Is the SHG story in Odisha going bustIJ Apparently so, as a significant number of Self Help Groups (SHGs) in the State are now going sick.
What a contrast it is, when the State still needs another over 1.6 lakh SHGs more for uplifting people from poverty, a whopping around 40,000 SHGs alone in State have gone kaput in 2014 – 2015 and overall around 71,000 SHGs have gone bust in just two years since 2013. The ominous number then did ring up the alarm bell for the State as members of a whopping 42 per cent of SHGs linked to banks in Odisha are engaged in farming. And, a high of three in every five of the 42 per cent members belong to BPl. Since most of them are sharecroppers/marginal farmers, it’s they who are feeling the pinch feel observers in NABARD.
According to the data with NABARD, Odisha now has only over 4.5lakh SHGs against a whopping over 5.23 lakh SHGs in 2013. While the loan outstanding of the SHGs in the State has increased during the period, the dampener is the Non-Performing Assets (NPAs) which have increased exponentially to an unsustainable level of 22 per cent from a mere 2.3 per cent in 2010.
Moreover, almost over-a-half of the loans has now turned overdue. On the contrast, southern States which boast of having largest SHG network in country have a NPA almost equivalent to around one-third of Odisha.
NABARD sources indicated that the higher loan outstanding against SHGs in State is to be its disadvantage as it could add more to the NPA worries in coming years as there is a slack in institutional support to SHGs unlike in the southern States. The Mission Shakti launched with much fanfare helped in adding numbers but have very little resources to bring a turnaround in their health, observed a senior official. The target-oriented approach of State Government is compromising with the quality of SHGs and is the genesis of the rot in the SHG sector here, he remarked.
How it pinches sharecroppers/farmers hereIJ In Odisha, with a mere saving of around Rs 500/month (as per SAS 2013 report), farmers took consumption loan to meet their miscellaneous needs and with SHGs going bust, many would again fall back on money-lenders, feared NABARD officials. Significantly, a 2014 NABARD study has revealed that during 2010-2013, after joining SHGs, the dependence on money-lenders in the State have recorded a decline.
Even, ground reports suggest many farmers owing dues to the SHGs committed suicide in western and northern Odisha. The reason: As high NPAs dissuaded banks to approve new loans, in order to fulfil their credit requirements, some SHGs availed loans from Micro-finance Institutions (MFIs) and even money-lenders but with a higher rate of interest. Given that many farmers took consumption loan from SHGs, and when the crops failed they defaulted. However, the repayment pressure led many to take extreme action, but the Government washed off its hand as they were not agriculture loans, quipped a senior NABARD official.