Module for planning and organizing SHG Trainings

This is a training module for Self Help Groups.

Analysis: Who are targeted? Who are the ‘poor’?

1. Those who have no power of taking decisions for their own lives. They are at the mercy of external forces.
2. Those who belong to the marginalized sections of the in the society, putting them at a disadvantage.
3. Those who are enduring hunger or malnutrition. That is to say, they are not able to feed themselves with nutritious food as required.
4. Those who don’t have access to resources or have limited access to essential resources.
5. Those who are cut off from being able to access services
6. Those who are not aware about their rights and entitlements
7. Those who are landless, without shelter or assets and lack representation.
8. Those who are suffering from lack of sufficient literacy and education.
9. Victims of exploitation or lack of autonomy.
10. Those who rely on physical labour for their livelihood.

In summary, those who suffer from social and economical deprivation of various kinds.

Social mobilization

Social Mobilization Philosophy & Approach

1. The target group (the “poor”) has the potential and willingness to help themselves.
2. They may be weak by themselves but they can be strong in unity.
3. They can improve their lives if they organise themselves by forming an organization. They will have to take full and direct participation and take decisions regarding all issues affecting them.
4. The require opportunities to cultivate their potential to overcome poverty.
5. Social Mobilization enables the poor organize themselves into a group and take decisions to address poverty.

Social mobilization approach is based on the following premise:

• The target group has the potential and willingness to help themselves.
• They need to organize themselves take decisions by the means of having a consensus in their meetings.
• Such organizations are in need of continuous support and guidance from facilitators.
• These organizations can manage themselves and eventually become self reliant through training and capacity building.
• Important community leaders need to be identified to guide the process and provide leadership.
• These organizations require a responsive support system and proper guidance.

Women Empowerment

The need for Women Empowerment

• Women in poor households have to carry the double pressure of poverty as well as household responsibilities.
• They are marginalized and may not have access to their rights or freedom of taking decisions.
• Majority of them lack basic literacy.
• Most of them suffer from lack of proper nurtion.
• They are often the victims of domestic violence and harassment.
• They struggle to have access to health services and education.
• They are likely to be victims of child marriages/early marriages.
• Some women in such households are wage earners and lack control over their lives.
• Women are paid less wages even for equal amount and quality of work.
• Work done by women in such households often is not valued, nor recognized.

What are the objectives of women empowerment?

• Encouraging women organize themselves and cooperate to have better access to opportunities
• Giving women the opportunity to participate directly as full members of their organizations and take decisions for their development.
• Creating awareness so they can identify their needs and are able to get support from their organizations.
• Training them so they can improve their skills and abilities for managing their organizations.
• Making them aware about their rights.
• Educating them to the point of functional literacy.
• Encouraging them to improve their skills for developting their households.
• Making sure that they can be recogised and have equal status and value in decisionmaking for their households.
• Offering opportunities to receive equal respect, value as well as recognition in their society.
• Raising awareness about access to resources and information.
• Giving them the resources and opportunities to gain control over their lives.
• Enabling them to escape and get rid of social evils like early marriages, illiteracy, domestic violence, harassment, exploitation etc. So they can live a life of dignity and freedom without conflict.

Village level Credit Institutions

There are many credit institutions that can offer loans to poor farmers and other people in need for a loan. These include big farmers, traders, money lenders, village cooperative credit societies, commercial banks and rural banks, and most importantly, Self help groups.

Comparision of credit instituions at village level

Here is a comparision of village level credit institutions.

