Professional Documents
Culture Documents
Bachelor of Commerce
Submitted by
ASHNA ANIL KUMAR
AM.AR.U3COM12018
KAVY SANTHOSH
AM.AR.U3COM12038
RESHMA.S
AM.AR.U3COM12074
Under the guidance of
DR. T G MANOHARAN
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DR. T G MANOHARAN
Lecturer,
Amrita Vishwa Vidyapeetham,
Amritapuri campus,
Kollam,
This is to certify that the report entitled SHG-BANK LINKAGE PROGRAM
(MICROFINANCE) IN POVERTY ALLEVIATION WITH SPECIAL REFERANCE TO
ALLAPUZHA DISTRICT has been prepared by Ms. Ashna Anil Kumar, Kavya
Santhosh and Reshma S under my supervision and guidance, for the
fulfillment of Bachelor of Commerce. There field work is satisfactory.
Date:
Signature of the Mentor
2 | Page
DECLARATION
We hereby declare that this project work entitled SHG-BAN KLINKAGE PROGRAM
(MICROFINANCE) IN POVERTY ALLEVIATION WITH SPECIAL REFERANCE TO
ALLAPUZHA DISTRICT submitted by us for the partial fulfillment of the requirement for the
award of Bachelor of Commerce (B Com), is a record of our own research work under the
guidance of Project Mentor (DR T G MANOHARAN, Department of Commerce And
Management). We certify that the project is our own work and has not been submitted earlier for
the award of any degree or diploma to any Institute or University.
PLACE: Amritapuri
NAME/ROLL NO:
ASHNA ANIL KUMAR (18)
KAVYA SANTHOSH (38)
RESHMA.S (74)
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ACKNOWLEDGEDGEMENT
First and foremost, We would like to thank "MATA AMRITANADAMAYIDEVI" our beloved
AMMA, who has been guiding light for successful completion of this project.
We express my heartfelt sense of gratitude to DR. PREMA, HOD Amrita Vishwa Vidyapeetham
University School of Arts and Science, Amritapuri allowing us to do this study with all support.
It is our privilege to work on the project " SHG-BANKLINKAGE PROGRAM
(MICROFINANCE) IN POVERTY ALLEVIATION WITH SPECIAL REFERANCE TO
ALLAPUZHA DISTRICT."
We also thank DR. T G MANOHARAN who has been a sources of inspiration through their
constant guidance, personal interest, encouragement and help. In spite of their busy schedule
they have always found time to guide us through the project. We are also grateful to reposing
confidence in my abilities and giving us the freedom to work on our project.
We also take this opportunity to thank all my family and friends who has been the source of
inspiration throughout the project
We are highly indebted and thankful to our respondents.
Last but not least, we also thank the OMNIPOTENT ALMIGHTY for giving us the strength and
ability in the smooth and steady conducted of this project.
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TABLE OF CONTENTS
SL.NO
chapter
Contents
Page no
Certificate of mentor
Declaration
Acknowledgment
List of tables
List of figures
6
7
Abstract
Introduction
11-17
1.1
12
1.2
Review of Literature
14
10
1.3
15
11
1.4
16
12
1.5
Research Methodology
16
13
1.6
17
14
1.7
Chapterisation
17
15
19-36
16
2.1
20
18
2.2
Industry profile
24
19
Theoretical Perspective
36-37
20
38-70
21
Findings
71-74
22
75-76
23
Conclusion
77-78
24
Bibliography
79
25
Appendix
80-84
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LIST OF TABLES
TABLE
TABLE TITLE
PAGE NO:
NO:
4.1
4.2
43
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
39
40
41
42
43
44
45
46
47
48
48
49
50
51
52
53
54
55
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.26
4.27
4.28
your group?
Does banks provide loan for SHG?
Are your group an account holder in the bank?
Have you taken a loan?
Mostly for what purpose loan is taken?
Rate of interest is to be given to the loan?
Is Bank loan amount adequate to SHG?
How much loan you have taken from the bank?
Installment period to repay loan to the bank?
Status of repayment
Is there any delay in sanctioning of loan by
56
57
57
57
58
59
59
59
60
61
4.29
banks?
Did you face any difficulties at the time of 61
4.30
4.31
4.32
4.33
getting loan?
Does SHG provide personal loans?
How much amount did SHG provides?
Rate of interest
Installment period to repay loan?
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62
62
63
63
4.34
4.35
4.36
Status of repayment
64
For which purpose, you utilize the loan amount? 65
Is credit facilities are improved after joining 65
4.37
4.38
SHG?
If improved, what are the sources of credit?
66
What is the attitude of your family while you 66
4.39
4.40
4.41
4.42
Group?
GENERAL ENQUIRY
68-70
LIST OF FIGURES
TABLE NO:
Table 4.3
Table 4.4
Table 4.5
Table 4.6
Table 4.7
Table 4.8
Table 4.9
Table 4.16
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TABLE TITLE
CASTE CATEGORY
EDUCATION QULIFICATION
OCCUPATION
MONTHLY INCOME
MONTHLY EXPENDITURE
MARITAL STATUS
FAMILY PARTICULARS
WHO MOTIVATED YOU TO JOIN SHG
PAGE NO:
41
42
43
44
45
46
47
53
Table 4.17
54
Table 4.22
PURPOSE OF LOAN
57
59
Table 4.25
Table 4.33
Table 4.39
SATISFACTORY
GROUP
LEVEL
ON
FUNCTIONING
64
OF
67
Executive Summary
A nations financial status reflects the living status of its citizen. The nation is
considered financially secured, once the people living in it attain a better
living environment. Upliftment in each citizens life style contributes to the
upliftment of the nation itself.
Several Micro Finance Institutions (MFIs) have been experimenting and trying
to develop financial products, to address the diverse needs of liquidity,
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security and financial returns for the poor, and have succeeded to an extent.
One method of access to micro finance by Alappuzha district, rural women in
particular, is the Self Help Group-Bank linkage programme, where banks
provide finance to the groups for undertaking economic activities. But before
the financial products are developed for the poor, it is useful to understand
the fund flow and expenditure patterns so that issues pertaining to savings
and credit can be addressed. The present study derived on a representative
sample, within Alappuzha District. The objective of this study is to
understand the financial flows of the rural poor and facilitate the process by
which
financial
institutions
can
design
community
driven
women
empowerment strategy and financial products that would help rural poor.
