SHG-Bank Linkage Programme for Rural Poor - an Impact Assessment

This paper assesses the impact of the SHG bank linkage program of NABARD, implemented since 1992, in three Eastern districts in the states of Orissa, Jharkhand and Chattisgarh, in India. It covers the following aspects:

• Structure and performance assessment of SHGs promoted under the SHG bank linkage program;
• Quantification of the changes in the savings and borrowing patterns amongst group members;
• Impact of the program on the income and employment of members;
• Changes in the social conditions of member households as a result of their involvement in the SHGs.

The scheduled castes, scheduled tribe and backward classes constituted 83% of the samples covered during the study, the main findings of which are:

• Different types of savings products enhanced member savings in the groups;
• The average loan per SHG member was 123% higher than the pre-SHG situation;
• In the post-SHG situation, consumption oriented loans were replaced by production oriented loans, mainly due to the skill training provided through the SHGs;
• Recovery performance from members to SHGs was 95% whereas it was 86.6% from SHGs to banks;
• Employment per sample household increased from 303 to 405 person-days between the pre and post SHG situations;
• Social empowerment of SHG members improved significantly in terms of self confidence, involvement in decision making, better communication etc.