financial inclusion and exclusion dynamics in shg - i b raju

8/12/2019 Financial Inclusion and Exclusion Dynamics in SHG - I B Raju

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FINANCIAL INCLUSION AND

EXCLUSION DYNAMICS IN SELF HELPGROUPSBy

*I.B.Raju,

Mobile:9247857734, email: [email protected]

**T. Venkateswarlu,Mobile:9296050587, email: [email protected]

**G.Krishnam Raju,

Moile: 9849133244, email: [email protected]
mailto:[email protected]:[email protected]://ivdpkrishnagiri.org/images/phocagallery/thumbs/phoca_thumb_l_shanga_loan%204.jpghttp://ivdpkrishnagiri.org/images/phocagallery/thumbs/phoca_thumb_l_ivdp_loan%201.jpghttp://ivdpkrishnagiri.org/images/phocagallery/thumbs/phoca_thumb_l_income%209.jpgmailto:[email protected]:[email protected]


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PrologueAccess to public goods and services is an essential

condition of an open and efficient society

Banking and financial services are in the natureof a public good

It is essential that the availability of bankingservices to the entire population withoutdiscrimination is the prime objective of publicpolicy


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Poor people expectations from the financial

systemSecurity and safety of deposits

Low transaction costs

Convenient operating time, minimum paper workFrequent deposits

Quick and easy access to credit

Remittances suitable to their income andconsumption


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Financial Inclusion ..?

It is the process of ensuring access to appropriatefinancial products and services needed by allsections of the society in general and vulnerablegroups such as weaker sections and low incomegroups in particular at an affordable cost in a fairand transparent manner by mainstreaminstitutional players


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Empirical evidence shows that economic growthfollows financial inclusion

Boosting business opportunities will definitelyincrease the gross domestic product, which willbe reflected in our national income growth


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Financial Exclusion .?

In India, half of the country is unbanked

Only 55 per cent of the population having deposit accounts

Nine per cent of the population having credit accounts

India has highest number of households constituting 145million excluded from banking

There is one bank branch per 14000 people

33,495 bank branches serving the financial needs of six lakhvillages


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Only 20 percent of the population is having life

insurance coverage

9.6 per cent of the population is having non lifecoverage

Just 18 per cent had debit cards

only 2 per cent had credit cards


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Self Help Group(SHG)?A SHG is a group of about 10 to 20 people, usually

women, from a similar class and region, who cometogether to form savings and credit organization

They can pool financial resources to make smallinterest bearing loans to their members

This process creates an ethic that focuses on

savings first The setting of terms and conditions and

accounting of the loan are done in the group bydesignated members


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Financial Inclusion and SHG NABARD was launched the pilot phase of the SHG Bank

Linkage programme in February 1992

Since then commercial bank are financing SHGs in India

The informal thrift and credit groups of poor are beingrecognized as bankable clients

The linking of SHGs with the financial sector is win-winsituation

The banks are able to tap into a large market, namely thelow-income households, transactions costs are low andrepayment rates were high


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SHG movement, National Rural Livelihood Mission (NRLM) plans to

connect at least one woman from each poor household with a SHG toempower and promote economic wellbeing

Presently, there are three crore women who are members of SHGsand planning to raise it to seven crore in the next five years

SHG movement in India skewed and distorted development

70 percent of SHGs and 80 percent of credit flow concentrated in only

four states - Karnataka, Andhra Pradesh, Kerala and Tamil Nadu


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Inclusion and SHG Dynamics

Less Cooperation from family members

Mutual distrust and lack of coordination among

group members skepticism towards its success, doubts on their

ability to save regular basis

Maintaining the records and accounts

Intergroup and Intra groupconflicts


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ConclusionA song is not a song unless you sing

A bell is not bell unless you ring

A Financial Inclusion is not an inclusion unless youinclude what have been excluded

and yes, this is my conclusion for financialinclusion and exclusion


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Thank you

financial inclusion and exclusion dynamics in shg - i b raju

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