Status of MICRO FINANCE in NER

(Source : Agenda Note RBI, 2006)

Cumulative position of SHG finance as on March 31, 2005

State

(Amount in Rs. Lakh)

Average lending Groups
(in Rs.)

Cumulative number of credit linked SHGs

Cumulative total amount of loan sanctioned to SHGs

Assam

49237

19729.42

40070

Arunachal Pradesh

229

58.01

25330

Manipur

1885

457.33

24260

Meghalaya

1315

475.62

36170

Mizoram

251

188.61

75140

Nagaland

442

259.97

58820

Tripura

6921

2797.07

40410

Total of NER

60280

23966.03

39750

  • Banks’ performance under micro finance has been good in Assam and Tripura, while it has been poor in other States in the region. However, the highest amount per group was lent in Mizoram.

  • The poor performance was attributed to sparse population in Arunachal Pradesh, lacked of experienced NGOs for formation and nurturing of SHGs and lack of homogeneity in Groups in the respective States.

  • The local institutions like Marup in Manipur, Village Development Boards (VDBs) in Nagaland, Village Darbar in Meghalaya and Kebang in Arunachal Pradesh could be activated to further the SHG movement in the respective State.

  • SHG movement in Assam has cadred momentum during the last two years. So far, 49237 SHGs has been credit linked to the extent of Rs. 197.29 crore as on March 31, 2005 . The RRBS particularly Pragjyotish Gaonlia bank has been playing a lead role in the SHG movement. Presently, 47 Self Help Promoting Institutions (SHPIs) including 5 RRBs and 11 Farmers’ Clubs were involved im the SHG-Bank linkaged programme in the State. During 2004-05, the joint liability Group (JLG) concept was introduced to all the 5 RRBs in the State and 98 JLGs had been financed to the tune of Rs. 53.22 lakh by three RRBs (Subansiri Gaonlia Bank, Pragjyotish Gaonlia Bank and Langpi Dehangi Rural Bank).

  • In the district of West Tripura, each Gram Panchayat was to form one SHG in a month and 12 SHGs in a year under SGSY. The SHG movement received such equally enthusiastic response from other district also and some Panchayat exceeded the target. It is expected that all the villages in the State will have around 20,000 new SHGs by the end of the year. As per reports, 4000 SHGs have already passed first gradation stage, 10,000 were eligible for such tests and 16000 had passed second gradation. The Bharat Gyan Vigyan Samiti, Tripura micro study, found that while group formation had a significant impact on social indicators and led to accumulation of handsome savings by SHGs, the impact on poverty alleviation was minimal, since SHGs concentrated more on thrift and credit activities in first few months and economic activities are taken up only later after Group stabilization. As reported, the subsidy was adjusted and no matching was sanctioned by some banks.

  • Rashtriya Gramin Vikas Nidhi (RGVN), a leading NGO based in Guwahati is pursuing micro activities through Credit and Savings Programme (CSP) with its focus on oppressed class of people and women of the society. The CSP had started with 46 villages spread over three districts in the State of Assam and has now expanded to more than 500 villages spreading over seven districts in the State. The CSP has also embarked on a Joint Liability Group delivery model in clusters comprising 5 to 6 individual borrowers in each cluster. This has resulted in good recovery climate. In addition, the NGO has also taken up Entrepreneurship Development Loans (EDLs) to help the Entrepreneurs undertake economic activities.

  • North Eastern Region Community Resource Management Project (NERCRMP) is a joint project of NC and International Fund for Agriculture Development (IFAD) operational in three States, viz., Assam, Meghalaya and Manipur since 1999 and is likely to continue upto 2008. Its outreach is to 862 villages and 39203 families. It is functioning through 993 NRMGs and 2443 SHGs in six districts in Meghalaya , Assam and Manipur. The project involves community members including the poorest and women. The total savings of the SHGs stand at Rs. 1.30 crore.

  • The NERCRMP have established linkage of 377 SHGs with banks for Rs. 86.27 lakhs. Repayments have been close to 100 per cent. The grading of SHGs is being conducted based on NABARD’s format of grading. It also has promoted SHG Federations catering between 15 to 40 SHGS.

The State wise performance of Commercial Banks having a major presence in the region under microfinance as on September 30, 2005 is as under:

(Amount in Rs. Lakh)

State

Cumulative number of Credit linked SHGs

Cumulative total amount of loan sanctioned to SHGs

Cumulative total amount of loans disbursed to SHGs

Assam

19264

11848

11830

Manipur

784

470

470

Nagaland

509

311

303

Arunachal Pradesh

582

184

184

Meghalaya

1958

785

785

Mizoram

189

157

157

Tripura

1022

601

601

Total

24308

14356

143330

Source: Monitoring Group data

Self Help Group movement can be an effective method for credit dispensation as the SHG model has been quite successful in many parts of the country. The State Governments and NABARD can play a more proactive role in this area by identifying various NGOs/MFIs, organizing training programmes for capacity building, etc.