A considerable rise in the living standard of the people after joining SHG
takes the concept of such groups to a better level. The suffering or the poor
enjoys the freedom of equality in the society with the idea of SHG, which to a
better extend, helped in increasing the capability of the poor financially and
act as united. Every small step taken towards the upliftment of poor makes
the nation grow higher and as a result the nations financial stability reaches
greater heights.
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CHAPTER-1
INTRODUCTION
1.1 INTRODUCTION
Microfinance is a general term to describe financial services to low-income individuals or to
those who do not have access to typical banking services.
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Microfinance is also the idea that low-income individuals are capable of lifting themselves out of
poverty if given access to financial services. While some studies indicate that microfinance can
play a role in the battle against poverty, it is also recognized that is not always the appropriate
method, and that it should never be seen as the only tool for ending poverty
Self Help Groups (SHGs) are becoming one of the important means for the empowerment of
poor women in almost all the developing countries including India. Kerala is no exception as
regards the role played by women's collectives, known by different names for emancipation and
empowerment of poor women. The NGOs who are in the field of socio-economic development
of the marginalised sections in the society since last four to five decades, had initially organised
Credit Unions and Mahila Samajams for better participation of people in development initiatives
and also for thrift and credit facilities. Since the emergence of SHG system, as per the initiatives
of National Bank for Agriculture and Rural Development (NABARD), and directives from
Reserve Bank of India (RBI), from the beginning of 1990s, most of these Mahila Samajams and
Credit Unions have been converted into SHGs, linked them to financial institutions for better
credit facilities. In Kerala, since the middle of 1990s, the State Government also took initiatives
in organizing the urban poor women into Neighbourhood Groups (NHGs). These NHGs are
recognized as SHGs by NABARD, as far as SHG-Bank linkage and credit facilities are
concerned.
Kudumbasree is a Programme under the Poverty Eradication Mission (PEM) of Government of
Kerala, which came into existence since 1997. The PEM is a Government Organised NonGovernmental Organization (GONGO), directly supervised by the Local Administration
Department of the Government of Kerala. The concept of Kudumbasree programme is conceived
as a poverty eradication strategy and at the same time as a programme implemented both in
rural as well as in urban areas.
In the constitution and functioning of SHGs, there is a wide variation observed among the SHGs
of NGOs and between the SHGs of Kudumbasree and NGOs. Regarding membership,
attendance and other regulations, SHGs of Kudumbashree have fixed rules and regulations
whereas the SHGs of NGOs do not have any hard and fast rule in this regard. The designations of
office bearers differ between SHGs of NGOs. The number of Executive Committee Members
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also varied depending upon the total strength of the group. SHGs of Kudumbasree follow the
bye-laws of CDS in selecting its executive members and the office bearers are elected in a
democratic way of voting. In the selection of beneficiaries for providing loan, the SHGs follow
certain criteria. Interest rate to be charged and the number of installments for repayment and
dealing with defaulter of repayment in time were left to the SHG. The most common rate of
interest charged by the SHGs was Rs. 1 per Rs. 100 per month, i.e.0.01% interest.
Neighbours, friends, other members of SHGs, officials of Kudumbasree
and animators of NGOs were the agents who motivated the respondents to join in the SHGs. For
majority (75 %) of the respondents the motivating factor for joining the SHGs was economic
reason, which includes inculcating savings-habit and getting easy loan at a reduced rate of
interest. Interaction with other women in their area; cooperation among members, acquiring
knowledge, skills and a desire to work for the development of the community etc. are the social
motives influenced about 19% of the respondents.
There were dropouts reported from both the SHGs of NGOs and
Kudumbasree. Usually the dropout starts after 6 to 12 months. Comparatively dropout rate was
found less in Kudumbasree SHGs than from the SHGs of NGOs. Regarding the information
about thrift saving and loan repayment, there was no significant difference between members of
SHGs of NGOs and Kudumbasree. However, different NGOs follow different strategy for thrift
savings. Some fix an amount, which is agreed upon by majority of the groups under them, while
others leave the matter to the SHGs to fix up the amount. And, the Kudumbasree seem to have
advised its SHGs to fix up some norms for thrift savings. In the case of SHG-bank linkage, there
was significant difference between Kudumbasree and NGOs. All the SHGs selected from NIDS
and Mithranikethan were not linked to recognized banks/financial institutions since these two
NGOs had their own systems where the thrift savings were deposited. All the SHGs of
Kudumbasree were linked to Banks within two years.
Regarding conflict management, only 6 % of the respondents agreed about
subgroups in their SHG system and it was found in SHGs of NGOs as well as in Kudumbasree
groups. Most of the problems emerged due to financial dealing and autonomy of the leaders.
(micro credit guideline 2013-2014)
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M.Venkata Ramanaiah,, C. Mangala GowriA, In recent times the term Microfinance (MF)
became a buzz word in the every corner of the world as well as in the formulation of welfare
programs by government. After hearing success stories in microfinance across the developing
countries, particularly Bangladesh, third world nations started to give more importance to MFs.
Since, banks have failed to reach the poorest of the poor of the countries population;
microfinance emerged as a potential tool to fill the gap betwee1n financial institutions and needy
people. Ethiopia, as a least developed country (LDC), needs huge financial recourses for rapid
and sustainable development and reduce gap between haves and have-nots. Though we are in
21st century where science and technology plays a vital role in the pace of development, many
countries across the Africa suffered from hunger, ill health, mass poverty and illiteracy. To curb
all these awful conditions, there is a need of massive financial recourses. Private Banks and
Government sector banks have many limitations in this concern. Mainly, these banks have high
profit motives and they used to put many restrictions to sanctions loans to the poor. In this
juncture, Microfinance is said to be an effective instrument discovered in 21st century to mitigate
rural poverty in the world. Microfinance helps the poor to come out from many wicked
problems. The beauty of the MF is in safeguarding a variety of interests of its members. In this
13 | P a g e
paper an earnest attempt is made to review of the need of Micro Financial Institutions (MFIs),
the role of MFIs in alleviation of poverty in the country and how woman can get assistance from
these institutions with a special reference to ACSI.
