saving performance of shg in namakkal district, tamil nadu

1. Saving performanceof SHGinNamakkal district, Tamil Nadu
C. PARAMASIVAN
SHG is dynamic concept which makes an impressive
and essential part in the field of socio-economic
development of the rural people. In India, concept of SHG
was formulated in the year 1989 due to the massive
success story in Bangladesh. It helps to promote the
welfare of the weaker section of the society particularly
women, SC/ST, down drawn people etc. SHG enables to
make the people as empowered through entrepreneurship,
participation in local governance and utilisation of the
welfare programme of the Government. SHG is spread all
over the country with efficient administrative mechanism.
SHG in Tamil Nadu:
Tamilnadu is one of the well developing states in the
country, which records fruitful achievements in socio-
economic developments. First SHG with 15 women
members was formed in Dharmapuri district in 1989, and
nowthereare 4,50,651 SHG including 19,885 youth SHG
with 65,20,000 women members. Thereare2,85,775 SHG
in rural and 1,23,926 SHG in urban part of Tamilnadu.
Savings of the SHG were recorded Rs. 2322 crore
and Rs. 5338 crore given as credit to the SHG in the year
2009. During the year 2009-10, there are 2683 SHG were
benefited through revolving fund scheme. In the year
2008-09, all India bank credit to 10, 81,000 SHG with Rs
11,132 crore. In Tamilnadu alone Rs.2184 crore loan
sanctioned to 2,30,485 SHG. It recorded 21% of the total
bank credit to Tamilnadu.
As per the Indian Bank report Rs.1865 crore
sanctioned to 2,64,825 SHG at all India level. InTamilnadu
alone, Rs.1159 crore sanctioned to 1,75,000 SHG in the
year 2008-09. It recorded 62% of the Indian bank loan to
Tamil Nadu only.
Some of the reviews have been collected from
various published sources which helped to understand the
background knowledge of previous studies about the SHG
in general (Ashoka et al., 2005). Women empowerment
depends upon the success of women development
programmes in terms of women SHG (David et al., 2005).
SHg movement has made an impact on the lives of a
number of individuals and communities, there are many
pockets of societies which have not been involved in the
movement (Gananasamuthy et al., 2006) and the position
of the women before and after the SHG after the formation
they are economically viable and the living status has
improved (Reddy, 2006). Micro finance through SHG has
developed over the past several years as an effective tool
to combat poverty, especiallyin rural areas, andbring about
development. Sharma , 2006 compared thesocio-economic
conditions of members in the pre-and post SHG situations
and the members have improved the business turnover in
the post SHG situations and in turn the net income.
According to Stephen and Selian (2005) NGO can play a
decisive role as an effective delivery mechanism in rural
development they have innate advantage to involve people
and ensure their participation in the agencies and fellow
NGO is added advantage to them.
Objective
Theobjective of the study is to measure the formation
of SHG and to analysis the saving performance of SHG
in Namakkal district.
METHODOLOGY
The present study is descriptive in nature and it is
Correspondence to:
C. PARAMASIVAN, Department of Commerce,
Government Arts College, CHIDAMBARAM (T.N.) INDIA
HIND INSTITUTE OF COMMERCE AND BUSINESS MANAGEMENT
ABSTRACT
SHG is dynamic concept which makes an impressive and essential part in the field of socio-economic development of the rural
people. In India, concept of SHG was formulated in the year 1989 due to the massive success storyin Bangladesh. Tamilnadu
is one of the well developing states in the country, which records fruitful achievements in socio-economic developments. First
SHG with 15 women memberswas formed in Dharmapuri district in 1989, and nowthere are4,50,651SHG.The performanceofthe
SHG is measured only with the help of the savings performance. Therefore, every SHG should be very careful about their
savings performance to perform effectively and provide better service to their members.
Key words : SHG, Saving performance
Accepted : May, 2010
International Journal of Commerce and Business Management (October, 2010) Vol. 3 Issue 2 : 183-185researcharticle

