Extract from State Focus Paper for Meghalaya 2006–07

prepared by NABARD, Regional Office, Shillong

NGO Profile

Although there are a large number of NGOs in the State, the number of NGOs working in the areas of Self Help Group formation, training for income generation and conduct of Rural Entrepreneurship Development Programme etc are very few in number.  Profiles of some of the major NGOs, which have been supported by NABARD, are given below:  

a.     Women for Integrated Sustainable Empowerment (WISE)

The Agency was established in the year 2000.  The Agency is engaged in charity and relief work for economic and development of the poor with special focus on women and children.  The NGO has its Head Office at Shillong.  Major activities of WISE are promotion of Self Help Groups, Conduct of skill-oriented programmes for women and conduct of REDPs.  The agency has so far provided training to over 1000 persons.  In collaboration with Catholic Relief Association, WISE has taken initiatives in three villages in East Khasi Hills District. The NGO is also closely associated in the implementation of SGSY.  

b.     NAMRHEN Association

The Agency was registered in the year 1999.  The agency has its operation covering Jaintia Hills District.  The major activities of the NGO  are conduct of REDPs; Self help Groups promotion, conduct of awareness programmes etc.  

c.     Bosco Reach Out (BRO)

Bosco Reach Out is the Social Development Wing of Selesian of Don Bosco in North India .  It is one of the largest NGOs operating in North East Region.  They have promoted over 3000 SHGs in North Eastern Region.  The Agency has set up a Regional Rural Training Centre at Umran which has been providing short term and long term courses on various agriculture and allied activities to farmers, Self Help Groups and NGOs.  The Agency has also been active in child development and women empowerment.  They are also collaborating with IFAD and DRDA in West Garo Hills , Ri Bhoi and Jaintia Hills districts.   The Agency has been identified by NABARD for implementation of Tribal Development Fund Project in Ri Bhoi District.

d.     Don Bosco Technical School

Don Bosco Technical School conducts REDPs, organise workshops, fairs, exhibitions apart from running a technical school in Shillong. It is one of the Organisations identified by Govt. of Meghalaya for conducting technical training programmes for the youth.  

e.     Bethany Society

Bethany Society was established in the year 1981.  The NGO has their Headquarter in Tura, West Garo Hills district.  The main objectives of the Agency are to provide support to disabled persons, rehabilitation of the poor, organize training programmes and create sustainable livelihood for rural poor. The Agency is also actively involved in promotion of Permaculture.  

f.     FMA-Outreach

FMA-Outreach is the development wing of the FMA of Shillong province run by Selesian sisters. The Agency was set up in the Year  2000.  The Agency is actively involved in empowerment of tribal women through SHG formation and conduct REDPs for self-employment.  The have set a target of assisting 4000 women below poverty line through various programmes.  

g.     Farmers Clubs

Farmers club programme was launched by NABARD in 1982.  The main functions of Farmers clubs are

  1. to spread the message of development through credit

  2. assist in technology transfer and capacity building of farmers 

  3. propagation of repayment ethics

  4. help the process of village development by preparation of village development plan

  5. develop better banker borrowers relationship  and

  6. bring about socio economic development of the village.  

In Meghalaya as on 31 March 2005 there are only 21 Farmers clubs.  Out of these only nine clubs are active.  For the year 2005-06 State level Bankers’ Committee has allotted a target of formation of 30 clubs.  NABARD has organized sensitization programme for banks on Farmers clubs.  Banks may chalk out an Action Plan for formation of more Farmers clubs in the State.

h.     Indian Council for Agriculture Research

In order to have adequate research back up for agricultural development in the North Eastern Hill Region of the country, the Indian Council for Agriculture Research established the first major agricultural research institute for the region known as ICAR Research Complex for North Eastern Region in the year 1975.  The Headquarter of the Institute is located in Meghalaya (Umiam).  The basic objective of the set up is to generate location specific technologies for different agroclimatic zones of the region.  The Institute has also set up a Potato Research Station and six Krishi Vigyan Kendras in Meghalaya.             

i.     North Eastern Region Community Resource Management Project for Upland Areas  

The North Eastern Region Community Resource Management Project for Upland Areas (NERCRMP) is a joint initiative of the Government of India (GOI) and the International Fund for Agricultural Development (IFAD).  The overall objective of the project is to improve the livelihood of vulnerable groups in a sustainable manner through improved management of their resource base in a way that contributes to protecting and restoring the environment.