Dr. Padmaja Manoharan, Dr. Rameshwari Ramachandra, Dr.R. Nirmala Devi, Predatory lending
consists of those credit practices that taking advantage of the borrowers lack of financial literacy
exploits customers through high cost credit. People may be victim of predatory lending because
lacking alternative financial options; this is when being rationed by the formal financial market.
However, the underlying premise is a weak credit law. Despite some advances in consumer
protection law, predatory lending has not been regulated in Mexico being not even defined in the
law.
with the objectives of research study, the method of defining the problem, the type of data
collected and the method used for collecting and analyzing data.
a)
o
o
b)
o
a)
b)
c)
Research design The research design adopted in this study is descriptive research, because the
research is on the basis of survey for analyzing the problem.
Research approach
The research approach adopted in this study is survey approach.
Research instrument
The main instrument used for this study is a well structured questionnaire.
Data source
Both primary and secondary data are collected for conducting the study.
Primary data
Using questionnaires
Interaction with the SHG members
Secondary data
Internet
Sampling
Sample unit
The sample unit is the members of the SHG
Sampling area
Sampling area is restricted to ALLAPUZHA district.
Sample size
The sample consists of 100 SHG members in ALLAPUZHA district.
The data given by some of the respondents relating to the financial aspects may affect the result,
1.6 CHAPTERISATION
The project report is partitioned into seven chapters .they
Chapter 1: Introduction
Introduction to the study, Literature Review, Statement of the problem , Objectives of the Study,
Scope of the study , Research Methodology , Limitations of the study.
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CHAPTER-2
PROFILE OF THE STUDY
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most of these Mahila Samajams and Credit Unions have been converted into SHGs, linked them
to financial institutions for better credit facilities.
Self Help Groups were organized under the initiatives of the National Bank for Agriculture and
Rural Development [NABARD] and the directions of the Reserve Bank of India. Promoted by
the governments as well as non-governmental organizations, it is group of rural poor, particularly
women, who have volunteered to organize themselves into a group for eradication of poverty of
the members through collective internal savings and access to external credit. Access to external
credit is achieved through SHG-bank linkage, based on group solidarity instead of formal
collateral
Under the SHG-bank linkage programme, each self-help group is linked with a bank a rural,
co-operative or commercial bank where the group account is maintained. Over time the bank
begins to lend to the group as a unit, without collateral, relying on self-monitoring and peerpressure within the group for repayment of these loans.
These linkages were designed not just as a strategy for poverty alleviation through financial
empowerment, as was earlier pointed out. It was designed to be a vehicle by which rural women
could achieve social, personal and political empowerment as well. Improvements in confidence
levels, independence, mobility, decision-making capability and increased acceptance within the
family were considered to be pointers towards personal empowerment. It was also anticipated
that the rural women could accomplish social empowerment through micro finance, epitomized
by improvements in organizational, interactive and public speaking skills, group cohesiveness,
increased awareness on rights, social problems, increased acceptance in the society and
participation in social activities. Rural women can successfully empower themselves against
social evils like alcoholism, domestic violence, abuse and exploitation, gender bias and social
exclusion.
The poverty eradication mission of state of Kerala is a community based self help initiative
involving poor women. It has envisaged as an approach to poverty alleviation focusing primarily
on micro-finance and micro enterprise development, and integrally linked to local self
government institution .National Bank of agricultural and Rural Development (NABARD)
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initiated womens Self Help Groups (SHGs) in India with support of Non Governmental
Organization (NGOs).
(http://en.wikipedia.org/)
2.1 HISTORY OF MICROFINANCE
The history of microfinancing can be traced back as long to the middle of the
1800s when the theorist Lysander Spooner was writing over the benefits
from small credits to entrepreneurs and farmers as a way getting the people
out of poverty. But it was at the end of World War II with the Marshall plan
the concept had an big impact.
The today use of the expression microfinancing has it roots in the 1970s
when organizations, such as Grameen Bank of Bangladesh with the
microfinance pioneer Mohammad Yunus, where starting and shaping the
modern industry of microfinancing. Another pioneer in this sector is Akhtar
Hameed Khan. At that time a new wave of microfinance initiatives introduced
many new innovations into the sector. Many pioneering enterprises began
experimenting with loaning to the underserved people. The main reason why
microfinance is dated to the 1970s is that the programs could show that
people can be relied on to repay their loans and that its possible to provide
financial services to poor people through marketbased enterprises without
subsidy. Shorebank was the first microfinance and community development
bank founded 1974 in Chicago
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that
have
sprung
up
around
the
world.
Every single individual on earth has both the potential and the right to live a
decent life. Across cultures and civilizations, Yunus and Grameen Bank have
shown that even the poorest of the poor can work to bring about their own
development.
Micro-credit has proved to be an important liberating force in societies where
women in particular have to struggle against repressive social and economic
conditions. Economic growth and political democracy can not achieve their
full potential unless the female half of humanity participates on an equal
22 | P a g e
footing
with
the
male.
Yunuss long-term vision is to eliminate poverty in the world. That vision can
not be realised by means of micro-credit alone. But Muhammad Yunus and
Grameen Bank have shown that, in the continuing efforts to achieve it,
micro-credit must play a major part.
(http://en.wikipedia.org/)
Through
microfinancing
small
loans
are
produced
and
accessible.
Microfinancing is based on the philosophy that even small amounts of credit can help end the
cycle of poverty. Another benefit produced from the microfinancing initiative is that it presents
opportunities, such as extending education and jobs. Families receiving microfinancing are less
likely to pull their children out of school for economic reasons. As well, in relation to
employment, people are more likely to open small businesses that will aid the creation of new
jobs. Overall, the benefits outline that the microfinancing initiative is set out to improve the
standard of living amongst impoverished communities
In order to ensure that Micro Credit Financing serves the objectives for which it is
implemented, rigorous criteria of selecting self-help groups for giving them credit for onward
lending to individual members, are absolutely essential.
