SMART PUSHNOTE – An Agent Based Intelligent Push Notification System 2017-18

CHAPTER 1

INTRODUCTION

The Indian microfinance sector witnessed tremendous growth over the last five years,
during which institutions were subject to little regulation. Micro credit programmes
extend small loans to poor people for self-employment projects that generate income,
allowing them to care for themselves and their families. Some microfinance institutions
were subject to prudential requirements; however no regulation addressed lending
practices, pricing, or operations.

Micro credit has come to be recognized and accepted as one of the new development
paradigms for alleviating poverty through social and economic empowerment of the poor,
with focus on empowering women. Credit is usually provided to groups of individuals or
village organizations that use joint-liability to enforce loan repayment. Through group
savings and loans, poor people often increase their economic security and well-being.
Over the past two decades micro credit programs have emerged as one of the leading
strategies in the overall movement to end poverty.

Micro credit programmes have become a major tool of development and found to be
the only practical and most appropriate solution to alleviate poverty. Micro credit
programmes have been employed in developing countries for some years, and their
effectiveness in the development and poverty alleviation is increasingly acknowledged.

In many countries micro credit programmes have proved to be an effective tool in

freeing people from poverty and have helped to increase their participation in the
economic and political processes of society. The Asia-Pacific region is home to many
micro credit institutions, and the majority of programs are directed at women in rural
areas. Targeting women as clients of micro credit programs has been an effective method
to ensure that the benefits of increased family income are directed towards the general
welfare of the family, and particularly the children.

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The combination of minimal regulation and rapid sector growth led to an environment
where customers were increasingly dissatisfied with microfinance services. For the
purpose of this article, data published by National Bank for Agriculture and Rural
Development in India have been used.

Microfinance needs a lot of regulation in the country as the experience with private
microfinance has not been very good, though the Government was extending
microfinance to self-help groups at 3.5 per cent interest rate, private institutions were
charging between 20 and 25 per cent. “When a person is still fighting poverty, you cannot
expect him to pay high interest,”

Microfinance was usually taken for onetime investments and though the poor seek
money for creating an asset and thereby economic activity, they generally end up clearing
previous debts or giving it away in dowry to their daughter’s marriage or paying hospital
bills. Microfinance is largely supporting to SHG’s, various banks are supporting for the
growth of microfinance. In order to find out the reason for the above said the researcher
has framed the objectives below.

Microfinance is a source of financial services for entrepreneurs and small businesses

lacking access to banking and related services.

Microcredit is a small financial loan made to poverty-stricken individuals seeking to

start their own business. This type of loan typically does not exceed a couple
hundred dollars, so an impoverished individual cannot solely depend on this type of loan
to fund their business. It’s also called micro loan.

 What is the difference between microfinance and microcredit?

Although often used interchangeably, microfinance and microcredit are in fact quite
distinct. Microfinance is a much broader concept than microcredit and refers to loans,
savings, insurance, money transfers, and other financial products targeted at poor and
low-income people. Microcredit refers more specifically to making small loans available
to poor people, especially those traditionally excluded from financial services, through
programmes designed specifically to meet their particular needs and circumstances. 

Microfinance sector has traversed a long journey from micro savings to micro credit and

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then to micro enterprises and now entered the field of micro insurance, micro remittance and
micro pension. This gradual and evolutionary growth process has given a great opportunity to
the rural poor in India to attain reasonable economic, social and cultural empowerment,
leading to better living standard and quality of life for participating households. Financial
institutions in the country continued to play a leading role in the microfinance programme for
nearly two decades now. They have joined hands proactively with informal delivery channels
to give microfinance sector the necessary momentum. During the current year too,
microfinance has registered an impressive expansion at the grass root level.

NABARD has been instrumental in facilitating various activities under microfinance sector,
involving all possible partners at the ground level in the field. NABARD has been
encouraging voluntary agencies, bankers, socially spirited individuals, other formal and
informal entities and also government functionaries to promote and nurture SHGs. The focus
in this direction has been on training and capacity building of partners, promotional grant
assistance to Self Help Promoting Institutions Revolving Fund Assistance (RFA) to MFIs,
equity/ capital support to MFIs to supplement their financial resources and provision of 100
per cent refinance against bank loans provided by various banks for microfinance activities

MODELS OF MICROFINANCE

i. SHG - Bank Linkage Model: This model involves the SHGs financed directly by the
banks viz., CBs (Public Sector and Private Sector), RRBs and Cooperative Banks.

ii. MFI - Bank Linkage Model: This model covers financing of Micro Finance Institutions
(MFIs) by banking agencies for on-lending to SHGs and other small borrowers.

iii. Joint Liability Model: this is a comparatively newer model. These are small groups of
about 5 members and many such groups come together at the centre level.

iv. Lending to the individual by the banks or MFIs: in this the MFIs or the banks give loan to
the individuals who are then themselves responsible for the repayment of the loans.
Micro credit programs are successfully implemented in many countries. The
principles and procedures behind micro-credit are simple, but the system is widely effective.

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Small business loans are provided to people who are not able to get loans from other
institutions because they have no credit history and the interest rates are enormous (regular
interest rates in Tamil Nadu on loans range from 36% to 120% from banks and private money
lenders).

Small business loans are provided to groups of people (Self Help Groups) who trust
each other and are together responsible for the loan. By starting up small businesses with
loans people are in charge of their own future independent of the goodwill of others. Micro
credit loans allow people the opportunity and dignity to create a sustainable income for
themselves. Besides that, loans prepare the borrower also for the commercial world should
their enterprise get big enough for the formal business sector.

The increase in income has a positive effect on the whole family, or even the
community. When the loan is repaid in full, people can look forward to a better overall and
financial future, while the returned funds can now provide the same opportunity and benefits
to another family. AID INDIA’s micro credit system is based on the principles of the famous
Grameen Bank (Bangladesh) micro credit system. We modified the micro credit program
taking into account the situations and laws of Tamil Nadu in the implementation of this
program.

The District Central Cooperative Banks and Urban Cooperative Banks are
implementing this unique scheme to benefit marginalized small and petty merchants and
street vendors engaged in the business of selling flowers, vegetables, fruits and running petty
shops. They are the most vulnerable group for exploitation by usurious money lenders. Their
credit requirements are very small but critical. This scheme which was launched by this
Government has been amplified and streamlined over the years. Under the scheme the loan
amount up to Rs.5000/- is being provided without any security.

Madura Micro Finance Limited (MMFL) whose core business is providing financial
products i.e. credit, to the rural customer is poised for rapid growth in the next three years. A
clear strategy and the necessary systems have been put in place to propel the company to

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greater heights. The primary customer for MMFL is women and together with self-help
groups (SHG’s) the company expects to touch a figure of 1.5 million members from the
current 400,000 in the next three years. MMFL is focused only in Karnataka and hopes to
reach 20% of the rural households in Karnataka.

Grama Vidiyal Micro Finance Ltd (GVMFL), the largest microfinance institution in
Tamil Nadu, will go for its second round of equity funding of about Rs 50 crore shortly.
GVMFL, which started off as an NGO trust to address the issues of poverty and women’s
empowerment, converted itself into an NBFC (non-banking financial company). Its loans to
selfhelp group (SHG) members are typically for six months to one year and range from Rs
1,000 to Rs 7,000 a member in the first instance. Once their track record of regular repayment
is established, members become eligible to draw higher amounts.

In Karnataka microcredit is given to individuals but it mainly focused women

empowerment. There are so many microcredit/microfinance institutions in Karnataka is to
help raise the socio-economic status of women and children belonging to the weaker sections
of society and thus enabling them to become productive members of society. New Life,
through its community owned association structures known as Affinity Association of Self
Help Groups (AASHG), plays an active role in promoting and providing micro-credit.

