process, -understanding of bookkeeping aspects, -understanding of savings and bank linkage programme and Concepts and Analytical Framework:

  6. Self Help supplemented with mutual help can be a powerful vehicle for the poor's effort to socio-economic upward transition Participative financial services management is more efficient and responsive. Poor can save and are bankable The mismatch between the expectations of the poor and capabilities of the formal banking system needs to be minimised Poor need not only credit support but also savings and other services Small affinity groups of the poor, with initial outside support, can effectively manage and supervise micro credit among their members Collective wisdom of the group and peer pressure are valuable collateral substitutes SHGs could be a pre- microenterprise stage for a majority of rural poor SHGs facilitate wider outreach, lower transaction cost and much lower risk costs and Empowerment of poor especially of poor women, is a major outcome The conceptual thinking behind the SHG philosophy and the bank linkage could be summarized as follows: -

  7. SERP standard books of Accounts have been introduced in all SHGs • Hither to NABARD SAP books were used and SHGs switch over to SERP books of accounts. • The following are the books of accounts: • Cash Book • Attendance cum Savings Book • Loan Ledger • Individual Pass Book • Bank Book • Monthly Report(Maasanivedika) • Minutes Book Bookkeeping related:

  8. Book keeper maintains the different book of SHG in proper order. Book keeper does not take the money of the SHG groups. Book keeper has to take the attendance of the SHG groups. Book keeper has the transparency with the SHG groups. Role model as book keeper help the book keeper herself As a book keeper she got monthly rupees 100 as the salary. She also got free training to maintain the book. She had varied knowledge about the performance of the SHG compare with others SHG’s. Responsibility taken care in the absence of book keepers- She will assign the responsibility to another book keeper of any other SHG’s to write the transaction and attendance on some papers. When she will come then she recorded it into the SHG’s books in presence of all the members of the SHG’s. Norms of book keeper:-

  9. In the sample villages, where CRP strategy is being implemented, there are about 1 BKs for 5 SHGs. Only nominal training is imparted. Bookkeepers are frequently changed because unremunerative honorarium Outsiders are writing books in many of the SHGs Situation in the Field:

  10. Proper training to Bookkeepers and refresher trainings on monthly/bimonthly basis need to be given, The status of bookkeeping need to be constantly monitored by VBKs/MBKs The remuneration of the BKs shall be adequately ensured to get more retention as BKs Women SHG members are encouraged to act as Bookkeepers. In the study area, each SHG is having 2-3 women literate members. Suggestions:

  11. 1. OBJECTIVE- It is an investment plan prepared by all group of members in a participatory way on their existing skills. 2. WHY MCP? 3. STEPS INVOLVED IN MCP PROCESS • Household Investment Plan • Understanding the socio-economic status and needs by members • Appraisal of socio-economic status and wealth ranking by members • Appraisal of Needs by members MICRO CREDIT PLAN(MCP)

  12. 5. Consolidation of needs and setting priorities 6. Financing the investments 7. Evolving terms of Partnership KEY ISSUES- • Some of the SHGs not following MCP • Lack of proper understanding about MCP. • The steps involved and calculations of income/expenditure are clearly not understood. • critical rating by bankers and MCP not match. • Sustainability factors. Continued……

  13. SHG’s own funds-The SHGs use their own funds for internal lending among their members and generally charge interest at the rate of 2 - 3 per cent per month on these lending. These rates are still lower than that charged by moneylenders. SERP is also providing grant to Mandal samakhya’s( MS’s) in the form of seed capital. CIF(community investment funds) as seed capital Commercial banks( Andhra bank) Regional Rural Bank( Andhra Pradesh grameen vikas bank) Informal sources( friends/relatives) VO’s savings. Sources of funds and external borrowings in Bibinagar mandal

  14. At one level households use microfinance to meet ‘survival’ requirements where small savings and loans serve as a buffer in the event of an emergency or to smoothen consumption or even service previous debt to give itself more liquidity during lean times. • At the second level, ‘subsistence’ needs are met through microfinance, where a household begins to utilize microfinance to diversify its basket of income-generating activities, or to meet working capital requirements in traditional activities. • At the third level as households reach a stage where they can assume a higher degree of risk, microfinance would be used to invest in setting up an enterprise or facilitating entry into employment in one way or the other in order that the household becomes ‘sustainable’. We can thus see the evolution of Self Help Groups at three levels in the study Area:

  15. SHGs, Vos and MSs acting like a microfinance institutions to the poor. • There is a need to strengthen these institutions through- • Technological intervention • Increasing participation • Transparency • Initial support services. LEARNINGS

  16. THANK YOU

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