The following guidelines are hereby issued for selecting the self-help groups for the purpose of
giving them credit for Micro Credit Financing activity.
a. The group should have been formed at least one year back i.e; it should completed one year from
the date of its formation.
b. The group should have been conducting regular meetings and maintain the records of its
proceedings. It is difficult to enforce a strict time frame for defining regularity but in general, a
meeting once every four months or earlier will be considered as meeting regularly conducted.
c. The group members should have been doing regular savings. The regularity of savings is to be
judged with respect to time-frame and not to the amount of savings. Every member individually
and group collectively, should have been saving the amount every month. On an average, each
member should have been saving minimum Rs.30/-per month with an overall variation of 10%.
d. The group must have made efforts for collective decision making in its meeting and it can be
judged by the record of proceeding maintained by the group.
e. The group should have a maintained its accounts in a simple and transparent manner. It should be
ensured that the groups accounts are maintained by one of its members alone and not by an
outsider/Accountant etc.
f. If the group has already taken up lending activity, the repayment should be minimum 80% as per
the repayment schedule.
g. The group should have been preferably registered under any of the existing laws or rules for the
purpose or it should have articles of association defining its activities.
h. The group leadership have been elected by the members either through a process of democratic
election or through a process of consensus i.e., it should not be forced leadership.
i. The members of the group including its leaders should not have active political affiliation.
j. The group normally should not exceed twenty members and should not be less than ten
members.
k. The group must have an operating account in any of the Bank branches for transacting all their
financial transactions, which could be either savings or borrowings or payments.
l. The group should not have used its savings for commercial borrowings to any non-member
since its formation.
m. The group should be carrying out only socio economic activities for the welfare of its own
members or for community as a whole and in no way should be taking part in any other activity.
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n. The existing groups which fulfill the above criteria shall also be eligible for Micro Credit
assistance.
o. The groups having members below the poverty line should be given preference for extending
assistance under Micro Credit and only after the groups below the poverty line (BPL) are
exhausted, the groups below double the poverty line will be eligible for assistance.
people. In view of the above position, the non-governmental organizations are also channelized
to implement the Micro Credit Financing for backward classes/minorities in the state in the sense
that self-help groups will provide them funds for extending Micro Credit to poor people.
(Micro credit guideline 2013-2014)
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WOMEN IN KERALA:
Kerala is a state with several achievements in the social development of women and in the
balance of gender status has stabilized in many fronts.
Kerala has a high female literary rate of 86.2%, a low Infant Mortality Rate(IMR) of 13(against
the national average of 80) a favorable sex ratio of 1032 female/1000male,low Maternal
mortality Rate (MMR) 0.8/1000 and a high life expectancy of 74 female/70male.However the
absence of women in the public domain remains as a paradox of the Kerala model of
development.
The economic marginalization of women in the development process has drown considerable
attention during recent years while the female work participation rate in India increased from
19.7% to 22.7% between 1981 and 1991, in Kerala the ratio declined from 16.6% to
15.9%.During the same period the incidence of unemployment among females in the state is
higher than that among males by 5 times in rural areas and 3 times in urban areas.
prevalent.
The marginalization of women in the economic process and lack of control over resources have
through SHGs. The decision making process was looked into from two angles, namely within the
family and in the group. This study looked into the change that has happened in the decision
making process within the family after the respondents became the member of SHGs. There was
a visible change that has occurred in the level of participation of women in the decision making
process within the family. As far as health care and decision on menu the change was found more
among members of NGOs, while regarding the education of children respondents from
Kudumbasree experienced greater change. Together with participation in decisionmaking another
important aspect was the freedom of women as far as mobility was concerned. Remarkable
change has happened regarding mobility of women - including women going out for attending
meeting, classes, seminars, training programme, and various other functions of the SHG investment and credit utilization were concerned.
Development of a nation cannot be separated form or viewed in
isolation from the development of women who constitute half of the world population and who
can certainly play a critical role in influencing the course of human history as well as shaping the
destiny of mankind. Unfortunately in every society gender continues to be a power full barrier in
asserting the rights, capabilities and opportunities of women throughout life. Many of the legal
provisions for equality are confined to paper. Our country is noted for its cultural heritage,
respect for traditional values and honour for women, but is still largely male dominated where
women are miserably looked down up on.
No doubt women do have their inherent weaknesses due to the dual
responsibility both at home and their work place. But the lots of creativity in her work which is
an innate trait of women and the inborn talents and potentials with in her are unorganized and
unutilized in a patriarchal society. Their lower status in society makes them easier victims of
poverty as they do not have due control over resources neither as owner nor as user. Besides the
upbringing of women in shadow in fear and violence hinder their natural growth and convert
them into passive victims in a male dominated society.
Any attempt to improve the status of women should start with
empowerment. Empowerment implies the creation of an enabling environment were individuals
can fully use their lives. The purpose of empowerment is to free someone from rigorous control
to give them freedom to take their responsibility for their own ideas and action to realize hidden
resources which would otherwise remain inaccessible.
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The SBL Programme has proved its efficacy as a mainstream Programme for banking with the
poor. SHG-Bank Linkage Programme is advantageous to banks, Self Help Groups and also
NGOs. The main advantages of the Programme are as follows.
Advantages to bank:
a. Mobilisation of small savings.
b. The problem of dealing efficiently and economically with a large
number of small borrowers is overcome through Self Help Groups.
c. As the task of assessing individual credit needs, sanctioning,
supervising credit and monitoring repayment are externalized, the transaction cost considerably
reduced and,
d. Assured and timely repayment because of group supervision, which
leads to faster recycling of funds.
Advantages to SHGs:
a.Provide door-steps saving and credit facility for the poor
b.They enjoy total autonomy in thrift and credit management
c. Access to larger amount of funds.
d.Strive for gradual improvement in the economic status of each member
e. Promoting SHG members as well as quality micro enterprises.
f. Leading to empowerment of the poor.
Phases of SHG Bank Linkage Programme:
The SHG Bank Linkage Programme has passed through various phases over
the last one and a half decade, viz.
I. Pilot testing during 1992 to 1995
II. Mainstreaming during 1996 to 1998 and
III. Expansion from1998 onwards
The Programme has now assumed the form of a Micro Finance movement in
many parts of the country. The target of covering one third of the rural poor through linkage of 1
million SHGs to be achieved by 2007 was realized much ahead by the end of March 2004 (RBI
2007).