The AASHGs are community based groups comprised of women leaders that manage the
credit needs of the individuals within that community. Community based affinity associations
are one of the most effective way in channeling the loans to the borrowers. The AASHGs are
responsible for gathering and validating the credit needs of the borrowers, and then New Life
through its partner organization seeks to fulfill these Credit needs.

MICRO-CREDIT BENEFITS THE POOR

There is clear evidence that MF benefits the poor by providing them savings
opportunities and credit. Barrowers often increase their incomes and improve their livelihood

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because of micro-credit. The employment impact is, however more limited. MF leads to
changes in the use of technology only of the less poor as adoption of new technology is risky
and the poorer borrowers are more risk averse.

The poor also benefit from mF a sense of involvement and dignity. Where wide
gender disparities abound, MF catering to women raises their sense of participation and
increases their empowerment. There is however little evidence that MF succeeds in
transforming a community from poverty to prosperity. An economically poor individual gains
strength as part of a group. Besides, financing through SHGs reduces transaction costs for
both lenders and borrowers.

While lenders have to handle only a single SHG account instead of a large number of
small-sized individual accounts, borrowers as part of a SHG cut down expenses on travel (to
& from the branch and other places) for completing paper work and on the loss of workdays
in canvassing for loans.

SCOPE OF MICRO FINANCE

Micro finance usually refers to investments with more opportunity for high profits,
and also more risk: options, futures, currency trading, penny stocks, etc. Profits can be in the
double digit percentages per day! But so can losses, if you're not careful. Other short-term
vestments, like money market funds, can be very conservative and designed to earn a little
while keeping your money safe in anticipation of some upcoming need, such as a down
payment for a house in a few weeks or months.

Microfinance is a broad category of services, which includes microcredit. Microcredit

is provision of credit services to poor clients. Although microcredit is one of the aspects of
microfinance, conflation of the two terms is endemic in public iscourse. Critics often attack
microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'.
The sources of Micro financing include trade credit, bank loans, bankers acceptances,
finance company loans, commercial paper, receivable financing, and inventory financing.
One particular source may be more appropriate than another in a given circumstance; some
are more desirable than others because of interest rates or collateral requirements. Note:
Banker`s` acceptances is a time draft payable on a specified date and guaranteed by the bank.

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SELF-HELP GROUPS AND MICRO-FINANCE

There is a welcome recognition in the Finance Minister's speech of the role MFIs
have played in catering to the credit needs of the poorer sections of rural society. This is a
function mainline bank in India and most other countries have been unable to do on their
own. Since February 2000 when the Reserve Bank of India gave priority sector status to loans
provided by banks to the MFIs, the activity has been mainstream.

Experience of operating a micro-credit model pioneered by the National Bank for

Agriculture and Rural Development (NABARD) during 1991-92 has shown that establishing
a linkage between an SHG and a bank is the best method for bringing SHGs into the ambit of
formal banking especially because it infuses a degree of professionalism into the services
offered to the rural poor.

The budget has ambitious plans to extend the target of credit linking for 2005-06 from
200,000 self-help groups to 250,000. The Government hopes to enhance the beneficial role of
the MFIs as an intermediary between banks and rural borrowers. Commercial banks will be
allowed to appoint MFIs as their "banking correspondents" for providing a variety of services
on their behalf.

That will vastly increase their reach and remove some of the intractable rigidities that
have stood in the way of the spread of rural banking. Close to 70 per cent of the rural poor do
not have a bank account and 87 per cent do not have access to credit from a formal source.
The proposal to appoint MFIs as agents for micro-insurance products will help spread the
insurance habit and enable them to earn a fee income. Another significant proposal is to let
the eligible MFIs seek equity support from the redesignated Micro Finance Development and
Equity Fund, which has a corpus of Rs. 200 crore. Originally confined to the southern States,
micro-finance is fast spreading to the rest of India. For the banking system, the SHG linkage
has been a winning proposition. It has resulted in lower transaction costs, negligible defaults,
and the generation of enormous goodwill.

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The MFIs have been adept at providing customized solutions based on their
understanding of local conditions. However, a number of weaknesses remain. Banks have not
yet standardized their approach towards micro-lending. A lack of infrastructure and design
facilities and also worthwhile distribution channels for marketing the products has
constrained growth.

A number of initiatives are needed to keep the micro-finance system on track. The
goal is to make it a dispenser not just of credit but of a variety of social goods and services to
the rural poor.

MICRO-FINANCE AND ITS OBJECTIVES

The concept of microfinance is not new. Savings and credits groups that have
operated for centuries include the “susus” of Ghana, “chit funds” in India, “tandas” in
Mexico, and “pasanaku” in Bolivia, as well as numerous savings clubs and burial societies
found all over the world. One of the earlier and longer lived microcredit organizations was
the Irish loan fund system, initiated in the early 1700s.

The term micro-finance is commonly used in addressing issues related to poverty

alleviation, financial support to micro-entrepreneurs and gender development etc. Micro-
finance can be defined as “provision of thrift, credit and other financial services and products
of very small amounts to the poor in rural, semi- urban or urban areas for enabling them to
raise their income levels and improve living standards “.

The term micro-finance sometimes is used interchangeably with the term micro-
credit. However, while micro-credit refers to purveyance of loans in small quantities, the term
micro finance has a broader meaning covering in its ambit other financial services like
saving, insurance etc.

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The main benefits of micro-finance appear to be reduced vulnerability of the poor to adverse
circumstances, increased consumption in the same group and empowerment of women.
Fortunately, micro-finance practice in India like some other countries has much to offer to the
rural population. These include poverty alleviation, livelihood promotion, developing the
local economy, gender empowerment, building organizations and changing wider systems
and institutions within society.

DEVELOPMENT OF SHGS

Self Help Groups are considered as one of the most significant tools to adopt participatory
approach for the economic empowerment of women. It is an important institution for
improving the life of women on various social and economic components. The basic
objective of an SHG is that it acts as the forum for members to provide space and support to
each other and get financial sustainability through adopting micro-enterprises based on
availability of resources, prevalent skill and availability of markets for sale of products.
Group entrepreneurship is ideal for weaker sections of the society and it is an instrument
which helps the poor women to overcome their poverty. It gives employment opportunities
for illiterates.

FORMATION OF SELF HELP GROUPS

An SHG both by definition and in practice is a group of individual members who by free
association come together for a common collective purpose. In practice SHG comprise
individual members known to each other coming from the same village, community and even

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marketing neighborhood. That is they are homogeneous and have certain pre group social
binding factors. In the context of micro-finance, SHG are formed around the theme of savings
and credit.

Self-Help Groups don't start with credit; they start as savers groups, with regular weekly for
forthrightly saving targets. Each number of the group has to save a small amount per month.
The savings are deposited in a meeting on an appointed time every week, and the collected
saving are lent to members, with the decision on who gets the loan being taken by the group;
in many groups saving are entered in individual passbooks.

Some groups pay interest on saving, others pay dividends; but most have retained their
earnings as part of their capital. An account is opened with a mainline bank to deposit any
surplus savings. After some six months, the bank where the savings were deposited examines
the performance of the group and issues loans to the group. The SHG in turn increases its
capacity to manage high amount of finance, develop entrepreneurial and communication
skills and logical ability, cooperative sense and finally income and employment generating
confidence.

The main objective of SHGs is to inculcate the habit of thrift, savings and banking culture to
gain economic prosperity through credit. The most important component of SHG is the
mobilization and organization of women towards the basic strength of solidarity, informality
and collective action. Self Help Group methodology is a novel approach in development of
economics. These groups can create a unique, alternative, need-based credit delivery
mechanism by pooling their insufficient resources for catering to their consumption and
occupational requirement.