The project targets about 1,000 villages and 42,000 households. The project is operational in the States of Assam, Manipur and Meghalaya.  In Meghalaya West Khasi Hills and West Garo Hills are covered.  The specific objectives of the project are:

  • Formation and linkage of SHGs.  

  • To enhance the capabilities of local people to manage new technologies and institutions at the village level.  

  • To increase income through the development of sustainable farming systems and the development of non-farm enterprises.  

  • To make people more aware of the need to preserve and regenerate natural resources, particularly forests and biodiversity.  

  • To establish effective and appropriate delivery systems for inputs (credit, extension, etc) and for the maintenance of assets and resources.                                 

  • To increase the participation of women in local institutions and in decision-making processes within the community.  

  • To enhance savings capacity and establish the habit of thrift.  

  • To increase access to basic services and infrastructure facilities.  

j.     Meghalaya Rural Development Society

The International Fund for Agriculture Development (IFAD)is  implementing jointly with the Government of India, “The Livelihoods Improvement Project for the Himalayas ” in the States of Meghalaya and Uttaranchal.  In Meghalaya, the Government is implementing the Project through the Meghalaya Rural Development Society (MRDS).  The project objective is to improve the livelihood of vulnerable groups in a sustainable manner through the promotion of improved livelihood opportunities and strengthening of local institutions that relate to livelihood development.  Specific objectives are to :  

  1. Promote a more sensitive approach to the design and implementation of development interventions,  

  2. Enhance the capabilities of local people to select appropriate livelihood opportunities, access required financial resources, manage new technologies and institutions at the village level.  

  3. Increase incomes through more sustainable income generating cultivation systems and the establishment of non-farm enterprises at the micro and small scale level, and  

  4. Establish effective and appropriate delivery systems for inputs and for the maintenance of assets and resources, with emphasis on microfinance, savings and thrift, and micro insurance products, along with access to business development services that will link household based livelihood activities with the larger economy.  

As per the Appraisal Report a tentative list of 9 blocks have been selected for the first two years of project implementation and an additional 5 blocks will be selected in the 3rd year.  The end of the project would cover an estimated 570 villages.  During the first 2 years, villages will be selected from the following blocks.

Sl. No

Name of the District

Name of Block

1

East Khasi Hills

(1)Shella-Bholaganj

2

South Garo Hills

(1)Gasuapara

3

East Garo Hills

(1)Rusubelpara, (2) Songsak (3) Samanda

4

Jaintia Hills

(1)Laskein,(2)Khliehriat,(3)Saipung

5

Ri Bhoi

(1)Jirang

k.     Joint Liability Groups – Means to Better Access to Credit

Absence of adequate security sometimes creates a major hurdle for small and marginal farmers and other poor section people in securing loans.  The inability to provide collateral often excludes them from the purview of credit.  Keeping this in view a pilot project on financing Joint Liability Groups (JLGs) was initiated by NABARD for developing effective credit products for mid segment clients, which reduce risk and transaction costs for the bank and also introduce a greater degree of flexibility for the credit user to determine credit needs and parameters.  Joint Liability Group will be an assembly of 5-10 member clients (new or existing) informally recognized by bank as a Group.  A group serves as collective guarantor for loans extended to individual members. Although there is good scope, Banks in the State are yet to finance JLGs.  