	Availability	Accessibility	Freedom of decision	Control over securities/ mortgage	Favourable interest rates	Social freedom
Big farmers	Moderate: Easy to approach and talk with.	Moderate: Flexibility in paying back. No lengthy procedures.	Very low: Can only borrow on personal understanding. Low wages or no wages for work.	Moderately low: Might be okay, might be exploitive. Deprived of power to bargain.	No: The interest rates are high.	Low: Subject to harssment, bonded labour, humiliation and loss of self respect. Burden of debt.
Traders	Moderate: Easy to approach and contact.	Moderate: No lengthy procedure or documentation. Given in multiple installments with timely credit.	Low: Prices for produce are low and there is compulsion to sell the produce at unfavourable prices or no competition.	Low: there is a perpetual burden of debt along with obligations to sell.	No: High interest rates	Low: because of the imposed terms and prices and debt burden.
Money Lenders	Moderate: Easy to get in touch with.	Moderate: No lengthy procedure or documentation. Timely credit.	Moderately low:  Freedom of deciding how to use the amount exists but the repayment terms restrict the freedoms.	Very low: Mortguage of properties and assets without mercy is common.	No: They are usually very high and exploitive	Low: There might be exploitation in repayment terms, burden of debt. The mortguage and debt may also impact the person’s dignity.
Village  Cooperative Credit Societies	Moderately low: They are available in the village but they are usually dominated by big farmers and loans are not assured on a regular basis.	Low: Untimely disbursement, cannot take loan for all purposes, the poor are out of scope. The procedure and documentation are lengthy.	Moderately low: Loans cannot be taken for any purpose but the terms for repayment are flexible and risk is covered.	Moderate: Properties or assets are to be mortgaged for the loans, but the repayment terms can be negotiated and risk may be considered.	Yes: They usually have low interest rates on purpose to help the villagers.	Moderate: Exploitation usually does not occur but there is no say in the terms. Big farmers usually dominate and landless farmers may not have an opportunity.
Banks	Moderately Low: The banks are available in the village but there are difficulties in accessing loans.	Low: Documentation is usually lengthy and landless poor may not be eligible.	Moderately low:  Repete finance is available but repayment period is not flexible. Loans can be taken only for a few limited purposes. Securitees or guarantees are insisted.	Moderately low: Security and guarantee are insisted as the norm. The terms are not negotiable and the bank may reposses assets on failure to comply.	Yes: They are usually low depending on the state of the economy and competition among banks.	Moderate: There is protection from exploitation but there are also strict legal obligations to fulfil.
Self Help Groups	High: Loans are easily available on time. They are granted on priority of needs. There is also scope for building the corpus to increase loan size.	Very high: They are informal in nature and the members decide the terms and specifics. This makes the loans accessible and the repayments convenient. No lengthy documentation or procedure is required.	Very high: The person taking the loan also has a say in the terms of repayment and the installments and periods may be decided on a case by case basis. They can also be taken for any purpose as per the needs of the members.	High: This might also be a disdvantage because there are no statutory provisions of recovery.	Yes: The interest rates and installments are decided by the members and are flexible and open to discussion.	Very high: Participation in the SHG decision making process is encouraged and the organisation prevents exploitation or unfavourable circumstances for repaymeny.

The following is the same comparision as a radar chart.

Merits and demerits of SHGs

Advantages

1. Loans are available easily, and on time.
2. There is no restriction of purpose.
3. There is no lengthy procedure and documentation for imbursing the loans.
4. Installments for repayments are convenient and can be decided by discussion among the members.
5. The needs of the members are given a priority and there is scope for multiple doses as required.
6. The interest rates and installments are flexible, they are decided by the members and can be renegotiated or changed as required.
7. There is room for building up the SHG Corpus and increasing loan size

Disadvantages

1. The initial loan size is low.
2. There is also a need to save and mobilize external resources.
3. There are no statutory provisions for recovery in case of bad debts.

The concept of Self-help Groups

• Self-help groups are informal association of women from poor households. Members who have similar socio-economic conditions form a group for a common interest.
• The size of a typical SHG group normally is between 10 to 15 people.
• The core principles of the group are self-help and mutual help. The group offers equal opportunity to all the members in participation of the meetings.
• Encouraging the members to save and raise money is the core idea for developing the group.
• The members of the group take all decisions by consenses based on the democratic process.

Management and Financial norms of SHG

After forming a Self Help Group, the members should have a group meeting to finalize the norms of managing the group and finances.

1. The members will decide a name for their group. And then decide the place; day and time for their regular meetings.
2. The group should conduct meetings once every week.
3. The group members will sit in a circle for their regular meetings. This is to enable a face to face discussion. This also encourages active participation of all the members in decision-making.
4. The group shall appoint one of the members to preside over the regular weekly meeting. This is to be done by rotation so all members get an equal chance.
5. The group shall designate two representatives by consensus.
6. The group shall maintain relevant Books of Accounts.
7. The group shall identify either a literate member of the group or an outsider who is willing to work with the group as a bookkeeper to write the Books of Accounts. Trained bookkeepers may be paid the remuneration from the earnings of the SHG.
8. The members will have a consenses and finalize the norms for fines on members who are absent, late-comers or defaulting. This is done as a deterrent so that the group activities continue for a long period.
9. The group members shall consider the ability of the poorest women and on that basis, decide weekly savings for contribution by the members to the group.
10. The group shall also open a Bank Account in the name of the group. The two representatives shall be authorized to operate the account. The group shall process least one transaction with the Bank every month.
11. All decisions in the group meetings are to be taken through a democratic consensus.
12. The group shall make provisions for internal lending to the members. This money is to be taken from the group fund. The felt needs of the members based on poverty status is to be given priority. The group shall also decide the interest rate and installments for repayments for these loans. And then the group shall recover the principal amount and interest according to the installments.
13. The group shall carry out all transactions and activities such as writing the records, sanctioning and disbursing loans only in the group meetings.
14. The group representatives shall always have the group records in the custody. The groups records should not be with the bookkeeper or any other member.
15. The group members should also discuss decide the minimum cash balance to be maintained with group representatives. This is essential for meeting the needs of the members in cases of emergency.
16. The group shall introduce and maintain a monthly reporting system for its performance. It shall be prepared by the Bookkeeper in the last meeting of the month.
17. The group should decide the norms for admitting new members and withdrawing of old members. Their savings contributions and returning of savings should also be taken into consideration.
18. The group should have their records audited once a year.