Partner Agencies of SHG-Bank Linkage Programme:
a)Commercial Banks:
The SHG-Bank Linkage Programme becomes a part of business of all the 27
public sector banks and 23 private sector banks. State Bank of India linked the highest number of
SHGs during 2006-2007, followed by Indian Bank and Canara Bank (NABARD 2007). The
32 | P a g e
private sector banks which significantly supported SHG financing were ICICI Bank and Vysya
Bank followed by Dhanalaksmi Bank.
b) Regional Rural Banks:
The RRBs financed SHGs in a very significant way during the period 20012006. All the 196 RRBs in the country participated in the SHG-Bank Linkage Programme during
the year 2004-2005. During the year 2006, only 158 RRBs participated in the Programme and
during 2007, the number reduced to 96.
c) Co-operative Banks:
Co-operative Banks, though comparatively late starters, have began making
forays into the Micro Finance sector on a large scale. The amendment made by many of the
states in their Co-operative Societies Act enables Co-op. Banks to take up the activity of
promotion and nurturing of SHGs. During the year 2000-2001 only 94 Co-op. Banks in the
country participated in SHG-Bank Linkage in the Programme. During the year 2006-2007, 352
Co-op. Banks participated in 11
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Chapter- 3
Theoritical Perspective
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Chapter- 4
Analysis and Interpretation
36 | P a g e
Table 1
The below table furnishes the details of number of respondents in certain age limits and the
respective percentage:
Age
20-30
31-40
41-50
51-60
Above 60
Total
*Source: from the field data
No of respondent
7
26
30
28
9
100
Percentage
7
26
30
28
9
100
Interpretation:
From the above data, it is clear that the respondents between the age group of 20-30 years and
above 60 years make the lowest percentage. Thirty per cent respondent belongs to the age group
of 41-50 years whereas 31-40 years and 51-60 years age group makes a percentage of 28 and 26
respectively. It can be inferred that majority of the respondents belongs to the upper age category
in the society, which make an overall 84 percentage of the total.
4.2RELIGION
37 | P a g e
Table 2
The below table details the number of respondent belonging to each religion and their respective
percentage
.
Religion
No of respondent
Hindu
81
Muslim
11
Christian
8
Other
0
Total
100
*Source: from the field data
Percentage
81
11
8
0
100
Interpretation:
From the above data, it is clearly understood that the respondents belonging to Hindu religion
dominates the majority with a whopping 81 percent whereas a mere 11 percent of respondents
belongs to Muslim Community and the remaining 9 percent represents the Christian religion.
Hence the majority belongs to Hindu religion.
4.3CASTE CATEGORY
Table 3
Table showing the caste category and the number of the respondents:
38 | P a g e
Caste Category
No of respondent
General
61
OBC
26
SC
12
ST
1
Total
100
*Source: from the field data
Percentage
61
26
12
1
100
Interpretation:
From the above data it can be seen that 61 percent belong to general category, 26 percent belong
to OBC category, 12 percent belong to SC category, and remaining belongs to ST category.
General category forms the majority number of respondents.
CASTE CATEGORY
General
OBC
SC
ST
Educational
No of respondent
qualification
Illiterate
8
Primary
16
Secondary
28
Intermediate
20
Degree and above
28
Total
100
*Source: from the field data
Percentage
8
16
28
20
28
100
Interpretation:
Out of a sample of 100 cases, it was found that majority of the respondents are educated in which
28 percent belongs to people with qualification as degree or above, and a same percentage of
people has secondary level education whereas 20 percent people have attended the intermediate
level of education. A total of 16 percent of respondents have basic primary level education and
the remaining 8percent was found to be illiterate.
EDUCATIONAL QUALIFICATION
Illiterate
Primary
Secondary
Intermediate
Degree and above
4.5 OCCUPATION
Table 5
The below table details the number of respondent occupation and their respective percentage.
Occupation
Accountant
40 | P a g e
No Of Respondent
26
Percentage
26
Agriculture
2
Business
10
Carpenter
1
Self-motivated
5
Unemployed
56
Total
100
*Source: from the field data
2
10
1
5
56
100
Interpretation:
From the above field data we could figure out that majority of the respondents have no
occupation, in other words 56 percent of the whole respondents are unemployed. Twenty six
percent works as accountants in various levels whereas 10 percent found themselves into
business. Five percent being self-motivated and the remaining 1 percent belong to carpentry
works.
OCCUPATION
Accountant
Agriculture
26%
2%
10%
56%
Business
Carpenter
Self-motivated
1%
unemployed
5%
No of Respondent
20
47
Percentage
20
47
10000-15000
14
15000-20000
11
More than20000
8
Total
100
*Source: from the field data
14
11
8
100
Interpretation:
From the above stats it is clear that 20 percent of the respondents monthly income is below
5000, 47 percent of the respondents get a monthly income of 5000-10000. A group of 14 percent
of respondents receive a monthly income of Rs10000-15000 . The remaining 11 percent of the
respondents monthly income is more than 20000.
MONTHLY INCOME
Below 5000
5000 to 10000
10000 to 15000
15000-20000
More than20000
42 | P a g e
Expenditure
Below 5000
No of Respondent
Percentage
45
45
50000-10000
30
30
10000-15000
20
20
Total
100
*Source: from the field data
100
Interpretation:
From the field data provided above , we can find that an average amount of below 5000Rs serve
as monthly expenditure for 45 percent of respondents. Thirty percent of people spends around
5000-10000 a month whereas 20 percent spend a sum around 10000-15000 as monthly
expenditure. Only 5 percent of the total respondents have monthly expenditure of more than
15000Rs.
MONTHLY EXPENDITURE
Below 5000
50000 to10000
10000-15000
More than 15000
43 | P a g e
Marital status
No of respondent
Percentage
Married
78
78
Unmarried
Divorced
11
11
Widowed
Total
100
*Source: from the field data
5
100
Interpretation:
From the above data it can be seen that 78 percent of the respondent are married, 6 percent of
respondent are unmarried, 11 percent of respondents are divorced, and 5percent of respondent
are widowed.
Married
Unmarried
Divorced
Widowed
Table 9
The below table details the number of respondents family particulars and their respective
percentage.
44 | P a g e
Size of family
No of respondent
Percentage
Below 2
02 04
46
46
More than 4
51
51
Total
100
*Source: from the field data
100
Interpretation:
The above information fetched from various field data it clearly suggests that 51 percent of the
total respondents has 4 or more members in their family. Families with 2-4 members make a
pretty good percentage of 46. The remaining 3 percent consists of 2 or below number of people
in the family.