CHARACTERISTICS OF A GOOD SELF HELP GROUP

Well-functioning SHG should have following structural features:

 An ideal SHG comprises 15-20 members.

 All the members should belong to the same socio-economic strata of society specifically

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poor.

 Group should have strong bond of affinity.

 Rotational leadership should be encouraged for distribution of power and to provide

leadership opportunities to all the members.

 Members should attend meetings, save and participate in all activities voluntarily.

 To provide gainful employment and to involve the poor in productive activities.

 An SHG should be socially viable institution.

 The procedure of decision-making in SHG should be democratic in nature.

 It should be non-partisan in nature.

 The group is frames rules and regulations which are required for its effective functioning.

 To involve women in decision making and to promote leadership qualities among them

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CHAPTER 2

REVIEW OF LITERATURE & RESEARCH DESIGN

Muhammad Yunus, a Nobel Prize winner, introduced the concept of Microfinance in

Bangladesh in the form of the "Grameen Bank". The National Bank for Agriculture
and Rural Development (NABARD) took this idea and started the concept of
microfinance in India. Under this mechanism, there exists a link between SHGs (Self-help
groups), NGOs and banks. SHGs are formed and nurtured by NGOs and only after
accomplishing a certain level of maturity in terms of their internal thrift and credit
operations are they entitled to seek credit from the banks. There is an involvement from
the concerned NGO before and even after the SHG-Bank linkage. The SHG-Bank linkage
programme, which has been in place since 1992 in India, has provided about 22.4 lakh for
SHG finance by 2006. It involves commercial banks, regional rural banks (RRBs) and
cooperative banks in its operations.

 Society is Focusing on: Development of Self Help Group for Women-

In India, Self Help Groups or SHGs represent a unique approach to financial

intermediation. The approach combines access to low-cost financial services with a
process of self management and development for the women who are SHG members.
SHGs are formed and supported usually by NGOs or (increasingly) by Government
agencies. Linked not only to banks but also to wider development programmes, SHGs are
seen to confer many benefits, both economic and social. SHGs enable women to grow
their savings and to access the credit which banks are increasingly willing to lend. SHGs
can also be community platforms from which women become active in village affairs,
stand for local election or take action to address social or community issues (the abuse of
women, alcohol, the dowry system, schools, and water supply).

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 Goals-

Self-help groups are started by non-governmental organizations (NGOs) that

generally have broad anti-poverty agendas. Self-help groups are seen as instruments for a
variety of goals including empowering women, developing leadership abilities among
poor people, increasing school enrollments, and improving nutrition and the use of birth
control.

Financial intermediation is generally seen more as an entry point to these other goals,
rather than as a primary objective. This can hinder their development as sources of village
capital, as well as their efforts to aggregate locally controlled pools of capital through
federation, as was historically accomplished by credit unions.

 NABARD's 'SHG Bank Linkage' program-

Many self-help groups, especially in India, under NABARD’S SHG Bank Linkage
program, borrow from banks once they have accumulated a base of their own capital and
have established a track record of regular repayments.

This model has attracted attention as a possible way of delivering micro-finance

services to poor populations that have been difficult to reach directly through banks or
other institutions. "By aggregating their individual savings into a single deposit, self-help
groups minimize the bank's transaction costs and generate an attractive volume of
deposits. Through self-help groups the bank can serve small rural depositors while paying
them a market rate of interest."

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Advantages of financing through SHGs

 An economically poor individual gains strength as part of a group.

 Besides, financing through SHGs reduces transaction costs for both lenders and
borrowers.
 While lenders have to handle only a single SHG account instead of a large number of
small-sized individual accounts, borrowers as part of an SHG cut down expenses on
travel (to & from the branch and other places) for completing paper work and on the loss
of workdays in canvassing for loans.

 Evolution of Self Help Groups in India

In India, soon after independence, there has been an aggressive effort on the part of
the government, which was concerned with improving the access of the rural poor to
formal credit system. Some of these measures have been institutional, while some others
were through implementation of focused programmes for removal of rural poverty.
Reaching out of the far-flung rural areas to provide credit and other banking services to
the hitherto neglected sections of the society is an unparallel achievement of the Indian
banking system.

The main emphasis is the spread of the banking network and introductions of new
instruments and credit packages and programmes were to make the financial system
responsive to the credit the weaker sections in the society comprising small and marginal
farmers, rural artisans, landless agricultural and non-agricultural laborers and other small
borrowers falling below poverty line.

Consequently, by the implementation of several poverty alleviation programmes, the

number of people below the poverty line has declined from 272.7 million in 1984-85 to
210.8 million in 1989-90, in 1991-2000, which constitutes over 21 percent of the
population.
The institutional credit system needs to meet the challenges of delivering credit to an
ever-increasing number of rural people who need greater access to formal credit. It may

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have to reinforce its own structure at the grass root level and also have to devise new
ways of reaching out of the rural poor.

As a result, the experience of implementation of the above discussed poverty

alleviation programs lead to the introduction of the Integrated Rural Development
Programmed (IRDP) on 2nd October, 1980 with the specific objective of raising the poor
rural families above the poverty line. Such families considered credit support from banks
as an important input in taking up economic and gainful activities.

In spite of these impressive achievements in the expansion of the credit delivery

system and special programmes, nearly half the indebted rural households are still outside
the ambit of the institutional system. They approach the moneylenders for meeting their
consumption and production in the absence of institutional support.

Some of the poor who have not been reached even by the vast network of the
institutional credit delivery system, have organized themselves into self help groups
(SHGs) and many such groups have come into existence either spontaneously or with the
active involvement of the voluntary agencies which motivated the rural poor to pool their
meager financial resources for meeting their small and frequent consumption and
production credit needs.

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BASIC KNOWLEDGE OF SHG

I. What are SHGs?

Self help Group (SHGs) are small group of poor people. The members of an SHG face
similar problems. They help each other, to solve their problems. SHGs promote small
saving among their members. The savings are kept with the bank. This is common fund in
the name of the SHG. The SHG gives small loans to its members in the name of common
fund.
I. Size of the SHG
 The ideal size of an SHG is 10 to 20 members. 
II. Is it officially recognized to the bank with informal groups?
 Yes, RBI and NABARD have approved banking with SHGs. RBI has classified loans to
SHGs as priority sector lending.

II. Who help to form SHGs?

A reasonably educated and helpful local person has to initially help the poor people to
form groups. He or She tells them about the benefits of thrift and advantages of forming
groups. This person is called as ‘animator’ or ‘facilitator’.
I. Any of the following persons can be a successful animator:
 Retired school teacher or a retired government servant, who is well known locally.
 A health worker/ a field officer/ staff of a development agency or department of the
State Government.
 YOU yourself! (The field officer or a staff member of a commercial bank/ regional
rural bank or a field staff from the local co-operative bank or society can also help the
poor in forming groups.)
 A field level functionary of an NGO.
 An unemployed educated local person, having an inclination to help others.
 A member/participant in the Vikas Volunteer Vahini (VVV) Programme of
NABARD.
 Woman animators can play more effective role in organizing women SHG’s.

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The animator cannot organize the groups all alone. He or she will need guidance, training,
reading material, etc.

II. Usually, one of the following agencies help:

 A voluntary agency or Non Government Organization (NGO).

 The development department of the State Government.
 The local branch of a bank.

