1.
Dissertation Submitted To
Indian Institute of Technology, Guwahati
In partial fulfillment for the award of the degree of
Master of Arts
in
Development Studies,
By
Kaushal Kishor Kaushal
Under Supervision of:-
Dr. Mrinal Kanti Dutta
Associate professor
Department of Humanities and Social Sciences,
IIT Guwahati

2.
 A SHG is a group of about 10 to 20 people,
mostly women, from a similar class and region,
who come together to form savings and credit
organization. They pooled financial resources
to make small interest bearing loans to their
members. This process creates an ethic that
focuses on saving first. The setting of terms and
conditions and accounting of the loan are done
in the group by designated members

3.
 To asses and analyze the status and reasons of
default in between members of SHG and bank.
 To study the best practices in repayment and
document the mechanisms followed by
organisations, micro-finance institutions and
groups to ensure 100 percent on time repayment

4.
 Study is based on primary and secondary data
 Primary data collected from the set of
questionnaire
 Secondary Data has collected from different
Institutions, organizations, and from various
government website.
 Randomly selected 30 samples from five
different SHGs.
 Sample drawn from 2 blocks in Kamrup
district
 A descriptive study
 Study is more of qualitative nature

5.
 Two blocks in Kamrup® District
1. Sualkuchi Dev. Block
2. Rangia Dev. Block
 Randomly selected five SHGs.
1) Khushi SHG- 6 members
2) Lakhimi SHG-7 members
3)Pragatishil Shuba SHG-5 members
4) Milijuli mahila SHG-7 members
5. Jeuti SHG- 5 members

6.
 Understanding about SHG, microfinance
issues, default issues. Functioning of SHGs,
origin, issues and challenges and got an earlier
understanding of the study

7.
 The origin of SHGs is from the brainchild of
grameen Bank of Bangladesh, which was
founded by Mohammed Yunus. SHGs were
started and formed in 1975.
 In india NABARD initiated in 1986-87.
 But the real effort was taken after 1991-92 from
the linkage of SHGs with the Banks.

8.
 Formative
 Storming
 Norming
 Performing

9.
 Open and voluntary
 Democratically controlled
 Economic participation
 Autonomy and independence
 Education, Training and skill upgradation
 Self-Help and Help to each other members
 Ownership feeling

10.
Sl No.- SHPIs Schemes/Project Remarks
1. Department of women
and child Development
No specific Scheme Groups are organized
by Aganwadi workers
2. Department of Rural
Development
SGSY BPL Group mostly
promoted in
collaboration with
NGO.
3. NABARD and Banks SHG-Bank linkage,
individual rural
volunteers
Through NGO,
commercial Band and
RRBs.
4. Cooperatives The cooperative have
very recently started
forming SHGs.
5. Voluntary
Organization
Support from Donar
agencies and
government program
Groups promoted by
NGOs, under
Government sponsored
programs are often
reported by both (NGO
AND GOVERNMENT)

11.
 Assam has a network of 1335 branches of 24
commercial Banks, 2 Regional Rural Banks
(RRBs) and cooperative Banks in the Assam.
There are 850 Rural,282 semi-rural and 203
urban Branches in the state. North East
Development Finance corporation (NEDFI)
also cater to the credit needs of the state

12.
Microfinance providers in assam
Formal
Bank
Commerc
ial Banks
Co-
operative
Banks
RRBs
NABAR
D
SIDBI
NEDFI
MFI
NGO
NBFC
Rural
dev. dept.
(SGSY)
informal
Private
saving
societies
Village
head,
landlord
village
saving
societies/
Namghar
Goot/Mut
ual
groups
Sanchoi
Samities

13.
 Internal Lending
 A better system of penalizing the members need to be in place. Current
analysis shows that the penalty amount charged is not sufficient enough to
incentivize members not to default indicating a scope of raising the penalty
fee to control defaults further.
 Lending by Banks
 Considering the loan size and default rates, amount disbursed to SHGs need
to be checked which might currently be too high for MP and Karnataka and a
little low for Bihar.