(Land)
No of respondent
Percentage
38
38
33
33
29
Total
100
*Source: from the field data
29
100
Interpretation:
From the above stats it can be seen that 38 percent of the respondent are below 500, 33 percent
of the respondent are between 500-1000, 29 percent of the respondent are more than 1000.
No Of Respondent
Percentage
Yes
92
92
No
Total
100
100
Interpretation:
The above data suggests that 92 among 100 respondents stay in their own house whereas rest 8
percent doesnt own a house and stays either in rent or leased house.
46 | P a g e
Type Of House
No of Respondent
RCC
63sqfeet
Tiled
27sqfeet
Thatched
10sqfeet
Total
100
*Source: from the field data
Percentage
63
27
10
100
Interpretation:
From the above data sampling of over 100 respondents suggest that 63 percent of majority
people stay in RCC and a minority of 10 percent stay in thatched houses. The remaining
27percent lives in tiled homes.
Acres of Land
Below 20cent
20-40cent
47 | P a g e
No of Respondent
63
29
Percentage
63
29
40-60cent
Above 60cent
Total
*Source: from the field data
6
2
100
6
2
100
Interpretation:
From the above data it can be seen that 63 percent of the respondent owns below 20cent of land
whereas 29 percent of the respondent owns 20-40cent of land. A good amount of 40-60cent land
is owned by 6percent of respondents and a mere 2 percent of the respondent owns above 60cent
of land.
Table 14
The below table details the number of respondents group size of the SHG and their respective
percentage.
Group Size
48 | P a g e
No of Respondent
Percentage
Below 5
0
05 10
0
10 15
39
Above 15
61
Total
100
*Source: from the field data
0
0
39
61
100
Interpretation:
From the collected data, it can found that, a majority of (61percent) of respondents have a group
size of more than 15 people and remaining 39 percent has around 10-15 members in their group.
4.15 SINCE HOW LONG YOU ARE THE MEMBER OF THE GROUP
Table 15
The below table shows the details of the number of respondents since how long there are the
member of SHG and their respective percentage.
Member Of The
No of Respondent
Percentage
Below 5yrs
44
44
05 10yrs
55
55
Group
49 | P a g e
Total
100
100
Interpretation:
Data suggests that 55 percent people corresponds to SHG from around 5-10 years. Just 1percent
of the total respondent had covered more than 10years where as the remaining 44 percent
respondents are acting as the member from past 4 years or less.
50 | P a g e
No of respondent
Percentage
30
14
40
16
100
30
14
40
16
100
From the above stats it can be seen that 30 percent of the respondent are motivated by family to
join SHG and a 14 percent of the respondent were motivated by friends for joining SHG. A vast
40 percent of the respondent were motivated by group member to join SHG and remaining 16
percent
of
the
respondent
are
self
motivated
to
join
the
SHG.
Family
Friends
Group member
Self motivated
No of respondent
46
4
44
Percentage
46
4
44
Get Together
Total
*Source: from the field data
8
100
8
100
Interpretation:
From the above stats it can be seen that 46 percent of the respondent are motivated for extra
income, 4 percent of the respondent are motivated to join with SHG to eliminate by family
problem, 44 percent of the respondent are motivated by the financial requirement to maintain the
family and 8 percent of the respondent are motivated for a get together.
Extra income
Family problem
Financial support
Get Together
Percentage
Functioning
Secretary
27
63
President
63
27
10
10
Total
*Source: from the field data
100
100
Interpretation:
Analysis suggests that majority of the respondents decision are taken by secretary, 27 percent of
the respondent's decision are taken by president, 10 percent of the respondent's decision are taken
by all members together. We can see that president plays an important role in the decision
making of day to day functions of the group.
No of respondent
Percentage
Yes
96
96
No
Total
100
100
53 | P a g e
No of Respondent
Percentage
100
100
Total
100
*Source: from the field data
100
Interpretation:
A cent percent of respondents are privileged with a bank account.
Percentage
96
4
100
The data from field sources represents that 96 percent of the respondent are taken loan from the
bank and the remaining 4 percent of the respondent have not yet taken loan from bank.
No of respondent
28
38
34
100
Percentage
28
38
34
100
Interpretation:
The collected data suggests that 28 percent of the respondent's have taken loan for agriculture
purpose whereas 38 percent of the respondent's took loan for the development of the small scale
industrial. Few members have taken loan for other purpose which computes to 34 percent of
overall respondents.
PURPOSE OF LOAN
Agriculture
Small scale
Other
55 | P a g e
No of respondent
39
30
31
100
Percentage
39%
30%
31%
100%
Interpretation:
From the above stats it can be seen that 39 percent of the respondent pay 11 percent as rate of
interest for their loan, 30 percent pay 11.50 percent as rate of interest on their loan and 31
percent pay 12 percent as rate of interest on their loan.
4.24 IS BANK LOAN AMOUNT ADEQUATE TO SHG
Table 24
The below table shows the details of the number of respondents regarding there opinion whether
the bank loan amount is adequate and their respective percentage.
Is Bank Loan Amount Adequate
No of respondent
Percentage
Yes
100
100
No
100
100
Total
*Source: from the field data
Interpretation:
It is clearly understood from the data that every individual in the group feels that the amount
provided by respective bank is adequate for their needs.
56 | P a g e
No of respondent
bank
Below 50000
15
50000-75000
51
75000-100000
22
More than1000000 12
Total
100
*Source: from the field data
Percentage
15
51
22
12
100
Interpretation:
The above stats suggest that 15 percent of the respondents have taken an amount
of below 50000 as bank loan. Major 51 percent of the respondent take have taken an amount of
Rs50000 to 75000 as loan whereas 22 percent of the respondent took Rs 75000 to 100000.
Minority of 12 percent respondent took a loan amount of Rs100000.
57 | P a g e
Percentage
0
0
100
100
Interpretation:
From the above stats it can be seen that all the respondent repay loan to the bank monthly.
of
No of respondent
Repayment
Fully repaid
2
Partly repaid
98
Total
100
*Source: from the field data
58 | P a g e
Percentage
2
98
100
Interpretation:
Above stats shows that 98 percent of respondents have only partially repaid their loan amount
and the remaining 2 percent have closed their loan transactions with Bank by paying the whole
amount.