III. What does the animator do?

 The animator talks to people in the village or at their homes.
 He or she explains the benefits of thrift and group formation.
 No promise of bank loan is given to anyone.
 He or she helps the group members to hold one or two initial meetings.
 The group finds a group leader, for holding meetings, keeping books, etc.
 The animator guides and encourages the leader and the group members.

III. Size of the SHG

 The ideal size of an SHG is 10 to 20 members.

(Advantage: 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 need not be registered.

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IV. Membership

i. From one family, only one person can become a member of an SHG.(More families
can join SHG’s this way.)
ii. The group normally consists of either only men or of only women. Mixed groups are
generally not preferred.
iii. Women’s groups are generally found to perform better. (They are better in savings
and they usually ensure proper use of loans.)
iv. Members should have the same social and financial background.(Advantage: This
makes it easier for the members to interact freely with each other. If members are both
from rich as well as poor class, the poor may hardly get an opportunity to express them.)
I. Some Common Factors for Membership in an SHG
 Women/men from very poor households.
 Those who depend on money lenders even for daily necessities.
 Those with a per capita income not exceeding Rs. 250 per month.
 Those having dry land holding not exceeding 2.5 acres.
II. Common living conditions for the Group Members

 Living in kutcha houses.

 Having no access to safe drinking water.

 Having no sanitary latrine.
 Those that have only one or no one employed in the family.
 Presence of illiterate adults in the family.
 Presence of an alcoholic or drug addict in the family or a member suffering permanently
from prolonged illness.
 Presence of children below five years in the family.
 Family eating two meals or less a day.
 Scheduled Caster or Scheduled Tribe families.
 If a family has at least four of the above 9 common living conditions, it can be considered
poor, and one member of that family can be encouraged to become a member of an SHG.
 (These are only examples. You can also use locally important conditions to decide
whether a family is poor.)

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V. Meetings

 The group should meet regularly. Ideally, the meetings should be weekly or at least
monthly. (Advantage: They become closer, if they meet regularly. This helps them to
understand each other’s difficulties better.)
 Compulsory attendance: Full attendance in all the group meetings will make it easy
for the SHG to stabilize and start working to the satisfaction of all.
 Membership register, minutes register etc., are to be kept up to date by the group by
making the entries regularly.(Advantage: This helps you to know about the SHG easily. It
also helps to build trust among the SHG members.)

VI. Keeping of Accounts by the SHG:

 Simple and clear books for all transactions to be maintained.
 If no member is able to maintain the books, the SHG may take outside help. (It has
been seen that a boy or girl from the village with some educational qualification does this
job enthusiastically. After some months, the group can even consider giving him or her a
small reward for this job.)
 Animator can also help.
 All registers and account books should be written during the course of the meeting.
(Advantage: This creates confidence in the minds of members who are unable to read and
write.)

What are the books kept by an SHG?

I. Minutes Book:
The proceedings of meetings, the rules of the group, names of the members etc. are
recorded in this book.

II. Savings and Loan Register:

Show the saving of member separately and of the group as a whole.
Details of individual loans, repayments, interest collected, balance, etc. are entered here.

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III. Weekly/ fortnightly/ Monthly Register:

 Summary of Receipts and payments.
 Updated in every meeting.
IV. Member’s passbooks:
Individual members’ pass books in which individual’s savings and loan balance
outstanding is regularly entered.

VII. Major Functions of an SHG

a.   Savings and Thrift:

    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. 

b.   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 to be kept by the SHG.

c.   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, the poor people are weak
and lack resources to solve their problems. When the group tries to help its members, it
becomes easier for them to face the difficulties and come up with solutions.

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d.   Taking bank loan:

The SHG takes loan from the bank gives it as loan to its members.(Details may be seen in
the next chapter.)
Soon after an SHG is formed and one or two meetings held where the savings are
collected, a savings bank account can be opened in the name of the SHG.

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CHALLENGES FACED BY THE ENTREPRENEURS

Challenges are faced by the entrepreneurs due to many reasons. Some of the challenges

faced by the entrepreneurs include-

 Intense competition from similar products, limited knowledge, production and quality

standards as well as low confidence.

 Lack of follow up and holding support (i.e. Capital, market linkages, technical

information and marketing techniques) after receiving Entrepreneurship development

training.

 A risk adverse mindset.

 Inadequate capital.

 Networking problem (i.e. with raw supplier to buyer of products)

 Low level of motivation and courage.

 Lack of support from male members (of the families) as well as banks

 Large magnitude of the target group of poor people.

 Attitudinal rigidities.

 Difficulty in creating awareness among people.

 Limited resources with the NGOs.

 Large requirements of training and sensitization of issues.

 Limited number of experienced intervention agencies.

 Diversities of situations due to wide coverage.

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OVERCOMING THE CHALLENGES

The challenges faced by the entrepreneurs can be overcome with the help of the following

measures-

 Creating the Importance of Entrepreneurship program and skills training, and MF and

support under single roof.

 Training programme operating in several states helped NGOS-MFIs provide their

microfinance clients different set of skills for successfully running enterprises.

 Provide micro credit for livelihood support and to micro enterprises development.

 Encouraging women entrepreneur to utilize the loans for productive purposes and have

the potential to become entrepreneur.

 Establishing a network of SHG to serve as a “self-help community” for micro enterprises

development activities.

 Social recognition of women leading an enterprise.

 Developing female mentors, trainers and advisors.

 Establishing sources of credit.

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OBJECTIVE OF THE STUDY

 To study the socio-economic background of respondents.

 To examine the Pre-SHG and Post-SHG status of SHG members.

 To study the impact of SHGs on the respondents.

 To study the benefits received by the respondents through various income generating

activities.

 To study the various problems faced by the SHG members in the study area.

SCOPE OF THE STUDY

 This piece of work will draw our attention towards the condition of women in today’s

society and the potential they possess to achieve wonders

 It’ll help to conclude how JJSBL is serving society through empowerment of weaker

sections

 Can be used in the “SWOT” analysis of “micro-financing” structure

RESEARCH METHODOLOGY

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Research methodology is a way to systematically solve the problem. It is a game plan

for conducting research. In this we describe various steps that are taken by the researcher.

“All progress is born of inquiry. Doubt is often better than overconfidence, for it leads to
inquiry and inquiry leads to invention.”

Research in a common parlance is a search for knowledge. Research is an art of

scientific and systematic investigation. Thus research comprises defining and redefining
problems, formulating hypothesis or suggested solutions; collecting, organizing and
evaluating data, making deductions and reaching conclusions.

Research methodology is the arrangement of condition for collection and analysis of

data in a manner that aims to combine relevance to the research purpose with economy in
procedure. Research Methodology is the conceptual structure within which research is
conducted. It constitutes the blueprint for the collection measurement and analysis of the
data.

Research methodology is a framework for the study and is used as a guide in

collecting and analyzing the data. It is a strategy specifying which approach will be used
for gathering and analyzing the data. it also includes time and cost budget since most
studies are done under these two constraints. The research methodology includes overall
research design, the sampling procedure, the data collection method and analysis
procedure.

TYPE OF RESEARCH USED:-

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 Descriptive Research

In the study descriptive research design has been used. As descriptive research design is
the description of state of affairs, as it exists at present. In this type of research the
researcher has no control over the variables; he can only report what has happened or
what is happening

Descriptive research designs are those design which are concerned with describing the
characteristics of particular individual or of the group. In descriptive and diagnostic study
the researcher must be able to define clearly what he wants to measure and must find
adequate method for measuring it.

METHOD OF DATA COLLECTION

After the research problem has been identified and selected the next step is to gather the
requisite data. While deciding about the method of data collection to be used for the
researcher should keep in mind two types of data i.e. primary and secondary.

