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IMPACT OF MICROFINANCE THROUGH SELF HELP GROUP BANK LINKAGE PROGRAMME – A STUDY IN NALGONDA DISTRICT OF ANDHRA PRADESH

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Title IMPACT OF MICROFINANCE THROUGH SELF HELP GROUP BANK LINKAGE PROGRAMME – A STUDY IN NALGONDA DISTRICT OF ANDHRA PRADESH
 
Creator LAVANYA, S
 
Contributor VIJAYA KUMARI, R
 
Subject IMPACT,MICROFINANCE, THROUGH, SELF, HELP, GROUP, BANK, LINKAGE, PROGRAMME, STUDY, NALGONDA, DISTRICT, ANDHRA PRADESH
 
Description The present study entitled ‘‘Impact of Microfinance through Self Help Group
Bank Linkage Programme – A study in Nalgonda District of Andhra Pradesh’’ was
undertaken mainly to study the performance of microfinance, to assess the socioeconomic
impact, to examine the repayment pattern of loans by the member
households under the SHG bank linkage programme, to review the over dues
management strategies adopted by the member households and bankers and to
analyse the opinions of SHG member households and bankers on microfinance
through SBLP. The study covered two mandals, 8 SHGs and 80 member households.
The data pertained to 1998-99 (pre-SHG period) and 2008-09 (post-SHG period),
which were collected through survey method, with the help of specially designed
schedule. The analytical tools employed in the study were simple tabular analysis,
mean, standard deviation, multiple linear regression analysis, Garrett ranking, Gini
concentration ratio and coefficient of variation.
The SHG-Bank Linkage Programme in the state grew rapidly from 1999-
2000 and registered remarkable progress by 2008-09. In 2001-02, 1.17 lakh SHGs
were credit linked while their number increased to 5 lakhs in 2008-09. The number
of SHGs which are credit linked to banks in Nalgonda district have increased from
12,172 in the year 2004-05 to 24,375 in the year 2008-09 and the bank loan has
increased from Rs.4,800 lakhs to Rs.21,181.91 lakhs. Total savings of the SHGs in
the state was Rs.1962.50 crore and average savings per SHG was Rs.23,070 in the
year 2009. The total savings of the SHGs in the district was Rs.15,425 lakhs, while
the average savings per SHG was Rs.30,000.
Homogeneity in terms of standard of living constituted the major factor
(75%) for group formation. The average amount borrowed per annum for first,
second, third and fourth times was Rs.26,250, Rs.48,125, Rs.90,625, Rs.1,61,250
respectively. Among the eight selected SHGs three SHGs borrowed an average
amount of Rs.2,50,000 for the fifth time and only one SHG borrowed for the sixth
time Rs.4,00,000. All the eight groups were found to save monthly, the amount
varying from Rs.60 to Rs.100.
The regression estimates of income due to SHG indicated significant impact
of microfinance on SHG member households in terms of contributing a major share
to the gross income of the member households.
The maximum number (76.25%) of households borrowed for taking up of
various income generation activities. Among different income generating activities
under taken by the SHG members, about 36 per cent of the incremental income
generated was from non-farm activities followed by farm sector activities (34%) and
off-farm activities (27%).
The major proportion of the sample SHG members (52.5%) were in the age
group of 36-45 years. About 25 per cent of the members were illiterate, 38.75 per
cent of the sample members could only sign, 27.5 per cent of the members had
studied up to 5th standard, 7.5 per cent of them studied up to secondary level and
interestingly one person (1.25%) had studied up to the degree level. The proportion
of members belonging to backward caste accounted for 62.5 per cent followed by SC
/ ST at 25 per cent and remaining 12.5 per cent were from forward castes.
Major share of 43.75 per cent of the member households were involved in
activities other than agriculture, followed by marginal and small farmers (25%),
agricultural labourers (3.75%) and medium farmers (2.5%). The average value of
assets registered an increase of about 81.25 per cent of the sample households. The
intervention of SHG has resulted in a shift in the saving amount to higher levels.
On an average, the loan amount received by the members during post-SHG
situation worked out to Rs.43250, which was about 789 per cent more than the pre-
SHG situation (Rs.4860).
Since the Lorenz curve of the member households in the post-SHG period lie
above that in the pre-SHG period, has clearly indicated that the net income in the
post-SHG period was more equitably distributed than that in the pre-SHG period, and
even the lower Gini concentration ratio indicated that the net income was more
evenly distributed in the member households during post-SHG period. The micro
finance approach also brought out a significant improvement in social conditions of
the members.
All the 8 groups were regular in repaying loan amount. The recovery
percentage among sample households from all the sources was 91.23 per cent in
post-SHG situation
The opinion survey conducted regarding the over dues management strategies
adopted by the members and bankers revealed that majority of the member
households about 76.25 per cent were involved in various types of income generation
activities which would yield them additional income along with the regular income
which in turn facilitated them to repay the loan amount regularly without any over
dues. Majority of the bankers (87.5%) revealed that before granting the loan they
verified the savings pattern and enquired about the purpose of loan so that there
would be no over dues in the future. The opinion of SBLP members on microfinance
indicated that the major problems faced by them were inadequacy of loan amounts,
absence of activity oriented training etc. Majority of the members (92%) felt
satisfactory with the rate of interest i.e., 12% rate of interest, as it is very low
compared to the loans from other non-institutional agencies.
About 62 per cent of the bankers in the study area opined that firstly they
have a problem of inadequacy of staff members willing to work in the rural areas,
insufficient time in transacting the loans and approaching the targets. Secondly they
have incurred high costs in identification of weaker sections and promotion of Self
Help Groups. Finally they expressed major difficulty in monitoring and follow-up of
SHGs. Some of the bankers (82%) opined that it was not a difficult task for granting
loans to SHGs as they were prompt in repaying the loans sanctioned to them without
any over dues.
Though the performance of SHGs was outstanding, there were certain areas
which need to be improved. There was a lack of initiative in sharing the
responsibilities of the leaders, when required. Therefore, it has to be ensured that
leadership rotation or election of leaders is strictly to be practiced for future
sustainability of the group. The study observed that a large number of SHGs have
already been promoted. Therefore, presently all efforts should be concentrated on
nurturing and strengthening of existing groups. There is a need for documentation, an
effective Management Information System (MIS) and build up of database on SHGs
at the district level.
 
Date 2016-08-05T10:26:16Z
2016-08-05T10:26:16Z
2010
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/70993
 
Language en
 
Relation D8570;
 
Format application/pdf
 
Publisher ACHARYA N.G. RANGA AGRICULTURAL UNIVERSITY RAJENDRANAGAR, HYDERABAD