4.28 DELAYING IN SANCTIONING OF LOAN
Table 28
Delay In Sanctioning Loan
Yes
No
Total
*Source: from the field data
No of respondent
3
97
100
Percentage
3
97
100
Interpretation:
From the above stats it can be seen that 97 percent of the respondent say that is no delay in
sanctioning of loan by bank, 3 percent of the respondent have opinion that there was a delay in
sanctioning the loan by bank
59 | P a g e
No of respondent
Percentage
12
88
12
88
100
100
Stats suggests that about 88 percent of the respondents had no difficulties in the time of loan
where as 12 percent respondent faced difficulties in the time of loan.
No of respondent
100
0
100
Percentage
100%
0%
100%
Interpretation:
Every single respondent agrees that SHG provide personal loan which makes it a cent percent
activity.
No of respondent
1
9
90
100
Percentage
1
9
90
100
Interpretation:
References shows that 1 percent of the respondent received an amount of Rs 5000 from the SHG
as loan and 9 percent of the respondent received Rs 7500 from the SHG. A majority 90 percent
of respondents agreed that they received up to Rs10000 as loan amount.
60 | P a g e
Percentage
100
0
0
100
Interpretation:
From the above stats it can be seen that the rate of interest of all the respondents in the SHG was
12 percent
No
respondent
33
16
13
12
26
100
of
Percentage
33
16
13
12
26
100
Interpretation:
The field source data suggests that 33 percent of the respondents utilize the loan amount for their
childrens education but a 16 percent of the respondents utilize the loan amount for house repair.
A little 13 percent of the respondents utilize the loan amount for medical treatment whereas 12
percent of the respondents utilize the loan amount for other works.
61 | P a g e
No of respondent
Percentage
Yes
32
32
No
68
68
Total
100
*Source: from the field data
100
Interpretation:
Analysis shows that about 32 percent of the respondents have agreed to the fact that the credit
facilities have improved after they had joined SHG and the rest restricts themselves to agree to
the same.
No of respondent
42
22
Percentage
42%
22%
Nil
38
Total
100
*Source: from the field data
38%
100%
Interpretation:
If the credit facilities have to improve, it can be seen that 42 percent of the respondents wanted it
from the banks, 22percent wanted from the society and the rest of the 38 percent of the
respondents were satisfied with the present credit facilities.
No of respondent
Percentage
Supportive
94
94
Non supportive
Total
100
*Source: from the field data
100
Interpretation:
From the above stats it can be seen that 94 percent of the family are supportive with the
respondents to function with the SHG, 6 percent of the family are non supportive with the
respondents to function with the SHG
63 | P a g e
Percentage
7
93
100
Interpretation:
A majority of 93 percent of the respondent says NO to conflict among group member whereas 7
percent of the respondents agrees have conflict among group members.
Percentage
0
7
0
7
Interpretation:
All of the 7 percent respondents who had conflicts among the group members suggest to have
counselling to resolve it.
No of respondent
Group
Highly unsatisfied
0
Unsatisfied
2
Neutral
15
Satisfied
38
Highly Satisfied
45
Total
100
*Source: from the field data
Interpretation:
64 | P a g e
Percentage
0
2
15
38
45%
100%
From the above stats it can be seen that a mere 2 percent of the respondent are dissatisfied with
the functioning of the SHG, 15 percent of the respondent are neutral with the functioning of the
SHG and a 38 percent of the respondent are satisfied with the functioning of the SHG. A good
majority of 45 percent of the respondents are highly satisfied with the functioning of the SHG.
GENERAL ENQURY
4.40 FOOD EXPENDITURE
Table 40
Before Joining
Percentage
Below 2500
69%
2500-5000
11%
5000-7500
12%
Above 7500
8%
Total
100%
*Source: from the field data
After Joining
Below 2500
2500-5000
5000-7500
Above 75000
Total
Percentage
39%
35%
14%
12%
100
Interpretation:
From above table it is clear that a major majority (69%) spent less than 2500 INR for food before
joining SHG. However the value dropped down considerably low (39%) after joining the same.
65 | P a g e
There is a substantial rise in 2500-5000 INR category after joining SHG as the value increased
from 11% to 35%. There is a slender hike in 5000-7500 INR & above 7500 category after joining
SHG. From the data it is clear that there is a general trend to spend more after joining SHG.
However 39% are unaffected and still opts to spend less than 2500 INR for food.
Before
Joining
Percentage
SHG
Below 2500
0.77
2500-5000
0.15
5000-7500
0.07
Above 7500
0.01
Total
100
*Source: from the field data
After Joining
Percentage
Below 2000
2000-4000
4000-8000
Above 8000
Total
0.48
0.3
0.21
0.01
1
Interpretation:
Since there was a general trend of spending more money on food after joining SHG, the amount
spent on non-food category plunged down significantly in below 2500 INR category. The value
dropped from 77% to 48%. Interestingly, the amount spent in non-food expenditure doubled
(15% to 30%) after joining SHG irrespective of the hike in food expenditure in 2500-5000 INR
category. Similar trend followed in 5000-7500 INR category as the value tripled from 7% to
21%. For above 7500 INR category however had no variations as the value remained the same
(1%).
66 | P a g e
After Joining
Below 10000
10000-20000
Above 20000
Total
Percentage
0.91
0.07
0.02
100
Interpretation:
From above table it is clear that majority of expenses comes under 10000 INR category. Monthly
expenditure came down from 95% to 91% after joining SHG. However for 10000-20000 INR
category there was a hike in monthly expenditure from 04% to 07%. Similar trend followed in
above 20000 INR category as the value increased from 01% to 02%.
67 | P a g e
CHAPTER-5
FINDING
As per the study majority of the respondents belong to the hindu religion with age group 31 to 60
where the general category of caste forms the majority number of respondents.
Accordingly it was found that 28 percent of respondents fall in the category with qualification
degree or above and secondary level education but more than half of the respondents are
unemployed.
It is clear that 47 percent of the respondents get a monthly income of 5000 to 10000 where most
of the respondents have a monthly expenditure of less than 5000.
68 | P a g e
From the above data 78 percent of respondents are married shows that 51 percent of the
respondents has 4 or more members in their family.
An land size of 500 acres are owned by 38 percent of the respondents and states that most of the
respondents live in their own house.
