coop-movement & shg

8/7/2019 coop-movement & SHG

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We are indebted to Prof S.C. Mahapatra

and Prof P.K. Bhowmik for providing

us the opportunity and all the

necessary help to prepare this

presentation on COOP MOVEMENT & SHG.

Thanking you,

Ashutosh Swaroop

Durga Nath Bhardwaj

Tuesda batch


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Organizing groups to support

collective and individual credit

acquisition, as well as formal andinformal skills training can assist

peoples in accessing the capital

necessary to initiate small businessesand ultimately help build livelihoodsfor families and communities.


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INTRODUCTIONCOOP

MOVEMENT

Series of organized activities that began in the

19th cent. in Great Britain and later spread to mostcountries of the world, whereby people organize

themselves around a common goal, more

specifically to the formation of non-profiteconomic enterprises for the benefit of those using

their services.


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This is most obvious in the case of Indiawith 70 percent of its one billion plus peopleliving in rural areas where the land availabilityper person has halved to in the past decade.The growing livestock population is competingfor natural resources and food with the humanpopulation. A recent government survey in

India found that 40 percent of small farmerswould move out of the agriculture sector ifgiven a choice.


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A major cause of rural poverty among

small rural producers is their dependenceon rain-fed agriculture. To overcome thispoverty trap for marginal land owners,tenants and landless workers, major rural

investments are needed in irrigation,water and soil conservation, landimprovement and introduction of low-

input farming systems as well as non-farm rural enterprise development inwhich the cooperative sector plays a keyrole.


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India recently adopted an innovativeapproach to poverty alleviation. Alandmark rural employment guarantee

law enacted in 2005 has for the first timea built-in guarantee of 100 days wageemployment or equivalent in cash, for atleast one member of every below-poverty

line rural household.


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Agricultural cooperatives have playeda major role in Indias Green and White

(dairy) Revolutions, providing income

and employment for tens of millions ofrural poor. There are over 150,000

primary agricultural and credit

cooperatives serving over 157 millionagricultural/rural producers


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EMPOWERMENT

Agricultural cooperatives as democraticmember organizations are based upon the

principles of social cohesion, self-help and

equity. In many cases, they provide effectivevillage-level channels for formal and informal

education for small/marginal farmers, landless,

women, indigenous people and other

vulnerable rural poor, empowering them for

effective participation in local-level decision-

making and leadership roles in their

communities.


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RURALENTERPRISE

DEVELOPMENTAgricultural cooperatives are also rural

enterprises of a special kind where profit

making and share holder ownership do notdominate membership participation in business

activities. Cooperative members share high risk

in agricultural activities due to adverse climatic

and market conditions; they also share costs ofinputs/raw materials, and engage in collective

marketing efforts and in seeking improved

access to rural services.


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VALUE ADDITION

Agricultural cooperatives facilitate primary

producers in diversifying agriculture and food

production, reducing production and

marketing risks, improve access to productionand rural services. In several commodity

sectors such as dairy, fruit

production/processing, cooperatives have

enabled integration of hundreds of thousands

of small-scale rural producers into large-scale

rural enterprises able to export a broad variety

of products.


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MARKETINGCHANNELS

Agricultural cooperatives, by eliminating

middlemen help reduce transaction costs and

provide a better market price for smallproducers; they play an increasingly important

role in providing access to rural finance to

small-scale farm/non-farm rural producers who

often due to lack of adequate collateral and

education are unable to access normal

channels of institutional credit.


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PROVIDERSOF

RURALSERVICES

In several Asian countries, agricultural

cooperative networks provide linkages to

other cooperative networks in rural finance,education, health, housing. Several

cooperative networks collaborate with rural

universities, specialized government training

centres in technical and business skills

development for capacity building of different

member categories (women, board members

and managers).


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INFORMATIONNETWORKS

What is needed is more systematic

networking between agricultural cooperatives

and specialized government and NGO

partners for information exchange and

capacity building on sustainable farming

systems, food/product safety standards,

innovative marketing strategies, fair trade,information technologies (IT) to enhance theirbusiness opportunities.