SHG meetings

1. The group will have a meeting every week and all the members will sit in a circle.
2. The representatives and the bookkeeper should come to the meeting place 10 minutes before the meeting starts.
3. Taking turns every week, one member of the group will preside over the meeting. The bookkeeper will sit by the side of this member.
4. The representatives shall hand over the records to the bookkeeper only in the meeting.
5. The bookkeeper shall record the attendance of the members after prayer by the members.
6. All the members shall participate and finalize the agenda for the meeting when it starts. The presiding member will then take charge to carry out the meeting according to the agenda.
7. The Bookkeeper will write the key points of the discussions and decisions according to agenda. A minutes book is to be maintained for this purpose.
8. The bookkeeper shall write all the records only in the meeting. The records must not be written or altered before or after the meeting.
9. The bookkeeper will read out the decisions, going over each item for the information of all the members.
10. After the savings, loan installments, and interest amounts are collected from the members, the group will sanction new loans by considering emergency needs of the members on a priority, while also giving preference to the poorest members.
11. The presiding member shall also collect the fines for the previous meeting on members who were absent, came late and defaulted. The bookkeeper will make a record of the transactions in the relevant registers.
12. Repayments of previous loans by the members and sanctioning of new loans in the meeting will be recorded in the loan ledger and member passbooks.
13. The details of the cash transactions and cash balance in the meeting will also be read out by the bookkeeper.
14. The bank remittance slip for the last month shall be given to the presiding member during the meeting. It will also be recorded in the minutes book.
15. At the conclusion of the meeting, the bookkeeper will read out the meeting minutes of that day for the information of all the members. Once this is done, the bookkeeper shall take signatures in the minute book.
16. After the signatures are taken, the bookkeeper will hand over all the records to the representatives of the group.

Agenda for SHG Meetings

1. Prayer/Song: All the members will start with a prayer or sing the group song.
2. Introduction of Members: All the members of the group will introduce themselves, starting from the representatives.
3. Attendance of Members:  The bookkeeper will record the attendance in the minutes book. This also includes the names of the members who were absent or came late.
4. Review of resolutions from previous meetings:  Members will review the follow up actions for previous meeting resolutions and will make final decisions.
5. Collecting savings:  All the members deposit savings amounts to the presiding member for that meeting.
6. Collecting loan installments: The borrowers will deposit the installment with the interest to the presiding member in the meeting.
7. Collecting Fines: Absentees, late comers and defaulters of previous meeting will deposit the fines to the presiding member.
8. Sanction of new Loans:
   • Small Loans are sanctioned according to the priority of members’ requirements.
   • Big loans are sanctioned according to the 7 step Process in Micro Credit Investment Plan (MCP).
9. Discussion about Government programs: Discussion about schemes for housing, employment, self-help groups, bank-linkage, insurance etc.,
10. Social Issues: Discussion about issues such as child labour, child education, pregnant and lactating women, early/child marriages, domestic violence, alcoholism etc.

Bookkeeping for an SHG – Need and importance

Why is bookkeeping required for a self help group?

1. For recording all the transactions of the SHG in a continuous manner. This enabling members to understand them easily.
2. All decisions taken by the group will be known to the members. They will be updated about it periodically. This insight enables them to take proper decisions in future.
3. Bookkeeping helps in assessing the financial status of the group. This covers member savings, loans, group fund, recovery percentage, attendance, and so on.
4. Bookkeeping builds confidence and unity among the members.
5. It increases the credit worthiness of the group and promotes institutional development.
6. It allows the group to monitor its performance and consequences of decisions.
7. Good Bookkeeping arrangements will allow the group to expand their scope. They can make use of external resources such as Banks and other agencies.
8. Good Bookkeeping arrangements also enables transparency in transactions to the members. This leads to sustainability of the group and makes the unity of the group stronger.
9. It also helps the group be recognised by public institutions.
10. Bookkeeping also helps with rating the performance of the group.

Concept of having a Bookkeeper in SHG:

1. There will be thrift and credit transactions in every SHG. So there shall be an appointed Bookkeeper to write the books of accounts of the group.
2. The Bookkeeper is to be either a literate member of the group or an outsider who is hired by the group.
3. The Bookkeeper records all the important details in the group meeting.
4. The Bookkeeper is paid monthly remuneration from the earnings of the group for their services.

SHG Training Plan

Session	1	2	3
Subject	Poverty Analysis Social mobilization philosophy and approach Women empowerment	Village level credit institutions. SHG concept	Group management and financial management norms SHG meeting process and meeting Agenda Need and importance of Bookkeeping
Duration	1 Day	1 Day	1 Day
Methodology	Interactive Lecture Method	Interactive Lecture Method	Interactive Lecture Method and Role play Technique
Participants	Community Members Community Leaders Community Staff	Community Members Community Leaders Community Staff	Community Members Community Leaders Community Staff
Training Material	Charts Brown- Sheets Markers Note Books Pens etc.,	Charts Brown- Sheets Markers Note Books Pens etc.,	Charts Brown- Sheets Markers Note Books Pens etc.,
Trainer	Community Trainers	Community Trainers	Community Trainers

Conclusion

This was a training module for SHGs. Please see other posts for relevant topics.