CHAPTER I

INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION

India lives in her 6,38,345 villages with 24 crore poor engaged in micro

enterprises. As per the Government of India’s Ministry of Micro, Small and

Medium Enterprises (MSES) Annual report of 2010-2011, there are 133.68 lakhs

(in number) micro enterprises in India. Poverty in India is widespread with the

nation estimated to have a third of the world’s poor. The credit needs and other

financial services are provided to the rural masses in general and to the poor in

particular through the rural financial markets comprising an unorganized sector

consisting of commission agents, moneylenders, landlords and the like and an

organized sector consisting of pyramid type cooperative credit institution – broadly

classified into urban credit cooperatives and rural credit cooperatives. The urban

credit cooperatives are also known as Urban Cooperative Banks. The urban

cooperative banks aim at meeting the credit requirements of the people living in

urban areas.

The rural credit cooperatives may be further divided into short-term credit

cooperatives and long term credit cooperatives. With regard to short term

cooperatives, at the grass-root level there are Primary Agricultural Credit Societies

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(PACS) dealing directly with the individual borrowers. At the central level (district

level) District Central Cooperative Banks (DCCB) function as a link between the

primary societies and State Cooperative Apex Banks (SCB). As against the three

tier structure of the short- term credit cooperatives, the long term cooperative credit

structure has two tiers with many states with Primary Cooperative Agriculture and

Rural Development Banks (PCARDB).

Though the SHGs were started in 1997 in Tamil Nadu, the concept

penetrated down only in recent years. Now there is a greater amount of socio-

economic emancipation among the members of the SHGs. Hence there is a need

for evaluating the social and economic impact of the SHGs on their members.

Among the various districts of Tamil Nadu, Tirunelveli District occupies a

predominant position in the starting of the SHGs. In Tirunelveli district the urban

centers have more rural bias and the economic activities are more agro-based.

Hence the SHGs have been formed for meeting the needs of industrial and

agricultural activities. As on November 2008, there were 3.78 lakh of SHGs in

Tamil Nadu with a membership of 60.63 lakh. In Tirunelveli District there were

16,773 SHGs with a membership of 2, 69,0144.

The present study deals with the SHGs formed in Tirunelveli district. The

empirical findings of this study would pave the way for taking certain policy

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decisions for strengthening the SHGs and hence the study has been undertaken in

Tirunelveli district.

1.2 STATEMENT OF THE PROBLEM

Poverty and unemployment are the twin problems faced by the developing

countries. It seeks to decentralize powers to the elected representatives of

Panchayats and Gramsabha in identifying the beneficiaries and short-listing the

micro enterprise activities. It encourages group approach and plans to involve the

NGOs, the Banks and the other developmental sectors.

The distinguishing feature of the SHGs is creating social and economic

awareness among the members. The social awareness enables the members to lead

their lives in a sound hygienic environment and pursue a better living. The woman

members involve themselves more in taking decisions regarding the education of

their children, the investment of the family, managing the economic assets of the

family and bringing up cohesion among the members of the family and others for a

better living.

From the economic point of view both men and women work shoulder to

shoulder to increase the income of the family. Every member of the SHGs has felt

the need for more involvement in economic activities. The spirit for social and

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economic upliftment of members is the significant contribution of each and every

SHG.

There is a general tendency to consider the SHGs for all the ills of the rural

community. This is evident from the mushroom growth of self help groups in the

states and also in Tirunelveli District. In Tirunelveli District, in the year 1998, the

number of SHGs formed was 821. But in the year 2011 it was 16,773. In many

cases it has been a blind replication of success models without considering the

intricacies involved in group formation and sustainability. Hence the present study

is undertaken to study the performance of SHG in Tirunelveli district. Further an

attempt is also made to evaluate the social and economic benefits accruing to the

members of the SHGs.

1.3 OBJECTIVES OF THE STUDY

The objectives of the present study are as follows

i. To trace the genesis and development of SHGs in Tirunelveli District at

Thisayanvillai.

ii. To evaluate the performance of the sample SHGs in Thisanvilai selected for the

study

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iii. To anlayse the changes in the social conditions of the members of the self-help

groups

iv. To measure the impact of the SHGs on the economic condition of the members

v. To analyse the attitude of the members of the SHGs towards economic impact,

social impact, psychological impact and political impact and

1.4 SCOPE OF THE STUDY

The present study attempts to examine the socio-economic impact of the

SHGs on the beneficiaries. It examines how far the programme has helped in

raising the incomes and levels of living of the rural poor women and in enabling

them to cross the poverty line. The present study is from the standpoint of the

SHGs and their members.

