Performance of SHGs in the Backward Districts of West Bengal: An Analysis

Performance of SHGs in the Backward Districts of West Bengal: An Analysis

Debashis Mazumdar (The Heritage College, India), Santanu Bisai (Shyamaprasad College, India) and Mainak Bhattacharjee (The Heritage College, India)
DOI: 10.4018/978-1-5225-5213-0.ch013


One of the escape routes for the low-level development trap in the backward regions of India has been the formation of self-help groups (SHGs) and the provision of microfinance to the SHGs. This chapter analyzes the performance of such SHGs in some of the economically backward districts of West Bengal based on primary data collected from some sample drought-prone and non-drought-prone blocks of Paschim Medinipur and Bankura districts of West Bengal. The performance of sample SHGs in these drought-prone areas has been measured by (1) per-capita deposit, (2) per-capita credit, (3) credit-deposit ratio, and (4) repayment-credit ratio. An intra-regional difference in this performance has been observed in SHGs functioning in drought-prone and non-drought-prone blocks within the backward districts. Further, applying Probit model, it is observed that the SHG can climb easily upon the performance ladder with younger and educated members, greater percentage of members above the poverty level, better utilization of credit received, and so on.
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Literature Review

Several studies have been undertaken by the researchers from time to time to review and analyze the performance of the SHGs in several parts of India and abroad. In some studies this performance has been measured in terms of the contributions of these SHGs towards women empowerment and financial inclusion of poor people particularly in rural areas (Dodkey, 1999; Mayoux, 2001; Krishna, 2003; Littlefield, Murduch & Hashemi,2003; Pitt, Shahidur & Cartwright, 2003;Shanthi & Dhanalakshmi, 2004; Panda, 2005; Jerinabi,2006; Sau,2009). These studies also indicate that the Self-Help Groups have been instrumental in creating an alternative system of credit delivery for meeting the credit needs, especially of the poorest people. Puhazhendhi and Badatya (2002) surveyed 115 members from 60 SHGs in Eastern India for estimating the performance of SHGs before and after group formation. This study indicated that there had been substantial reduction in the dependence of rural poor on the non-institutional sources of rural credit after the formation of SHGs. Performance of the SHGs was also measured in terms of their contribution towards skill formation among the members through several training programmes (Tankha, 2002;Tripathy,2004;Sharma, Roy & Chakravorty,2012). These trainings empowered the SHG members with proper knowledge, skill and attitude which were required to start any new venture. Participatory training on the part of SHG members was found to be an important contributor to the better performance of SHGs (Majumder, 2014).

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