Primary Data

The primary data are those, which are collected afresh and for the first time, and thus
happened to be original in character. We can obtain primary data either through
observation or through direct communication with respondent in one form or another or
through personal interview.

Methods used in primary data collection-

 Observation method
 Interview method
 Questionnaire method

Secondary Data

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The secondary data on the other hand, are those which have already been collected by
someone else and which have already been passed through the statistical processes. When
the researcher utilizes secondary data then he has to look into various sources from where
he can obtain them. For e.g. books, magazine, newspaper, internet, and reports.

In this study data have been taken from various secondary sources like:

 Internet
 Books
 Magazines
 Newspapers

PILOT STUDY / PRE TESTING THE QUESTIONNAIRE:

As soon as the topic was approved, the researcher has done an intensive study

The researcher has made a preliminary study among the top level executives. After having a
preliminary discussion with them, the researcher has proceeded further.

A questionnaire has been constructed by the researcher & tested with the executives.
Afterwards, the necessary changes have been made in the questionnaire.

Research design : Descriptive Research design

Sources of data : Primary data & Secondary data

Research instrument : Questionnaire, Websites, Manuals etc..,

Sampling area : Pragathi Krishna Bank

Sampling unit : Customers of bank

Sampling technique : Random or Probability Sampling

CHAPTER 3

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COMPANY PROFILE

Pragathi Krishna Grameena Bank is the sixth regional rural bank in Karnataka State.
The Krishna Grameena Bank is a regional rural bank established in terms of provisions of
Regional Rural Banks Act, 1976 and was sponsored by State Bank of India. The bank started
to function on 1st December, 1978 under the dynamic and able leadership of Shri Ashok
Kheni as its first chairman. Initially, the area of its operation was confined to Gulbarga
District only. Later on it was extended to the neighboring districts of Bidar and Yadgir also.
Now the bank is operating in Gulbarga, Bidar and Yadgir districts of Karnataka since 1st
December 1978.

“The Central Government has decided to merge the two Regional Rural Banks
(RRB’s) of North Karnataka viz., Krishna Grameena Bank and Pragati Grameena Bank with
headquarters at Bellary and the resultant bank is christened as Pragati Krishna Grameena
Bank (PKGB). The new bank has come into effect from August 23, 2013 sponsored by
Canara Bank. However, before the merger the KGB was entirely sponsored by the State Bank
of India. The command area of the new bank will be the combined operational area of the
erstwhile two RRBs viz., Bidar, Gulbarga, Yadgir, Raichur, Koppal, Bellary, Davangere,
Chitradurga, Shimoga, Kolar and Chic kballapur”.1

The Gulbarga, Bidar and Yadagir these three districts are known for their backwardness and
are also the lead districts of the sponsor bank. The position of the cooperatives is very weak
in Gulbarga and Yadagir districts and quite strong in Bidar district. “The total area covered
by these three districts is around 21637.471 Sq-kilometers spread over 15 Talukas and 2020
inhabited villages. The total population in the Bank’s command area is estimated 55.21 Lakhs
according to 2011 census. Gulbarga district is much bigger in size and also in terms of
population compared to Bidar and Yadagir districts.

The total area of Gulbarga district is 10954.97 Sq-Km, Bidar district 5448 Sq-Km,
and Yadgir district is 5234.50 Sq-km. The number of villages inhabited is 918 in Gulbarga,
621 villages in Bidar and 481 villages are in Yadgir district. While population of Gulbarga

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district, is 25.64 lakhs, it is 17 lakhs in Bidar and it is 12.57 lakhs in Yadgir district according
to 2011 census. There are 7 talukas in Gulbarga, 5 talukas in Bidar and 3 talukas in Yadgir
district”.2

The Krishna Grameena Bank selected these three districts on account of their extreme
backwardness and existence of large credit gaps. About 82% of total population in its
command area still resides in villages. At the time of opening this bank, these districts were
covered by DPAP and IRDP. Thought it is basically a dry area, hopes of people regarding
minor irrigation development has been raised by the Mullamari Project, Upper Krishna
Project and Amarja Project in Gulbarga districts and Karanja project in Bidar district.

The bank is operating in Gulbarga, Bidar and Yadgir districts of Karnataka State since
01.12.1978. The present branch network is 149 of which 114 branches are functioning in
rural areas, catering to the needs of farming community, rural artisans and other rural mass.
The main vision of KGB is to be the preferred banking institution of the people of this area,
committed to improve the living standards of the mass so as to achieve inclusive growth with
sustained viability.

Since inception, the bank is striving hard to achieve its set objectives in its area of operation.
The bank has now extended its coverage to all the urban and semi-urban centres in the three
districts.The main Head Office of KGB is located in Gulbarga. The Head Office building has
been equipped with centralized air conditioning, computerized functioning, solar lighting,
modern gadgets and a sprawling well maintained garden. The Head Office premises is
regarded as one of the best corporate office not only in Gulbarga City but also in the entire
Hyderabad-Karnataka Area. The bank enjoys the popularity as the peoples’ bank in this area.

Branch Expansion of Bank

The branch expansion policy of KGB aims at opening the branches at the unbanked
centers predominated by the target group of population comprising mainly the small and
marginal farmers. While selecting a centre for opening the branch, first of all survey of that

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area was conducted and the report submitted through NABARD to RBI for getting license.
The factors that are taken into account at the time of opening the branch include the extent of
credit needs met by the existing institutions, degree of credit gaps and number of target
groups of population. Potentiality of bankable schemes is also given weightage.

The major difficulty in opening a branch is the non-availability of good premises to

house the branch. The other difficulties are residential accommodation to the staff and
conveyance due to inadequate infrastructure. There is also competition from the offices of
commercial banks and cooperatives in certain pockets. Despite these constraints, KGB is
striving hard to fulfill its commitment of providing banking services at the door-steps of the
target group of rural population. A branch covers approximately a cluster of 10-12 villages
including thandas and other nearby hamlets.

The usual practice of bank is to conduct survey of nearby villages and collect
information as regards the population, number of households, major crops grown, number of
small and marginal farmers and agricultural labourers, electricity supply and conveyance
facility service provided by other agencies and above all potentiality of bankable schemes
immediately after the branch is opened. Initially, after the process of survey is over, a branch
adopts four to five villages for a year and concentrates its activity in those villages only. In
subsequent years, it covers the remaining villages. Since officials of the bank live in the
villages, they mingle with people and keep close rapport with them.

Mass meetings are conducted at the village level preferably during evening hours and
the various schemes of deposits and advances are explained to the villagers. Simplicity and
minimum documentation have been the peculiar features of the bank in granting loans and
advances. All these factors have contributed a lot to the popularity of the bank among the
rural masses. KGB has been building its image as a “small man’s bank”.

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The branch expansion policy of the bank is relevant to its objectives of reducing the
existent credit gap and to inculcate the habit of thrift among rural masses

1 Table-2.1: Branch Network of Krishna Grameena Bank

Category of Gulbarga Yadgir Bidar

Total
branches District District District
Urban 13 2 6 21
Semi-urban 6 4 4 14
Rural 53 27 34 114
Total 72 33 44 149

The bank was started to function with only one branch in 1978. At the end of March
2012, the number of branches opened reached to 149.

It is evident from the above table that the bank has 149 branches covering the entire
three districts. Of these 114 are rural branches, 14 semi- urban and 21 urban branches.
District wise particular shows that 72 branches are in Gulbarga district, 33 in yadgir district
and 44 in Bidar district. The main head office of the bank is situated in Gulbarga.

