Performance and Impact of Self-Help Groups in Punjab - Past Experiences and the Roadmap Ahead

The present study was conducted to study the growth, performance and impact of SHGs in Punjab. The study was carried out in Hoshiarpur district of Punjab by taking a sample of 30 SHGs and out of these two members were selected from each group thus making the total sample size 60. The SHGs in Punjab were formed by NABARD sponsored SHG-Bank linkage programme and Swaranjyanti Gram Swarozgar Yojna (SGSY) implemented by District Rural Development Agency (DRDA) in Punjab. The number of groups up to March 2006 under SHG bank linkage programme were 4,561 while under SGSY there were 4,108 groups. Majority of the groups were contributing Rs 50 or 100 per member monthly and large proportion of groups had up to 15 members in the group. Commercial banks were the largest funding agency and they were giving loans to the groups at the interest rate of 7-12% per annum. All members had started saving in the post-SHG situation. After joining the SHG, the average income of the member households increased to Rs.54,474 from Rs.30,962, average value of assets became Rs.34,302 from Rs.20,345 and average borrowing increased to Rs.27,665 from Rs.8,999 in the Pre-SHG situation. The problems faced by SHGs included harassment/repeated visits during opening of bank account, marketing problems, lack of training and competition from MNCs. To increase the network of SHGs in Punjab, there is need for increase the margins available to NGOs, identification of economically viable activities according to the availability of raw material and demand of products in the area, increase in the amount of loan to the groups at lower interest rates and the facility to members to sell their products in exhibitions or during Kisan Melas as they provide a good market for such products, which otherwise have a low demand.