DAY-NRLM

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The Union Ministry of Rural Development has started a 15-day country-wide campaign from the 7th to the 20th of September, 2022.
The main objective of the campaign is to expedite the process of mobilisation of left-out poor rural poor women into women’s Self Help Groups (SHGs) across 34 states and Union Territories under Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM).

Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM)

It was launched by the Ministry of Rural Development (MoRD), Government of India in June 2011 as a restructured version of Swarna Jayanti Gram Swarozgar Yojna (SGSY).
- In November 2015, the program was renamed Deendayal Antayodaya Yojana (DAY-NRLM).
DAY-NRLM aims to cover at least one woman member from each rural poor household (about 9-10 crore) under the fold of Self Help Groups (SHGs).
Under the DAY-NRLM interest, subvention is already being provided on loans taken by women Self Help Groups from Banks.
- In 250 backward districts, referred to as Category-I districts, all women SHGs are eligible to get bank loans up to Rs. 3.00 lakh at an interest rate of 7% per annum. An additional Interest Subvention of 3% per annum is provided to women SHGs maintaining prompt repayment and reducing the effective rate of interest to 4%.
- In the remaining districts of the country referred to as Category-II districts, women SHGs under DAY-NRLM availing loans up to Rs. 3.00 lakh from Banks, Interest Subvention is given to the extent of the difference between the Bank’s lending rate and 7% subject to the maximum ceiling of 5.50% per annum.
DAY-NRLM has a provision for providing a Revolving Fund (RF) at the rate of Rs.10,000-15,000 per SHG and a Community Investment Support Fund (CISF) to the extent of Rs. 2,50,000 per SHG.
The Government is taking regular steps to strengthen the SHGs by promoting SHG federations such as Village Organisations (VOs) and Cluster Level Federations (CLFs) which provide handholding support.
Regular training programmes have been conducted for the SHG members on SHG management, financial literacy, livelihoods-related technologies etc.

Self-Help Groups (SHGs)

Self Help Groups (SHGs) are small groups of poor people. The members of an SHG face similar problems. They help each other to solve their problems.
SHGs promote small savings among their members. The savings are kept with the bank. This is the common fund in the name of the SHG.
- The SHG gives small loans to its members from its common fund.
In India, the SHG movement began in the 1980s, when several non-government organisations mobilised and organised poor communities in rural areas and offered them formal channels for social and financial support.
- This programme gained momentum with the National Bank for Agriculture and Rural Development linking a small number of such groups with banks.
- The Self-Help Group Bank Linkage Programme, this revolutionary initiative connected group members, many of whom had never had a bank account before, to formal financial services in a sustainable and scalable manner.
The ideal size of an SHG is 10 to 20 members. (In a bigger group, members cannot actively participate. Also, legally it is required that an informal group should not be of more than 20 people.).
The group normally consists of either only men or only women. Mixed groups are generally not preferred. Women’s groups are generally found to perform better. (They are better in savings and they usually ensure proper use of loans.)
The group should meet regularly. Ideally, the meetings should be weekly or at least monthly.
Membership register, minutes register etc., are to be kept up to date by the group by making the entries regularly.
Simple and clear books for all transactions to be maintained.

Major Functions of SHGs

Savings and Investment
- All SHG members regularly save a small amount. The amount may be small, but savings have to be a regular and continuous habit with all the members.
- “Savings first — Credit later” should be the motto of every SHG member.
- SHG members take a step towards self-dependence when they start small savings. They learn financial discipline through savings and internal lending.
Internal lending
- The SHG should use the savings amount for giving loans to members.
- The purpose, amount, rate of interest, schedule of repayment etc., are to be decided by the group itself.
- Proper accounts are to be kept by the SHG.
Discussing problems: In every meeting, the SHG should be encouraged to discuss and try to find solutions to the problems faced by the members of the group. Individually, poor people are weak and lack the resources to solve their problems. When the group tries to help its members, it becomes easier for them to face difficulties and come up with solutions.
Taking bank loans: The SHG takes loans from the bank and gives them as loans to its members.

Significance of the SHGs

SHGs play a crucial role in overcoming social evils like alcoholism, drug addiction, gambling, etc.
Women's SHGs make their members independent from social constraints and allow them to make independent decisions. They can even actively participate in the Gram Sabha.
SHGs can actively participate in the aspects of local governance. This would mean the inclusion of weaker and marginalised sections of the society in the local governance.
Increase employment opportunities in rural India: It allows for micro-level entrepreneurship within the rural society and reduces too much dependence on agriculture.
Improves the standard of living, family planning, and healthcare, of the vulnerable sections of society.
The members of the SHGs are encouraged to open savings accounts in banks. This assures improved living conditions and increased spending on education, health, etc.

Concern

Many SHGs are dependent on promoter agencies for their survival. In case these agencies withdraw their support, the SHGs are vulnerable to downfall.
The facilitators do not have professional training in organising SHGs.
Most SHGs are not making use of new technological innovations and skills. This is because there is limited awareness about new technologies and they do not have the necessary skills to make use of the same.
SHGs are run by non-professionals. This does not promote the expansion and improvement of the SHGs.
SHGs are mostly not registered. They are run based on trust between the members. The savings made by the SHG members may not be safe, which brings mistrust between the members.

Present Status

In the current Financial Year, up to 28th February 2022, against the target of 7.80 lakh SHGs, 5.43 lakh SHGs have been formed and cumulatively.
A total of 74.80 lakh SHGs have been formed across the country (except Delhi and Chandigarh) under DAY-NRLM.

Way Forward

Self-help groups (SHG) can act as a bridge between women entrepreneurs who have the will to begin an enterprise but do not have the resources to fulfil their dream, and the finances needed for it.
SHGs emerging as important micro-finance systems, SHGs work as platforms that promote solidarity among women, bringing them together on issues of health, nutrition, gender parity and gender justice.
SHGs have already made a significant contribution to developing entrepreneurship aptitudes among rural women by enhancing their skills and giving them a chance to engage in various entrepreneurial activities.
SHGs provide women entrepreneurs with micro-loans to sustain their businesses, while also creating an environment for them to develop greater agency and decision-making skills.
Self-help groups are exceedingly relevant today because their provision of micro-loans helps overcome regional imbalances as well as information asymmetries, thus offering a level playing field in terms of access to resources for women.