Organizational Structure of Bank

The Bank’s Head Office is located at Kushnoor Road, Gulbarga in its own building
with spacious accommodation for all administrative departments, board room, meeting hall,
computer lab and above all, customer’s lounge. The building is centrally air conditioned. The
bank is headed by a Chairman, a TEG Scale-VI Office on deputation from State Bank of
India. The General Manager is also on deputation from State Bank of India and is of the rank
of Assistant General Manager (AGM). The Manager (Audit & Vigilance) has responsibility
of audit and vigilance of all branches/ area offices and various departments at the head office.

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The other departments at Head Office headed by a manager are as

1. Personnel Department
2. Credit Management Department
3. Asset Management Department
4. Funds Management Department
5. General Banking Department
6. Computer Cell/ Information Technology Department
7. Computerization of head office, area office and branch offices.

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SWOT ANALYSIS

STRENGTHS

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1. A public sector undertaking. Thus, has government backing

2. Increasing profits over the years
3. Pan India presence with over 3400 branches
4. Founder of SWIFT (Society for Worldwide Inter Bank Financial Telecommunications)

5. Large employee base

WEAKNESSES

1.Brand valued not as big as SBI or BoB

2.The branches are not modernized in many cities as compared to leading banks

OPPORTUNITIES

1.Venturing into rural areas

2.Installtion of more ATMs

3.Use of mobile banking, internet banking on a large scale

THREATS

1.New banking licenses

2.Foreign players

3. Disinvestments

CHAPTER 4

DATA ANALYSIS AND INTERPREATION

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ORGANISING THE DATA

The data collected during data collection process are organized and presented in a
comprehensible sequence to make them more meaningful.

1. PRESENTATION OF DATA
After the data has been properly organized, it is ready for presentation. There are
different modes of presentation like tables, charts etc. The main objectives of
presentation are to put collected data into an easy readable form.

2. ANALYSIS OF DATA
After organizing and presenting the data, the researchers then have to proceed towards
conclusion by logical inferences. The raw data is then analyzed:

 By bringing raw data to measured data.

 Summarizing the data.

3. INTERPRETATION
Interpretation means to bring out meaning of data or to convert mere data into
information. From the analysis of data the various conclusions are find out on the
basis of logical inferences.

5. CLASSIFICATION OF DATA

If refers to the process of arranging data into homogenous classes. Subsequent to the
collection of data, the results were sorted out and arranged in different categories like
Graph, Table etc.

Analysis1- SHG statistics

Total number of SHG’s of JJSBL- 3800

Women members in those SHG’s- 60000

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Savings of these women till date- 80000000 rupees

Loan disbursement till date- 250000000 rupees

 Interpretation-

According to the statistics of JJSBL, they have a total of 3800 SHG’s all over the
states. 60% of these SHG’s are solely combined of women. Savings done by these women
since 2002 till present year comes up to Rs. 80000000. And on the other hand Jalgaon
janata has lent up to Rs.250000000 of loan to these women

In the financial year, the bank has successfully arranged approximately 110 training
sessions and women empowerment fairs.

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Analysis 2 - loan distribution

Sr. no Taluka name No. of groups Loan

disbursement
amount
1 Nandurbar 1 30000.00
2 Sawda 1 76000.00
3 Yawal 14 443500.00
4 Bodwad 22 906000.00
5 Chalisgaon 19 1278000.00
6 Jamner 11 1384000.00
7 Amalner 80 671500.00
8 Bhusawal 179 11056000.00
9 Jalgaon 250 181156300.00
Total 577 34001300.00

loan disbursement

1-nandurbar

1-sawda

14-yawal

22-bodwad

19-chalisgaon

11-jamner

80-amalner

179-bhusawal

250-jalgaon

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 Interpretation-

The above pie-chart depicts that out of the 3800 SHG’s of JJSBL all over Maharashtra,
Jalgaon alone consists 250 SHG’s followed by bhusawal, which has 179 SHG’s.
The other Talukas doesn’t have any impressive number of SHG compared to these cities.
This is mainly because of the rural background of these cities
One of the most obvious reasons of such fluctuations is that JJSBL’s head office is
situated in Jalgaon
Apart from Jalgaon and bhusawal, amalner also have 80 SHG’s.

Analysis 3- Activities carried out by Jalgaon SHG’s

Name of the activities percentage of the groups engaged

Papad-making 40%

Sewing 30%

Farming 20%

Bag-making 10%

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common activities by groups

papad making
sewing
farming
bag-making

Interpretation-

On the basis of the data from 5-6 most popular SHG samples, it was found that the
most common activity in which almost 40% of the groups engage themselves in, is papad
making.

30% of the women groups prefer “sewing” activities. And the rest of the percentage is
occupied by groups who are engaged in farming and bag making.

Apart from these many other SHG’s are also focusing on marketing their home-made
products in local hostels, hotels and schools.

Sr. no. Factors to be Very good Good Unsatisfactory

checked
1 Group size 15-20 10-15 Less than 10
2 Type of Only very poor 2 or 3 not very Many not very
members member poor members poor member
3 Number of 4 times in a 2 times in a Less than 2
member month month times in a month
4 Attendance More than 90% 70 to 90% Less than 70%
5 Participation of On a Very high Medium level Low level
members level
6 Savings 4 times 3 times Less than 3
collection within times
the group
7 Amount to be Fixed amount Varying amount
saved`

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8 interest on Depending upon 24 to 36% More than 36%

internal loan the purpose
9 Utilization of Fully used for Partly used for Poor utilization
savings by loaning the loaning
SHG’s members
10 Loan recoveries More than 90% 70% to 90% Less than 70%
11 Maintenance of All books are Most important Irregular in
books regularly registers are maintaining
maintained updated books
12 Accumulated More than Rs.3000-5000/- Less than 3000/-
savings 5000/-
13 Knowledge of Known to all Known to some not known to
the rule of SHG anyone
Analysis 4- Case studies

CASE STUDY 1

Name- Sharda Mahila Bachatgat

Area of operations- Rameshwar colony, eknath nagar, Jalgaon

Contact number- 8237509835

Established on- 26th July 2012

Account number- 11214, market yard branch

Number of members- 20

Savings- 200Rs per member

Monthly savings- 4000Rs/-

Age- 30 months

Total savings- 120000/-

Business engaged in- sewing

Bank loan- i. 100000Rs/-

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ii. 200000Rs/-

No. of Installments- 980

Interest rate- 14% per annum

24 months pay back agreement

Maintenance of books- simple journals maintained

 About-

The members of this group who are all specifically women, are found to be regular in their
operations and pay their monthly installments promptly

They also conduct their meetings on a timely basis. They have also borrowed loans twice in
the last 30 months which was professionally utilized for the purpose of-

1. Purchase of Sewing machine

2. Sewing Business expansion by purchasing more material and place to conduct
“stitching classes”

After the sewing machine was purchased 15 out of 20 women in the group grabbed the
opportunity by getting connected with local dealer and hiring him as their distributor.

 Interpretation-

Consists 20 members depicts impressive signs. Speaking about the financial background of
the member, 7 of them have a poor financial history. Loan is fully utilized for the purchase of
sewing machine. Each member saves up to 200 rupees pm gives a picture of punctuality.

Till date the accumulated savings are 120000Rs, apart from this the group has borrowed loan
twice in their time span. The interest charged by the bank is fixed at 14% pa.

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CASE STUDY 2

Name- sant muktai women’s group

Area of operations- mehrun, Jalgaon

Founded on-21st September 2007

Savings- 200 Rs per member

Monthly savings- 2000 Rs

Age- 88 months

No. of members- 20

Total savings- 140000/-

Account number- 8368

Contact number- 842109495

Business engaged in- i. Agriculture

ii. Sewing

Bank loan- 140000/-

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Interest rate- 14% per annum

Loan utilization- purchase of farming equipments

Maintenance of books- NIL

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About-

As it is seen here that the women are engaged in the business of agriculture primarily, one
can easily conclude that they are from a rural background and have not as much of
knowledge about banking and urban lifestyle.