14.
Literacy/Education
Level
Percentage/Number of
Members
1. Illiterate 53.33 (16)
2. Can only sign 26.66 (8)
3. Up to 5th class 6.33 (2)
4. 6-8th class 3.33 (1)
5. 9-10th class 3.33 (1)
6. HSC 3.33 (1)
7. Graduation 3.33 (1)
All 100 (30)

15.
Occupation Number/Percentage of
members engaged
1. Agriculture 20
2. Animal Husbandry 6.3
3. Daily wage worker-Non
agriculture
13.3
4. House hold enterprises 0.00
5. Other/common SHG
enterprises
0.00
7. Housework 53.3
8. All 100

16.
Name of
SHGs
Income from
own
economic
activity
Income from
spouses
Borrowed
from others
Total percent
Khushi SHG 16.66 33.33 50.00 100
Lakhimi shg 14.4 42.8 42.8 100
Pragatishil
SHG
40.00 20.00 40.0 100
Milijuli SHG 28.57 14.28 57.14 100
Jeuti SHG 20.00 0.00 80.00 100
Total 36.66 23.3 40.00 100

17.
Activities Percentage of members
1. Meeting household
expenses, education &
Health issues
53.33
2. Agriculture 13.3
3. Individual
Entrepreneurship
6.6
4. Common
entrepreneurship
0.00
5. Others 26.80

18.
 Spending loan in Non-economic Activities
 Lack of awareness/information to SHG
members.
 Dependence of members to repay the loan is
foremost reason to default

19.
 Widespread laxity in writing and absence of basic
books of record
 Ad hoc formation of groups
 Low incidence of inter-loaning
 Appropriation of benefits by the leaders/ office
bearers
 Credit to group without estimating credit needs of
members
 Lack of effective grading by banks and
organisations.
 Lack of emphasis on group development
 Lack of attention to member savings

20.
 Motivate individual to invest in economic
generation activities
 Focus on common entrepreneurship
 Focus on skill up-gradation training
 Priority should be based on saving than credit
 SHG should go in evolutionary process
 Reduce the dependence
 SHG should undergo in an evolutionary process
 Separate grading and focus on training
 Sustainability questioned?

21.
 Promoting ‘area centric’ federations of SHGs
 Reach out to all poor families, not restrict to
only BPL
 Adopting common approaches
 Saving first, credit later
 Strengthening SHGs Movement in weaker
areas

22.
 Up to 2010, researchers argued, loan
repayment in SHGs is more than 95%, but now
many researcher found that, loan repayment
rate has been decreased and it is now 88%.

23.
 Sahu, G.B,(2010), SHG Bank Linkages in North West India: Experiences and Challenges in Financial Access and Poverty Alleviation, Centre for Micro-
Finance (sub- centre) Institute of Development Studies, Jaipur.
 Sharma, A. (2007), “Expanding outreach to underserved regions: Kick-starting microfinance in North-eastern Region,” Indian Institute of Bank Management,
Guwahati. Retrieved April 1, 2009 from http://www.microfinancegateway.org/gm/document-1.9.26218/01.pdf .

 Subrahmanyam N.,(2009), “Microfinance and SHG-Bank Linkage: Regional analysis and perspectives”, Prajnan, Journal of Social and Management
Sciences, vol. XXXVIII, no. 3, December, pp. 183-202.

 Subrahmanyam N, (2009-10), “MicroFinance and SHG-Bank Linkage: Regional Analysis and Perspectives”, Prajnan, Vol.XXXVIII, No.3, pp 183-202 .

 Tiwari P and Fahad S M, “Concept Paper: Microfinance Institutions in India”, Retrieved from:
http://theatreforum.in/static/upload/docs/MICROFINANCE.pdf (accessed 03/12/2013)

 Choudhury,J.andDevi,R.(2009).Women’sParticipation in Economic Development: Role of SHG In Konwar, K. and S. Das (Eds).Role of women in the socio
economic up-liftment of Assam, Purbanchal Prakash, Guwahati, Assam.

 Gurumoorthy,T.R.(2000).Self help groups empower rural women,Kurukhetra.

 Jain,Ritu.(2003).Socio-Economic Impact Through Self Help Groups,Yojana.

 Kumaran,K.P.(2001).Self help groups of the rural poor in India :Ananalysis,National Bank News Review.

 Misra,C.(2005).SHGs in Unorganised Garment: ACase Study of Madurai. Kurukshetra.

 Sharma, P. And Verma, S.K.(2008).Women Empowerment through Entrepreneurial Activities of Self Help Groups.

 Srinivasan, N. (1995). Group approach to empowerment of rural women-IFAD experience in Tamilnadu state.

 Singh, Y. K. ,Kaushal, S .K. and Gautam, S. S. (2007). ‘Performance of Women’s Self Help Groups (SHGs )in District Moradabad, U.P’,International Journal
of Rural Studies (IJRS,).

24.
Special Thanks to My Guide
Dr. M K Dutta
&
Prof. Barua.