Impact of Self–Help Groups on Local Issues

Assessing the influence of the collective action undertaken by the SHGs created by PRADAN, without the intervention of local governments, the study recognizes the role SHGs play in providing a platform that allows socially disadvantaged women to meet regularly and discuss their problems

Introduction

S elf-Help Groups (SHGs) are the most common form of microfinance in India. The primary aim is to encourage the poor to pool their savings to create a common fund and give small loans to one another. This helps them to save regularly and lend money to members at nominal rates of interest. When these SHGs become well-established, they can open savings accounts in commercial banks and can apply for loans.

In several regions of rural India, women are relatively disadvantaged. They are restricted in their physical mobility, their public role is minimal and access to information is limited. In such a context, SHGs provide a platform that allows women to meet regularly and discuss the problems they face in their daily lives. We provide evidence that the SHG members have undertaken collective action to solve these problems. These actions include manual interventions, campaigns in the village or visits to a government officer to seek solutions. In this article, we evaluate the impact of these actions on the issues that the local authorities deal with.

To perform our analysis, we focused on the lowest official authority in rural India, the gram panchayat, which is divided into several wards. Each of these wards elects a representative, known as a ward member (WM), who then becomes the official spokesperson of his ward. His main responsibility is to communicate about the problems and needs of the ward to officers, who have the financial means and power to solve those issues. A WM is the only official, with the duties described above. There are unofficial bodies, however, which visit the functionaries on their own initiative, to lobby for interventions. We found there were three different types of such bodies: SHGs, individuals and other groups of villagers that meet regularly for non-financial reasons. We labelled this residual category as Other Groups.