About the Author:
Kalyan Singh Kothari is currently a freelance journalist, accredited by the Government of Rajasthan, Jaipur. A veteran in the field, he has 30 years of experience as reporter/ war correspondent/ content writer/ journalist/ editor for various newspapers and publications, and still continues to work on journalistic assignments for UNICEF-Rajasthan, and various other national and international organizations, contributing developmental grassroots stories and features from Rajasthan.
Jaipur, Rajasthan – The Centre for Micro-finance (CmF), Jaipur, along with six partner agencies, has been engaged under “Sakh Se Vikas (SSV) – development through credit”, a regional development initiative through finance by forming women Self Help Groups (SHGs) in six districts of Rajasthan for intervention to promote livelihoods and poverty reduction.
This centre claims, “We strive for timely availability of micro-finance services to the poor and marginalized on fair terms and with dignity to help them enhance their livelihoods.” The initiative has now started showing positive results in the spheres of livelihood promotion and poverty alleviation.
During the annual SSV partners meeting, Mr. Jai Pal Singh, Executive Director, Centre for Micro-finance (CmF), said that the innovative approach through Sakh Se Vikas initiative seeded in 2003 with the support from Sir Ratan Tata Trust (SRTT) has now promoted more than 4,700 women Self Help Groups (SHGs) covering 70,000 poor households in Dholpur, Tonk, Ajmer, Alwar, Banswara and Dungarpur, facilitating savings of about Rs. 13 crores through their monthly meetings. The SHGs have also been able to leverage credit of more than Rs. 40 crores from the banks.
The SSV initiative seeks to demonstrate poverty reduction through community-owned financially-viable micro-finance programmes for the underprivileged communities in the state. Mr. Jai Pal Singh said that SSV experience has proven that poor need saving services; they need credit for meeting small needs like buying food-grains, fodder, for paying the school fees, etc., in beginning. After a year or so, SHG members need credit to retire costly debt of money-lenders, to take their land and jewelry back from mortgage, to buy a few goats, or similar assets. It is futile, and at times dangerous, to push SHGs to take ‘income generation activities’ like pickle-, agarbatti-, chalk-sticks-making in the beginning. Only about 1% SHGs take such income generation activities. He further emphasized the need to federate SHGs to ensure sustainability of the programme. He added that 22 federations, promoted as apex institutions of the SHGs under SSV, are progressing towards ensuring full operational costs.
As an impact of the initiative, it was observed that there was 59 percent reduction in loans taken from money-lenders. Loans from SHGs currently comprise 60 percent of total loans accessed by member households. He also pointed out social impacts on women, which was reflected in an increased involvement in decision-making in the family and increased utilization of health services by members.
Impressed by the long and rich experiences of demonstrating quality micro-finance and livelihood programmes, the learning from this initiative is being used in Dungarpur Project with the support from Bank of Baroda and Pilot Project with Department of Women and Child-Govt of Rajasthan (DWCD) for capacity building of department-promoted SHGs. SSV initiative plans to expand its outreach to 19,000 household over the next two years.
Mr. Sourav Roy, Programme Officer, while talking on the experiences of SSV partners in livelihood promotion, observed that the approaches used ensured credit linkage for investment in livelihoods and provided critical services along with credit. Agriculture and livestock emerged as two major sub-sectors through which more than 20,000 households are securing their livelihoods, making additional income of Rs. 8,000-12,000 annually, he added. This initiative to catalyze the micro-finance sector for financial inclusion of the poor and marginalized for their need to access credit and other financial services were provided at equitable and fair terms.
This attempt prompted the Government of Rajasthan to adopt this model for poverty reduction in Western Rajasthan. This approach of Sakh Se Vikas (SSV) improving quality of lives of many poor women has taken a big leap in Western Rajasthan. With an objective to address poverty through diversification and enhancement of livelihood options, the Government of Rajasthan has initiated a project – Mitigating Poverty in Western Rajasthan (MPOWER) with financial support from International Fund for Agriculture Development (IFAD), Rome and the Sir Ratan Tata Trust, Mumbai. The project is expected to impact 87,000 households across 1,040 villages in the region. CmF is working as a technical support agency for this project. Acknowledgement of the achievement of SSV is reflected in the MoU between two of these project funders – Government of Rajasthan and Sir Ratan Tata Trust. The Government of Rajasthan is interested to draw on the experiences of SSV initiative and is desirous of building synergies, for enhancing capacities at different levels.
Centre for Micro-finance would establish Community Finance and Livelihood Resource Centers in Alwar, Dungarpur and Jodhpur to provide training and capacity building support to NGOs, banks, government and community-based institutions. The capacity building and training of the SHG leaders will empower them to regulate the credit flow to the needy among them, as per their requirements.
About ‘Sakh Se Vikas’ (SSV)
Sakh-Se-Vikas – development through credit – is a regional development initiative in the state of Rajasthan which focuses on community based micro-finance as the core developmental strategy for strengthening livelihoods and reducing vulnerabilities of the rural poor. The initiative was launched in 2003. Building strong community owned, self-help based institutions is the core strategy of SSV initiative to ensure sustainability of these programmes.
As on March 2010, SSV reached out to 70,000 households through 4,636 Self Help Groups (SHG) in 10 districts of the state. Around 22 federations have been promoted under this initiative. Through cumulative savings of Rs. 192 million, these groups have leveraged external credit of Rs. 380 million so far. By 2012, it is planned to increase the outreach of the initiative to 190,000 households with major expansion focused in Western Rajasthan in collaboration with the Government of Rajasthan (GoR) and International Fund for Agriculture Development (IFAD).
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