1.5 HYPOTHESES

With a view to analysing the relationship between factors like term of

existence, literacy level of the leader, size of membership of the groups and

performance of the SHGs, the following null hypotheses were framed.

1. There is no significant difference in the self-worth of the sample members

before and after joining the SHGs

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2. There is no significant difference in the communication skill among the sample

members before and after joining the SHGs.

3. There is no significant difference in the reaction to the social evils among the

sample members before and after joining the SHGs.

4. There is no significant difference in the behavioral changes of the sample

members before and after joining the SHGs

5. There is no significant difference in the literacy level of the sample members

before and after joining the SHGs.

1.5.1 LIMITATIONS OF THE STUDY

The present study covers the people living in Thisayanvilai area only. Time

limitation for compelling the project. The data obtained in some cases may be

subjective. Difficulty in communication within the area while conducting the

survey. The information obtained from the consumers based on questionnaires was

assumed to be truthful. Since the survey is based on sampling method, it does not

disclose the character of the entire customers.

Limitations on the evaluation of present values are not necessarily

eliminated in the process of comparison.

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1.6 METHODOLOGY

1.6.1. COLLECTION OF DATA

The present study is empirical in character based on the survey method. The

primary data were collected from the selected SHGs with regard to their

homogeneity, regularity in conducting meetings, level of attendance, participation

in meetings of NGOs repayment performance, decision on financial transactions,

proportion of production loan to total loan, utilization of common fund, rate of

savings and level of training with the help of a structured interview schedule. Data

were also collected from members covering various aspects such as extent of

savings, level of income generation, pattern of lending, repayment performance

and other details related to socio-economic development using another interview

schedule .The secondary data were collected from the books, journals, magazines

and from the records of Mahalir Thittam Office, Thisayanvillai.

1.6.2. CONSTRUCTION OF TOOLS AND PRE-TEST

The variables used in the study have been identified during the discussions

with the officials of the NGOs and a preliminary interview with the selected Self-

Help Groups.

The variables thus identified by the researcher were operationalised. Based

on the variables identified for the study two schedules, one for the SHGs and
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another for the members, were drafted. The schedules so drafted were circulated

among a few research scholars for a critical review with regard to wording, format

and sequences. The schedules were suitably redrafted in the light of their

comments. The schedule for the SHGs was pre-tested with the help of the office

bearers of the SHGs. The schedule for the members of the SHGs was pre-tested

with the help of 25 members. In the light of their comments the interview

schedules were further modified.

1.7 FIELDWORK AND COLLECTION OF DATA

The researcher himself with the help of the NGOs carried out fieldwork for

this study. It was undertaken for a period of six months.

As stated earlier, the researcher used two interview schedules, one for the

collection of data from the SHGs and the other for the collection of data from their

members. The completed schedules were checked and the omissions and

commissions were rectified on the spot.

1.8. PERIOD OF THE STUDY

For collection of the secondary data on the functioning of the SHGs, ten

years were taken as the reference period. The required primary data were collected

from the members during the year 2014-2015.

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1.9 AREA OF THE STUDY

The study covers Thisayanvillai have a population of nearly 20000. Parts

from Thisayanvillai there are hundreds of surrounding villages and small

villages’ .people residing even in the areas of surroundings villages and small

village’s people residing even it has nearest villages. In this area SHGs, 10 SHGs

have been selected for the study.

1.10 SCHEME OF THE REPORT

The first chapter, “Introduction and Design of the Study”, presents the

introduction, statement of the problem, review of previous studies, objectives of

the study, hypotheses, scope of the study, methodology, period of the study, and

scheme of the report.

The second chapter, “Genesis and Development of the Self Help Groups in

Tirunelveli District at Thisanvilai”, traces the historical background of the concept

of micro-credit and the development of the SHGs. This chapter also explains the

concept of SHG, characteristics of SHGs, formation and development of SHGs,

role of the NABARD, role of the NGOs and the progress of the SHGs in

International, in India, in Tamil Nadu and in the study area.

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 The third chapter, “Performance of the SHGs”, furnishes the profile of the

sample SHGs and the factors influencing their performance at Thisanvilai. It also

contains a comparison of social factors with performance indicators of the SHGs.

The final chapter presents the summary of the findings; problems faced by

the Self-Help Groups and offer various suggestions for the successful

implementation of the SHG concept.

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