Bank has being a rescuer for them and helped them by guiding the basics of banking
mechanism. Until now JJSBL has provided them loan for utmost 3 times during the past 7
years Out of which 80000 was fully employed for the purchase of agricultural equipments
which led to the development of their business venture

Being habitual in their banking operations and an old customer of the bank they have repaid
their loan successfully

Another business in which they’re engaged in is of sewing. So ultimately 7 women in the

group have expertise in manufacturing hand-made Tiffin bags

3 women in the group have being actively participating in the very popular programmes of
conducted by JJSBL. These ladies sing chants over there.

 Interpretation-

Rural and poor financial background, having an accumulated saving of 140000rs, this group
has managed to repay their loan of 140000rs at an interest of 14%pa. Loan was fully used for
the purchase of farming equipments. Each member contributes 200rs under their savings
account. On the other hand there is no maintenance of books with gives a hint of
dissatisfaction.

CASE STUDY 3

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Name- Gulab Mahila Bachatgat

Area of operation- mahajan nagar, Jalgaon

Contact number- 8793563579

Account number- 8914

Founded on- 23rd October 2009

Number of member- 10

Monthly savings- 2009-2012- 100 Rs per member

2012-present- 200 Rs per member

Total savings- 50000/-

Monthly savings- 2000

Age- 60 months

Bank loan-300000 Rs

Business engaged in- small business units (self-employed)

Interest rate- 14% pa

Maintenance of books- yes, simple registers

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 About-

This group is known for its zest and enthusiasm particularly in the repayment of their loans.
Their enthusiasm can also be seen in their daily lives. These women manage their household
work and have started personalized businesses on their own. Some of them give mehendi
tuitions.

Similarly they are highly sensitive in the matter of their timely meetings and conduct them
regularly. They also encourage other ladies to participate in their operations.

Until now, they’ve borrowed a sum of 300000 Rs in the last 5 years. Now they’re planning to
borrow 50000 Rs additionally for their home businesses

Moreover it was seen that after 4 years from their establishment these women have increased
their amount of monthly savings by 100 Rs per member. This implies that JJSBL has
encouraged their saving habits

All the 10 members have started their self-entrepreneurship. After talking to them it was
found that- JJSBL bank has helped them in ways like recovering their household expenses,
fees payment of their children, etc

 Interpretation

There are only 10 members, which illustrates a lack of majority qualities. Since the last 60
months of their association with JJSBL, this group has borrowed a loan of 300000rs. Interest
rate charged by the bank is 14%pa. Animator says that they are planning to borrow an
additional loan of 500000rs which will be fully utilized towards entrepreneurship. Monthly
saving of each member is just 200rs.

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CASE STUDY 4

Name- Aadishakti Mahila Bachatgat

Area of operations- mehrun, Jalgaon

Account number- 8754

Founded on- 12th November 2008

Number of member-10

Savings- 100 Rs per member

Monthly savings- 1000 Rs

Total savings- 74000

Age- 74 months

Business engaged in- “papad making”

Bag making

Farming

Bank loan- 100000 Rs

Interest rate- 14%pa

Maintenance of books – NIL

 About-

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This group consists of basically rural based women. That’s the reason why they’re not
familiar and much literate about the banking mechanism, but with the help of their other
group women and JJSBL’s support, they’ve learnt all the basic concepts of banking and
ultimately they’re exploring their talents.

They have started investing in recurring deposits and fixed deposits which help them in
doubling-up their invested money and encouraging group savings.

Their leader bought a “papad making machine”. Eventually they’ve established their own
papad making business unit. Some of them started their own ventures of “bag-making”
for Tiffin.

Being from rural background they are much familiar with farming activities, so their
farming activities and efforts have helped them to repay their loan amount

 Interpretation-

This group has borrowed a loan of 100000Rs so far, at an interest rate of 14%pa. Each
member contributes up to 100RS pm from their end. Utilization of bank loan was fully
towards their business shows some good indications of future expansions. Their
accumulated savings are 74000rs.Other than this there is no maintenance of books yet

CASE STUDY 5-

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Name- shri laxmi mahila bachatgat

Area of operation- saptshringi colony, Jalgaon

Contact number- 9373339731

Account number- 8922

Founded on- 29th January 2009

Number of member- 14

Savings- 200 Rs per member

Monthly savings- 2800 Rs

Total savings- 200000 Rs

Age- 72 months

Business engaged in- stitching clothes

“Papad making”

Bank loan- 100000 Rs

Repayment of bank loan- within 12 months

Interest rate- 14% pa

Maintenance of books- savings and loan register

 About-

The members of this group were illiterate on the first place, but their head person was
literate.
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Having an association with the bank has helped them to literate themselves in some
terms. At the start they didn’t even know about how to sign and used to give their thumb
print on documents. But now with help of JJSBL’s employees they have learnt how to
sign.

Another highlight about this group is that they started attending the free computer
workshops arranged by the bank. Surprisingly they started using computers at home and
everywhere. The bank loan of 100000 Rs which they borrowed in 2010 was sincerely
repaid after.

Utilization of the bank loan was fully towards the purchase of sewing machine. As we can
see the bank loan amount wasn’t enough to buy “papad making machines” so henceforth
they started making handmade papads.

 Interpretation

Bank loan of 1 lakh rupees has being effectively repaid by the bank. Savings of each
member is 200rs per month which help them to pay the interest of 14% pa on their loan.
Also their accumulated savings till date is 200000rs through which they lend internal
loans in their group members. Maintenance and recording of their monthly transactions is
also seen here.

CASE STUDY 6-

Name- Tejguru Mahila Bachatgat

Are of operation- Sai Prasad colony, Jalgaon

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Head member- sarla koli

Contact number- 8087998273

Account number- 10287

Established on- 26th October 2013

No. of members- 12

Savings- 200 Rs per member

Monthly savings- 2400 Rs

Age- 15 months

Total savings- 310000

Business engaged in- “papad making”

Bank loan- 100000 Rs

Interest rate- 14%pa

Participation of member- active participation in JJSBL’s events

Maintenance of books- monthly registers

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About-

Being a newly formed group, it has still managed to grow and show rational development.

This group is mainly engaged in the occupation of “papad making”. Unlike other groups
which are mentioned above, Tejguru Mahila group carries out the task in a very different
and profitable way by participating in various “fun-fairs” and sell their “papad’s” at
reasonable rates.

Bank has lent them a sum of rupees 1 lakh. When asked to the bank about their activities I
got to know that they regularly prepare the “nagli” flour dough for making “papad’s”.
These papad’s are then sold to hotels and other restaurants. Bank identified their
teamwork and marketing skills and supported them by giving them an opportunity to
setup “papad-stalls” in last year’s “Jalgaon janata fair”

According to the bank employees, they got a very tremendous response and they also
earned a whooping amount of “70000” in just 3 days of the fair. They are now eagerly
waiting for the next year’s fair of JJSBL

 Interpretation

Their monthly savings of 200rs per member has resulted in accumulated savings of
310000 rupees. Members are also actively taking part in group events, which helped them
to repay their 100000rs loan at an interest rate of 14% pa. They maintain books on regular
basis for recording their marketing operations.