Micro-finance  - Union Budget has proposed to enhance the annual target of credit linkage to 2.5 lakh SHGs during 2005-06. NABARD and banks have set a target of linking additional 5.85 lakh SHGs to banks by end-March 2007. In order to give further fillip to micro-finance movement, the following measures have been initiated:

  • Non-governmental organisations (NGOs) engaged in micro-finance activities, have been enabled to access ECBs upto US $ 5 million during a financial year for permitted end-use, under automatic route, as an additional channel of resource mobilisation.         

  • Modalities for allowing banks to adopt the agency model by using the infrastructure of civil society organisations, rural kiosks and village knowledge centres for providing credit support to rural and farm sectors and appointment of micro-finance institutions (MFIs) as banking correspondents being worked out.  

Micro-finance - The Micro Finance Development Fund (MFDF) set up in the NABARD re-designated as the Microfinance Development and Equity Fund (MFDEF) and its corpus increased from Rs.100 crore to Rs.200 crore.

The Internal Group (Chairman: Shri H.R. Khan) constituted by the Reserve Bank to examine issues relating to rural credit and micro-finance submitted its report in July 2005. Important recommendations of the Group include providing comprehensive financial services in rural areas encompassing savings, credit, remittance, insurance and pension products and establishing linkages between banks and external entities based on two broad models viz., business facilitator model and business correspondent model. The recommendations of the Group are under examination.

Micro Finance

Micro Finance Development and Equity Fund - The Micro Finance Development Fund (MFDF) re-designated as the Microfinance Development and Equity Fund (MFDEF) and its corpus increased from Rs.100 crore to Rs.200 crore                      

Farmers' Club - Revised policy guidelines issued in respect of "Farmers' Club" programme to make it sustainable and more vibrant.                      

Increase in refinance quantum - Quantum of NABARD refinance increased from 80% to 100% of bank loan provided to MFIs at the interest rate of 6 % with the stipulation that interest charged by banks from mFIs not to exceed 9 % p.a.                       

Increase in grant assistance - The maximum grant assistance to NGOs for promotion and nurturing of groups enhanced from Rs. 2000 to Rs.3000 per SHG, to be released over a period of three years instead of two years. The maximum grant assistance to RRBs and Co-operatives for promotion and nurturing of groups enhanced from Rs. 1000 to Rs. 1500 per SHG. The incentives for Individual Rural Volunteers (IRVs) revised from Rs.700 to Rs. 1200 per SHG.                      

Rating of mFIs - A new scheme introduced for one year for financial assistance to banks for rating of mFIs. NABARD to bear 75% of the rating charges by CRISIL and the concerned mFI to bear the balance 25%.  

SUPPORT FOR GOVERNMENT SPONSORED PROGRAMMES

The salient features of credit linked subsidy schemes being implemented are given below:  

1.     Capital Investment Subsidy Scheme (CISS) for Construction, Modernisation and Expansion of Cold Storages and Storages for Horticultural produce  

Considering the importance of reducing post harvest losses, the Government of India had introduced the scheme in 1999 for implementation through NABARD/National Horticulture Board.  The Scheme intends creation of new 12 lakh tones and renovation of 8 lakh tones of cold storage capacity. The rate of subsidy is 33.33% of the project cost with maximum of Rs.60 lakh per project.  

2.     Capital Investment Subsidy Scheme for Construction/Renovation of Rural Godown  

Although our country is self sufficient in food grain production, lack of scientific storage facilities very often leads to distress sale by farmers.  In order to provide farm community with scientific storage facilities, Government of India had formulated the Captioned Scheme.  Directorate of Marketing and Inspection,Dept. of Agriculture & Co-operation,Ministry of Agriculture, NABARD and National Co-operative Development Corporation (NCDC) are the implementing agencies.   The scheme also aims at creation of new 32 lakh tones capacity and renovation of 4 lakh tones of rural storage capacity.  The maximum and minimum capacity ranging from 25 MT to 10000 MT.  The subsidy pattern for NE States is 1/3 of the project cost or Rs.50 lakh whichever is less.  