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INTRODUCTION

Self Help Groups or SHGs represent aunique approach to financial

intermediation. The approach

combines access to low-cost financialservices with a process of selfmanagement and development for thewomen who are SHG members. SHGs

are formed and supported usually byNGOs or (increasingly) by Governmentagencies. Linked not only to

banks but also to wider developmentprogrammes


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CHARACTERISTICOF

SELFHELPGROUP

SHGs are small informal and

homogeneous groups of not more than 10

members.

The group should open a savings bank

account with the bank.


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The group should form under the

Block officials, local Panchayatbodies.

The group should maintain simplebasic records such as minute book,membership register, savings andcredit register and bank passbook.


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While a great number ofSHGs have beeninitiated by communities themselves, many

of the SHGs are implemented through the

help of an NGO that can provide the initialinformation and support to establish these

groups.


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DESCRIPTION

Self-help groups are usually informal clubs orassociations of people who choose to cometogether to find ways to improve their lifesituations. One of the most useful roles for a self-

help group is to provide its members withopportunities to save and borrow and it can act asa conduit for formal banking services to reach theirmembers. Such groups can provide a guarantee

system for members who borrow or they maydevelop into small village banks in their own right.In rural areas self-help groups may be the only wayfor people to access financial services .


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FUNCTIONS

SHG is meant to provide mutual

support to the participants by

assisting one another in savingmoney, opening up cooperative

banking accounts that help women

and other peoples to build credit witha lending institution.


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To support members through

maintaining consistent contact amonggroup members to aid the individuals

savings goals.

Supports accountability for ensuring

that the loans are paid back and can

continue to include other members andsupport greater access to credit and

capital to those within their community.


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Provide a space which facilitates the

discussion of many issues pertaining to the

communitys socio-economic, educational

and health status.


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BENEFITS

This process increases confidence among

participants, and help support greater levels

of decision-making status in their society.

This hopefully will encourage members to

participate and contribute in general social

and political matters in their respective

villages.


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As peoples are supported in buildingtheir credit they in turn are able to apply

for micro-loans geared towards a number

of self-sufficiency based business ventures.These business can be as diverse as natural

healing clinics, chicken farms and aqua-

culture projects, to silk weaving or anynumber of handcraft based ventures.


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Many of the SHGs are implemented

through the help of an NGO that can provide

the initial information and support to

establish these groups. Such information and

support often consists of training people on

how to manage bank accounts to include

deposits, withdrawals and balancing of the

cooperative and individual accounts. Similarly

informal education regarding a number ofpossible trades can take place in order to build

up the capabilities of the participants to

function as business owners.


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DRAWBACKS

Many people are in absolute poverty and the

little that they do save can put a family in an

already precarious financial situation in a worse of

place. It can force them to make tough choices aswhether to purchase necessary goods such asfood, clothing, fuel etc. and risk defaluting on

their micro-loans, or in the case ofSHGs hurting

the entire group's ability to take out small loans asthese are dependent upon the entire group's

ability to save and collectively support each other

through generating credit.


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The creation of these businesses often

adds greater levels of work upon women asthey are committed to the SHG and the

creation of their business to support their

income and yet their household duties arestill expected to be met by their husbands. In

these situations the pressures can be

immense to juggle the business, householdchores and the rearing of children.


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CONCLUSION

Despite some of the draw backs the roleof the SHAG is still a vital and growing

component of bottom-up development,

and hopefully eventuating self-designeddevelopment in the future.


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The SHGs offer one approach to createassociations of support for some of the

most economically marginalized groups

within society. Through the desire ofwomen and other members of the

community theseSHGs can provide an

organized structure for providingemployability and ownership for peoples

otherwise left out.


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Ashutosh Swaroop

(08IE1022)

Durga Nath Bhardwaj

(08IE1016)


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