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CHAPTER 5

FINDINGS, SUGGESTIONS & CONCLUSION

FINDINGS

1) JJSBL has established approximately 3800 SHG’s all over Maharashtra. They have lent
up to 250000000 rupees of loan to these SHG’s. 110 training sessions were arranged in
the last financial year towards the empowerment of these women
2) Analysis no. 2 gives us a picture that 3/4th of their loan share is being given to SHG’s in
Jalgaon areas, followed by bhusawal. Out of the total 3800 SHG’s of JJSBL, there are
nearly 250 SHG’s in Jalgaon and 179 SHG’s in bhusawal. Other Talukas don’t have
much of impressive statistics
3) With the help of analysis no. 3, we can conclude that 40% of the women prefer “papad-
making” activities & subsequently sewing, farming and bag-making is preferred by 30%,
20% and 10% of women respectively.
4) Findings through “case studies”
 Sharda Mahila SHG- JJSBL made a great and positive impact on their financial hardship
 Sant muktai SHG- no maintenance of accounting books
 Gulab Mahila SHG-saving habits of the woman were encouraged
 Adishakti Mahila SHG- learnt banking mechanism and got easy credit access
 Shri laxmi Mahila SHG- got benefited by learning computer basics in JJSBL seminars
 Tejguru Mahila SHG- got a huge market for their “papad making business”
5) JJSBL provides loan to such SHG’s at 14%pa interest rate which is quite reasonable for
both i.e., bank and SHG’s
6) There are more number of female oriented SHG’s than men SHG’s
7) NABARD doesn’t provide any subsidy to JJSBL.
8) Compared with other scheduled banks in Jalgaon district, this bank has managed to give
power to rural as well as urban women.

SUGGESTIONS
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This part will lay out some suggestions from my side to JJSBL as well as the SHG’s
women with whom I responded. The suggestions are as follows-

 Bank should decrease the interest rate at least by 1%-2%, so that there won’t be
any load on SHG’s member. Instead of charging higher interest rate, bank can
share a percentage of profit from SHG’s business operations
 Bank needs to keep a check on the amount they’re providing to SHG’s, due to
corruption and other loop-holes
 There should be regular maintenance of accounting books by the members
 There is a lack of “post-training formal follow-up”. JJSBL needs to assist the
women in making improvements in their working after they have completed their
theoretical training session
 There are high fluctuations and differences seen in “men, women &combined
SHG” and also “rural and urban SHG”. Bank should maintain a balance in them
 There should be rotation amongst SHS leadership
 Bank should partner with NGO’s and academic institutions to increase
innovations

CONCLUSION

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In my opinion, the outcomes demonstrate that JJSBL is making a positive impact on

the lives of the citizens in the state of Maharashtra who are particularly from weaker
sections. During the study I found out that the bank has been allowing and supporting
group formation, encouraging savings and monitoring the inter-loaning structure.

Finance is an element which everyone needs. Regular and immediate finance can play
an important role for development of socio-economic conditions of the people
particularly the rural poor.

Microfinance is expected to play a significant role in poverty alleviation and rural

development particularly the rural women. The potential for growing micro finance
institutions in India is very high. Major cross-section can have been benefited if this
sector will grow in its fastest pace.

From the analysis of data it can be concluded that numbers of members have started
savings only after joining the groups while majority of the members have no savings in
the pre-SHG era. After joining the groups most of the members solved their problems
alone

BIBLIOGRAPHY

Following are the sources through which I gathered data

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 www.jjsbl.com
 www.google.com
 https://www.nabard.org/
 Annual Report – Jalgaon Janata Sahakari Bank Limited -2013-14
 V.J.R. Emerlson Moses, "Women empowerment through SHGs : A micro study",
International Referred Research Journal, Vol. II, Issue 16, January 2011
 News articles published by “Divya Marathi” relevant to JJSBL
 www.scribd.com
 Economic survey of Maharashtra “2012-13” conducted by “directorate of
economic and statistics, planning department, govt. of Maharashtra, Mumbai

QUESTIONNAIRE

Section A :
____________________________________
Name of the group :
_______

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____________________________________
Address of the group: 
_______

Membership composition and number of members :

_____

_____

_____

Month and year of group formation/Age of the group :  ________________

Funds available with the group as on date of this evaluation :
Source  Amount

Members’ savings(monthly + total) ___________

Interest on loans ___________

Bank interest ___________

TOTAL ==========
   B : Essential criteria that the group must fulfill
Score ‘1’ if point is fulfilled and ‘0’ if not. There are no scores in-between.
These criteria must be essentially present in every group; Even if one is not present, it
means the group requires focused attention for some more time.
1. The group is meeting regularly without being asked or reminded.

Comments :
______________________________________ Score : _______
_

2. There is at least 80% attendance at any given meeting.

Comments :
______________________________________ Score : _______
_

3. Loans are available to all members and not just the same few.

Comments :
______________________________________ Score : _______
_

4. There is a regular rotation of leadership and responsibility-sharing.

Comments :
______________________________________ Score : _______
_

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5. Regular savings are made by all members.

Comments :
______________________________________ Score : _______
_

6. The group’s documents and books of accounts are well-maintained, without any
assistance from JJSBL.

Comments :
______________________________________ Score : _______
_

7. The total Common Fund in the group (minus borrowed capital) amounts to at least
Rs.1,000/- per member.

Comments :
______________________________________ Score : _______
_

8. At least 50% of the group members (or their families) possess a regular source of
income.

Comments :
______________________________________ Score : _______
_

9. The group is in contact with other institutions for technical and/or financial resource
mobilization.

Comments :
______________________________________ Score : _______
_
SectionC :
Optional criteria that the group may fulfil
Score ‘1’ if point is fulfilled and ‘0’ if not. There are no scores in-between.
These criteria are optional; they need not be considered in deciding whether to withdraw
from a group unless the evaluator has some specific concern in mind.
1. The group has at least one trained promoter and access to the services of other trained
promoters (e.g., in accounts, health and etc.)

Comments :
______________________________________ Score : _______
_

2. The group has an adequate place to meet where all are allowed to enter.

Comments : Score : _______

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______________________________________
_

3. The group is successfully managing at least one Group Income Generating Programme.

Comments :
______________________________________ Score : _______
_

4. The group has successfully conducted literacy, numeracy, and functional education

classes for its members.

Comments :
______________________________________ Score : _______
_

5. The group is involved in promoting some social and cultural activities among its
members and the community.
 

Comments :
______________________________________ Score : _______
_

6. The group has made at least one effort to promote social justice and/or prevent the
exploitation of its own members by others.

Comments :
______________________________________ Score : _______
_

Section D : Other critical points

This section has YES/NO responses. Negative responses have to be given serious
consideration in deciding whether to phase out of the group.
1. Does the group have any liabilities against JJSBL?
Comments :
Yes : ____  No : ____
_________________________
2. Has the group undergone the full training syllabus with minimum 80% attendance in each
session?
Comments :
Yes : ____  No : ____
_________________________
3. Is the group following its rules and regulations properly, with sanction and control
mechanisms?

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Comments :
Yes : ____  No : ____
_________________________
4. Is the group following collective decision-making processes?
Comments :
Yes : ____  No : ____
_________________________
5. Does the group have a clear vision and plans for the future?
Comments :
Yes : ____  No : ____
_________________________
Section E: 
Summing Up
1. Essential criteria:
Maximum points obtainable: 12
Minimum points obtainable: 0
POINTS OBTAINED BY THIS GROUP:
2. Optional criteria:
Maximum points obtainable: 8
Minimum points obtainable: 0
POINTS OBTAINED BY THIS GROUP:
3. Evaluator’s main observations: ________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
4. Evaluator’s recommendations regarding phasing out by JJSBL :
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
________________________________ ___________________________ 
Date of evaluation Signature of Evaluator

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