The SHG contains a minimum of 10 members in every group. From the collected data, we found
that a 61 percent of group contains more than 15 members. In other words, the awareness of
financial benefits impressed the common man.
The concept of SHG is known to the common people from many years. Survey suggests that 55
percent of respondents is a member of the group from past 5-10 years. This undoubtedly implies
that, the SHG can provide a very good life style and financial support to the members. This
makes them willing to work together without any disputes.
From the above data, we can see that the already existing SHG members motivated 40 percent of
respondents to join the SHG. The main reason behind the motivation being the security to ones
life after joining such groups.
It is essential in our day to day life to have an extra income so as to provide a basic financial
support to the family. The reason for 46 percent of respondents to join SHG was the idea of an
extra income whereas 44 percent thought of the financial support SHG can provide.
The decision maker in group is the Secretary. The Secretary takes decision which is beneficial
for the group and to the members.
The banks provide loans to SHG to make the group members self-employed and making them
self-confident. So that a 96 percent of members responds favor to the loan.
Every members of the group is an account holder. This will make a good improvement to their
savings. In another viewpoint, the banks provide loans only through the bank accounts. Hence
being an account holder is inevitable.
From the data which accounts about the loan, it is clearly seen that 96 percent of the members
takes or have taken loan through SHG. This implies that the members in the groups are eager to
work and in return they can serve their respective families an earning member.
69 | P a g e
By attending the awareness classes, the members are using the loan amount either to improve
their agriculture or the small scale industry or the both. By doing this they are trying to improve
the financial background and their life style.
The banks are providing loans to the SHG so as to help the members. The interest rate is very
less when compared to private sectors. Microfinance is actually introduced by the government to
help the poor. The lowest interest rate starts at 13 percent in the private sectors.
To begin a small scale industry, the amount given by the banks is really adequate. The members
who are taking the loans from the banks have a clear picture about the loan amount and the
interest they have to pay back. More over they are compelled to work hard for the repayment of
their respective loan amount.
When it comes to repaying the loan amount, every group, that is, cent percent groups repay their
loan monthly taking their convenience into account.
Most of the banks dont make any delay in sanctioning loans to the groups. Rarely banks make
delay due to insufficient funds. Majority of members in SHG are not facing any difficulties for
taking loans. Some members are facing certain problems due to lack of knowledge.
Cent percent of members takes personal loans from SHG up to a sum of 10000INR at an interest
rate of 12 percent. They use the amount either for their childrens education, or house repair or
any other logical purposes. It is very helpful for members to get such loan amounts from SHG.
70 | P a g e
CHAPTER-6
SUGGESTIONS
71 | P a g e
6. SUGGESTIONS
Awareness classes should be provided for women to avoid ego and clash among the members.
It must be make sure that the loan taken from bank and other institution by SHG members is
72 | P a g e
CHAPTER-7
CONCLUSION
7.CONCLUSION
73 | P a g e
Self Help Groups of rural women can form the heart of community development activities. The
pooling of minuscule and individual financial savings of the members through group activities
can act as a strong back-bone for women empowerment. Supplemented by the linkages of the
self help groups with banks, thereby enabling micro-credit facilities, the financial power of these
rural women gets substantially increased.
The present study evidences the existence of strong linkages of the SHGs with banks. The very
reason of members, as opined by them, in joining the group is the improved chances of
accessibility to loans. Also the opportunity to undertake economic activities through group
efforts, and the concomitant learning of entrepreneurial and technical skill sets act as motivators
for group membership. Thus, there exists strong positive relation between the reasons for joining
the group, and the existence of bank linkages. The strong bank linkage that exists, can visibly
enhance the opportunity of members to access loans, undertake economic activities, and develop
skills.
The high incidence of bank linkage and accessibility to finance through SHGs is still not
relieving the rural population from the clutches of money lenders and exorbitant interest rates. It
points to the important fact of insufficiency of funding through the bank linkage porgramm. The
lack of transparency in the SHG activities, and inaccessibility to official records may further
hinder the effectiveness of the movement
BIBLIOGRAPHY
Journals
74 | P a g e
Book
12. Micro credit guideline 2013-2014
1. Age: ____
2. Religion:
(1) Hindu
(2) Muslim
(3) Christian
3. Caste category:
(4) Others
(1) GENERAL
(2) OBC
(3) SC
(4) ST
4. Educational qualification.
(1) Illiterate
(3) Secondary
(2) Primary
(4) Intermediate
(2) Unmarried
(4) Widowed
9. FAMILY PARTICULARS:
Sl. No:
76 | P a g e
Sex
Age
Education
Occupation
(2) No
(2) Tiled
(3) Thatched
(2) No
(2) No
(2) No
(3) Others
10. Rate of interest is to be given to the loan?_________________
11. Is Bank loan amount adequate to SHG?
(1) Yes
(2) No
12. How much loan you have taken from the bank?
a) Less than 50000
b) 50000 to 75000
c) 75000 to 100000
(3) Monthly
14. Status of repayment
(1) Fully Re paid
(2) No
16. Did you face any difficulties at the time of getting loan?
(1) Yes
(2) No
(2) No
(2) 7500
(3) up to 10000
(2) 24%
(2) Bi-Weekly
(3) Monthly
21. Status of repayment
(1) Fully Re paid
(5) other
(2) No
(2). No
79 | P a g e
(2) Counselling
2) Dissatisfied
(3)Neutral
29.GENERAL ENQUIRY:
IND
EX
NO
MONTHLY
INCOME
MONTHLY
FOOD
NON
FOOD
EXPENDITUR
EXPENDITUR
EXPENDITUR
AFTE
E
BEFO
AFTE
E
BEFO
AFTE
BEFO
AFTE
MONTHLY
SAVINGS
BEFO
AFTE
E
BEFO
RE
RE
RE
RE
RE
JOINI
JOINI
JOINI
JOINI
JOINI
JOINI
JOINI
JOINI
JOINI
JOINI
NG
NG
NG
NG
NG
NG
NG
NG
NG
NG
SHG
SHG
SHG
SHG
SHG
SHG
SHG
SHG
SHG
SHG(I
(INR)
(INR)
(INR)
(INR)
(INR)
(INR)
(INR)
(INR)
(INR)
NR)
80 | P a g e
REM
ARK
S
81 | P a g e
82 | P a g e