3.     Back ended Credit Linked Subsidy Scheme for Promotion of Tree Borne Oilseeds

The tree borne oilseeds can be grown and established in the wastelands and varied agro-climatic conditions and have immense domestic and industrial utility such as in agriculture, cosmetics,pharmaceutical, bio-diesel, substitute to cocoa butter, etc.  The estimated requirement of jatropha/honge oil, as a source of bio-diesel for 20% blending with HSD, alone is expected to 13.8 MMT by the year 2011-12 in the country.    

Therefore, with a view to promoting the commercial cultivation of these tree species as also to provide forward and backward linkages for promotion of the TBOs, the Govt. of India has launched the Back ended Credit Linked Subsidy Scheme for promotion of Tree Borne Oilseeds (TBOs).  

The scheme is implemented through National Oilseeds and Vegetable Oil Development (NOVOD) Board, under the Ministry of Agriculture, Govt. of India.  Under the scheme the eligible activities are establishment of seed procurement centers, installation of multipurpose pre-processing and processing facilities, installation of oil expeller and nursery raising and commercial plantation.  The scheme provides 30% back ended subsidy.  100% refinance eligible to the banks from NABARD.  

4.     Centrally Sponsored Rainwater Harvesting Scheme for SC/ST farmers 

Recognising the need to create additional water bodies through harvesting of rainwater, for irrigation and other alternative uses, such as recharging of ground water, fish culture, stopping wasteful flow of rain water etc, the concept of rain water harvesting structures has been evolved.  In order to support the SC/ST farmers to create such water bodies, the Government of India has announced a special scheme in the Union Budget namely, Rain Water Harvesting Scheme for SC/ST farmers for achieving the accelerated growth of irrigation potential, thus improving the per capita income of these farmers in the country.  All the States and Union Territories are covered under the scheme.  

It is proposed to set up one-lakh rain water structures during the remaining X Five Year Plan (2004-05 to 2006-07).  50% of he refinance will be provided from Government of India which will be through NABARD.  There is no down payment or margin money under the scheme.  All individual SC/ST farmers will be eligible under the scheme.  

5.     Central Sector Plan Scheme “Dairy/Poultry Venture – Capital Fund”

Nearly 70% of milk production in India is contributed by the small rural producers scattered all over the country and the milk continues to be marketed by the unorganized sector.  The main problem in the unorganized sector is quality, which creates serious threat to the health of consumers.  Hence, a need has been felt to bring about structural changes in the unorganized sector by   providing facilities to process the milk at village level and market pasteurized milk in a cost effective manner. 

Quality upgradation to handle the milk on a commercial scale using modern equipments and management skills is also warranted in the dairy sector.  

Similarly inspite of well-developed Poultry Sector in the country, a considerable segment in the sector is still unorganized and the spread is uneven and scattered.  Training and marketing continue to be the weakest links in the facet of various poultry development programmes.  Due to these limitations, poultry development particularly in the North Eastern States is still at a very primitive stage.  Even though the productivity of the layer farmers is comparable with those in advanced countries, we are unable to become competitive in the global market due to qualitative and quantitative considerations.  

In order to bring in a planned development aimed at exports as also to give a fillip to the unorganized sectors in the dairy and poultry development, the Department of Animal Husbandry, Ministry of Agriculture, Govt. of India is  implementing the”Central Sector Plan Scheme Dairy and Poultry Venture Capital Fund”, to provide technical and financial assistance.  The assistance will be provided to the rural beneficiaries through bankable projects.  

Under the scheme the entrepreneurs contribution will be 10% and 40% is bank loan.  The remaining 50% is provided as interest free loan.  In respect of bank loan 50% of the interest will be provided as subsidy.  