2. 184
HIND INSTITUTE OF COMMERCE AND BUSINESS MANAGEMENTInternat. J. Com. & Bus. Manage., 3(2) October, 2010
based on the secondary data which were collected from
government reports, official gazettes, and RBI annual
reports. Collected data were arranged in a systematic
manner and some of the statistical tools like percentage,
correlation and chi squire test were used for analysis and
interpretation.
FINDINGS AND DISCUSSION
The findings of the present study as well as relevant
discussion have been summarized under following heads:
Formation of SHG in Namakkal district:
Any 15-20 homogeneous group of persons can form
a group and group members should not be of same family
members and a person becomes a members in a group,
she/he can participate all activities and one among the
member and may becomes a leader of the group. Agroup
may be linked with any NGO or bank or MFI according
to the convenient and availability.
Table 1 indicates the age profile of the SHG in
Namakkal district. As on July 2009, there were 10218
SHG functioning, of which 3292(32.22%) SHG were
functioning for more than 4 years, 1887 (18.47 %) for 2-
3 years, 1727 (16.90%) for 1-2 years, 1540 (15.07%) for
6 months to 1 year, 1474(14.42% for 3-4 years and 298
(2.92%) for less than 6 months of experience.
Savings performance of SHG:
Saving is one of the ultimate parts of the SHG which
decides the loan availing capacity of the group. Banks
and financial institutions will provide loans and assistance
based on the saving performance of the SHG. Hence, it
is treated as a parameter of the SHG and how they
functioning in their area.
Table 2 reveals the saving performance of SHG in
Namakkal district as on July 2009. There were 10167
SHG with 161891 members and all the groups were
opened a/c with banks. Savings of the SHG were recorded
about Rs. 67,79,30,067 which included Rs. 49,49,46,326
from village Panchayat Rs. 9,91,20,687 from Town
Panchayat and Rs. 8,38,63,054 from municipalities.
As on whole, savings of SHG upto June 2009 were
recorded at Rs. 57, 34, 09,317 and saving during themonth
of July 2009 was Rs. 1, 21, 41,825.
Savings during July 2009 amounted to 8558550 in
village Panchayat Rs. 1999800 in Town Panchayat and
Rs. 1583475 in municipalities based SHG in Namakkal.
Average savings per month of the SHG in Namakkal
district have been shown in the Table 4. Average savings
per month was high (Rs. 1425) in Town Panchayat,
followed by village Panchayat (Rs. 1125) and
municipalities (Rs. 375). Over all savings per month was
Rs. 75 in Namakkal district.
Suggestions:
SHG in Namakkal district is functioning with
Table 1 : Age profile of the SHG
Age profile Number of SHG Percentage
0 – 6 months
6 months – 1 year
1 year – 2 year
2 year – 3 year
3 year – 4 year
4 year
298
1540
1727
1887
1474
3292
2.92
15.07
16.90
18.47
14.42
32.22
Total 10218 100
Source: Collector office report
C. PARAMASIVAN
Table 2 : Saving performance
Sr. No. Area
Total
SHGs
Total members No of SHGs with
Bank a/c
Total savings Percentage
1. Village Panchayat 7255 114114 7255 494946326 73.00
2. Town Panchayat 1588 26664 1588 99120687 14.63
3. Municipalities 1324 21113 1324 83863054 12.37
Total 10167 161891 10167 677930067 100
Source: Collector office report
Table 3 : Savings upto 2009
Sr. No. Area Savings upto June 2009 Savings during the July 2009 Total savings
1. Village Panchayat 421174676 8558550 494946326
2. Town Panchayat 81877587 1999800 99120687
3. Municipalities 70357054 1583475 83863054
Total 573409317 12141825 677930067
Source: Collector office report

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HIND INSTITUTE OF COMMERCE AND BUSINESS MANAGEMENTInternat. J. Com. & Bus. Manage., 3(2) October, 2010
SAVING PERFORMANCE OF SHG
remarkable achievements since its formation. Majority
of the SHG (32.22%) in Namakkal district were
functioning with more than 4 years. Hence, there is a
need of restructure of the existing regulations and to make
them as full-fledged groups.
Savings performances in village Panchayat were
recorded at remarkable achievement. Hence, it clearly
exhibits that, the SHG is more effective in village than
town and cities.
There was an increase trend in savings performance
of SHG in Namakkal district, during the study period.
Therefore, the government may take necessary steps to
Table 4 : Average savings per month
Sr.
No.
Area
Total savings Average
Savings
1. Village Panchayat 494946326 1125.00
2. Town Panchayat 99120687 1425.00
3. Municipalities 83863054 375.00
Total 677930067
Source: Collector office report
promote the saving habits of the rural people through
proper channel.
Average savings per month of the SHG in Namakkal
district was very low. Hence, the district authorities may
take necessary steps to increase the savings capacity
through increasing the earning capacity.
Saving performance of theSHG in Namakkal district
needs a systematic performance appraisal to achieve the
target of the SHG and its members.
Conclusion:
SHG is one of the innovative concepts which helps
to promote the socio-economic status of the people
particularly in rural areas and also it provides opportunities
to avail thefinancial assistancefromgovernment, financial
institutions and banks. The performance of the SHG is
measured only with the help of the savings performance.
Therefore, every SHG should be very careful about them
savings performance to perform effectively and provide
better service to its members.
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