6.     Capital Investment Subsidy Scheme for Commercial Production Units of Organic Inputs under “National Project on Organic Farming” 

In order to arrest deterioration of soil health due to increasing and indiscriminate use of synthetic fertilizers/pesticides, emphasis is being given world-over to promote organic farming which is the holistic production management system, based on basic principle of minimizing the use of external inputs, avoiding the use of synthetic fertilizers and pesticides.  In the context of the global thrust on organic farming practices and environmental safety, it is imperative to augment the production of quality organic inputs to meet the growing demand of plant nutrients in the country.  Accordingly, Capital Investment Subsidy Scheme for Commercial Production units for Organic Inputs under “National project on Organic farming” has been introduced by the Government of India for implementing during Tenth Five Year Plan period, with effect from 15.02.2005.

Biogas fuel, Bio fertilizers, Vermiculture hatcheries, Fruit & Vegetable waste compost unit are eligible for assistance under the scheme.  The subsidy of 25% is provided under the scheme.  The margin money and term loan are 25% and 50% respectively.  The subsidy is released by NABARD to the eligible banks.

7.     Scheme for Development/Strengthening of Agricultural Marketing Infrastructure, grading and Standardization

India has made rapid strides in food grain production as also in fruits and vegetables production.  However, the lack of adequate post harvest management and marketing facilities have resulted in glut in the market and consequent distress sale as also heavy post harvest losses to the tune of 25-30%.  National Agricultural Policy, inter-alia emphasized the need for development of a whole gamut of agricultural marketing operations, including strengthening of the infrastructure, techniques for preservation, storage etc.  In this backdrop, the Expert Committee on strengthening and developing of agriculture marketing and the Inter-Ministerial Task Force constituted by the Government of India, made a number of recommendations not only for improving the existing regulated agricultural marketing network but also to promote a parallel marketing network in the private and co-operative sector.  Accordingly, the Ministry of Agriculture and Co-operation, Government of India, has launched a credit-linked back ended subsidy “Scheme for development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization” to improve the existing regulated agricultural marketing network as also to promote marketing network in the private and cooperative sector.  

Infrastructure for collection/assembling, drying, cleaning, grading, standardization, sanitary & phytosanitary (SPS)measures and quality certification, labeling, packing, ripening chambers, retailing and wholesaling, value addition facilities(without changing the production form), etc, excluding transport facilities, Market user common facilities like shops/offices, platforms for loading/unloading/assembling and auctioning of produce, parking sheds, internal roads, garbage disposal arrangements, boundary walls, drinking water, sanitation arrangements, weighing and mechanical handling equipments, etc. are eligible for assistance.  

CHAPTER – VIII-B

Micro Credit

Since NABARD’s debut in micro Finance a decade and half ago, it has been catalyzing the banking system in the country to join hands progressively with informal delivery channels to give SHG-Bank Linkage the necessary momentum.  During 2004-05, this has resulted in 5,39,365 new SHGs being credit linked with mainstream banks thus registering a 49% growth over the previous year increasing the cumulative number of SHGs credit linked with banks to 16,18,456.  The active participation of women (90%), and timely loan repayment (95%) continue to be prominent features of the programme.  The year witnessed an all round growth in the SHG-Bank Linkage programme in many States. Proactive measures such as enlisting partnerships, capacity building of partner agencies, etc., served to expand the programme.  The programme thus enabled an estimated 24.3 million poor households in the country gain access to micro Finance from the formal banking system.  

NABARD has been instrumental in facilitating the formation and nurturing of SHGs, involving all possible partners in the arena.  Realizing the task involved to be process oriented, NABARD has cautiously involved voluntary agencies, bankers, socially spirited individuals, other formal and informal entities and also government functionaries to promote and nurture such groups.  The focus was on building capacities of the partners and providing assistance in meeting the incremental costs of nurturing of SHGs. Bank also extended extensive support for arranging and conducting awareness creation and capacity building programmes for the SHG members in association with identified resource NGOs.   

The programme of linking Self Help groups (SHGs) with the banking system has emerged as a major finance programme in the country.  Accordingly, the Union Budget for 2005-06 proposed to enhance the annual target of credit linkage to 2.5 lakh SHGs during 2005-06 from 2 lakh SHGs.   

Micro Credit in Meghalaya

The micro credit initiatives have taken place in the State with the involvement of NGOs both under Government sponsored schemes and outside.  Most of the larger NGOs in the State have a good track record and are involved in formation of SHGs.  These NGOs are basically church-based and had been undertaking social activities  (literacy, health, sanitation etc.)  and have, in the last couple of years, also involved themselves in promoting Self Help Groups.  There are many areas in the State where due to absence of good working NGO, SHG linkage has been very poor.  

The SHG programme had a slow start but has gradually picked up and as on date there are around 3954 SHGs promoted under SGSY as also 2564 SHGs outside government sponsored programmes.  

The important NGOs which are engaged in promotion, nurturing and upscaling of Self Help Groups in the State are Bosco Reach Out,  Women for Integrated Sustainable Empowerment (WISE), FMA-Outreach for Underprivileged Women and Children (FMA-OUWC),  New Rompa Mebit Club.  A good number of SHGs are also promoted under the North Eastern Region Community Resource Management Project supported by IFAD.  In addition Department of Horticulture and Department of Soil Conservation of State Government are also promoting Self Help Groups.  The DRDA is arranging  training to their staff through SIRD, Umiam. 

Cumulative Finance to SHGs since inception  (Rs. in lakh)

Name of the Agency

No. of SHGs provided with bank loan since inception
(as on 31.12.2005)

Cumulative amount of finance to SHGs since inception
 (as on 31.12.2205)

Commercial Banks

264

79.42

Regional Rural Banks

67

10.00

Co-operative Banks

27

11.42

Total

358

100.84

AGENCY-WISE  SHGs  PROMOTION

There are about fifteen NGOs actively participating in Self Help Group promotion. The total number of SHGs promoted by these agencies stood at 1695 groups.  The DRDA has promoted about 3954 groups with the help of various agencies under SGSY. The agency-wise district-wise position of promotion of SHGs in the State is given below :  

Name of the Agency

             Name of the District

E.K. Hills

W.K.
Hills

Ri Bhoi

Jaintia Hills

W.G. Hills

E.G. Hills

S.G. Hills

Total

1. Women for Integrated Sustainable Empowerment

77

-

-

-

-

-

-

77

2.  Seng Samla Diskiangpunsior New Mawbuit

-

39

-

-

-

-

-

39

3.  St. Michael’s Mission Home

-

-

-

-

29

-

-

29

4. Charisma Holistic Restoration in Society Transformation (CHRIST)

5

-

-

-

-

-

-

5

5.  BAKDIL - Diocesan Social Service Soceity

-

-

-

-

78

6

42

126

6. Society for Micro Economy Development Activities (SoFMEDA)

15

-

6

-

-

-

-

21

7.   Ringrer Market Welfare Committee

-

-

-

-

5

-

-

5

8.  Western Cultural & Socio Welfare Asociation

-

31

-

-

-

-

-

31

9.  FMA-Outreach for Underprivileged Women and Children (FMA-OUWC)

20

53

-

7

8

-

-

88

10.  New Rompa Mebit Club

-

-

-

-

76

-

-

76

11.  Nangroi Hynneiwtreb Organisation

11

-

-

-

-

-

-

11

12.  Namrhen Association

30

-

-

16

-

-

-

14

13.  IFAD Project

-

312

-

-

435

-

-

747

14.  Bosco Reach Out

132

81

405

424

147

70

-

551

15.  Kner Shaki Mission Organisation

4

-

-

-

-

-

-

-

16.  C & RD -DRDA - 31.03.05

438

632

196

358

1186

859

285

3954

Grand Total

732

1148

607

805

1964

935

327

6518

Inspite of a good number of SHGs promoted and saving linked with formal institutions, credit linkage is very poor. This may be due to lack of awareness among the members of SHGs regarding the benefits of credit from the formal credit institutions.