Gender & Eval Community- Year of Evaluation'2015

Marco Segone, A K Shiva Kumar & Yamini Atmavilas in front of the Gender & Evaluation community poster in Jan 2015- first event in the Year of Evaluation held in Delhi.

Gender, Caste and SHGs in the context of neoliberal micro finance

1.0 Context:   Dalit women are discriminated against by intersections of caste, class and gender. Amongst Dalit women in Tamil Nadu, Arunthathiyars (AR) are the most exploited and steeped in poverty. Arunthathiyar women and men have no agriculture land, own limited livestock, are typically underemployed, and earn little income. Gender and caste-based division of work mediate work of AR women and men, and they are at times found in occupations paying little. AR women, face violence in gender, caste and class specific ways like sexual abuse by upper caste employers who provide work. It is in this context that Village Service Trust entered into partnership with Arogya Agam and Vasantham in Theni district which had a strong focus on addressing discrimination Dalits in general, and Arunthathiyars amongst them in particular. In 1990s, in response to demand, the partners of Village Service Trust (VST) commenced micro-finance intervention by forming self-help groups (engaged in savings, credit and social interventions) and federating them at different levels. After emergence of private for-profit Micro Financial Institutions (MFIs) in the late 2000s some of the self help groups (SHGs) began to collapse, with members taking multiple loans. The mid-term review report of VST partners observed that AR members were not able to improve as much as Backward Classes (BCs) and other Dalits. 


 2.0 Objectives of the study: It was in this context that VST and its partners initiated a study to understand the relevance of women’s SHGs in the context of neo-liberal micro finance and their effectiveness in poverty education, non-discrimination and empowerment of Arunthathiyar women. The specific objectives of the study were to examine the following: i) stability/ of groups of different caste compositions and reasons; ii) access of different caste women and SHGs to financial services etc and fulfillment of financial needs; iii) outcomes for different caste groups in terms of perceived food security, non-discrimination and empowerment, iv) social and financial viability of federations and SHGs of different compositions, v) relevance of SHGs in the context of different neoliberal microfinance and government schemes vi) suggest forward pathways to promote non-discrimination, poverty reduction and empowerment of women 

3.0 Methodology: The study adopted mixed methods. Apart from desk review of secondary literature the study conducted individual interviews and focus group discussions. Individual interviews (51 participants) were facilitated with ‘never joined’ members, ‘drop outs’ form SHGs, money lenders (including members of SHGs), anganwadi workers, elected members, school teachers, District Industries Officer, district officer NABFINS, and staff of two Non Banking Financial Companies. Focus groups discussions (45 covering 427 participants) were facilitated with 20 functioning SHGs, 11 defunct SHGs, 4 federations of SHGs, 1 Violence Against Women (VAW) committee, Tamil Nadu Pengal Iyakkam (apex of federations) and members of an Arunthathiyar welfare organisation. The suggestions and feedback of federations on findings and recommendations were incorporated.

4.0 Findings

4.1. Relevance of SHGs:  SHGs formed by VST partners are seen by most stakeholders as socially, economically and politically relevant in-spite of neoliberal MFIs and group-based government schemes. SHGs have enhanced confidence amongst women (in particular AR women) and brought them together to address gender and caste issues. Members’ standing vis a vis their husbands have improved, as well as in the community when they are leaders. The social relevance of SHGs was higher in the case of ARs and other Dalit groups, than BCs. Economically, SHGs have created a space for women to save, access loans without mortgage, with interest going to their collective capital. Harsh recovery methods like public shaming, unlike neoliberal MFIs and money lenders, are not adopted. A few SHGs have bought cement mixers and demanded higher wages. SHGs formed by VST partners are non- party-political formations which have fielded independent candidates, demand access to basic needs in Gram Sabha (village assemblies) and vote based on their choice. At the same time, the member observed that the capital with group is not enough, there was a need for emergency loan and multiple loans and need for soft loan to bring ultra-poor members into the group   Coverage of families of ARs and other Dalit groups is low at 40% and 35% respectively as well as young people (less than 18-29 years), while older women are proportionately covered.    

4.3 Stability of groups: One third of the SHGs formed by partners had become defunct by 2019/2020, with the percentage of AR and other Dalit groups becoming defunct higher, and that of BC groups being lower. However, when the federations had ARs amongst staff and in leadership positions the defunct rate of AR SHGs was lower than other Dalit grouops. The single most important factor for SHGs becoming defunct is the emergence neo-liberal MFIs, offering multiple loans at high interest rate without assessing capacity to absorb or purpose. The availability of loans from multiple loans has increased spending on retrogressive cultural practices (e.g. puberty ceremonies) than livelihood assets/activities leading to a vicious cycle of indebtedness. Other reasons for group collapse include, elderly not being eligible for loan from NABFINS, poor agriculture and consequent migration, government programmes which hijack SHGs formed by partners (and then drop them when programme closes), loans capture by leaders, resistance from husbands (amongst BCs) and death of member.   Majority of the defunct groups were interested in revival, other than BC groups as their husbands did not approve meetings when MFI loans were available at the door step

4.4 Access to financial services: Data from SHGs suggests that lesser proportion of members of AR groups had taken internal, federation and NABFINS loans, and of a lesser amount when compared to members of other SC groups, mixed caste, and BC SHGs. Further, in the case of ARs, social development loans and sei murai (customary practices) loans were higher than livelihood loans   Indirect and direct process discrimination explain the lower access of ARs to loan numbers and amount. Examples of indirect process discrimination include lesser savings and group capital of ARs,  ARs having limited assets and space to absorb same level of credit as others; persistent caste and gender based division of labour, mismatch between seasonal fluctuation of labour-based income and monthly requirement of repayment and more AR SHGs being disqualified by NABFINS due to members’ loans with MFIs. Examples of direct process discrimination include NABFINS’ lending amount to SHGs being linked to internal capital of SHGs which was lower in AR groups. Nevertheless, money lender dependency had reduced across caste. Few members had accessed government health insurance, life insurance (discontinued in one federation), pension schemes (other than nominal old age pension) and loan life insurance.

4.4 Outcomes - food security, non-discrimination and empowerment: The percentage who report improvement in food security is highest in the case of BC groups and least in the case of AR groups with improvements in other Dalits falling in between.  Apart from amount of loans through SHGs, other factors like access of a family member to government employment, improvement in health of oneself or one’s spouse and husbands’ inheritances also have a role to play in improvement. The AR members fared worst due to different kinds of outcome discrimination: indirect outcome discrimination (e.g. lesser space to tie animals, lesser access to clients, contacts, roads, transport, markets, jobs etc) and direct outcome discrimination (e.g. lesser income for similar activities, lesser ability to expand assets/wealth). In terms of empowerment, women’s access to credit, mobility, income, improved/ownership of house, choices like adoption and confidence to contest elections has improved. At the collective level SHGs and federations have addressed/trying to address issues of domestic violence, child marriage, sex selective abortion, prohibition (not so successfully), demanded higher wages (few villages) and addressed caste discrimination. In terms of attitudes and beliefs, norms on child marriage have changed, as well as allocation of women only to private sphere. However, social spending on ear piercing, puberty, and pregnancy ceremonies and dowry/marriages have increased, and new forms of wasteful spending are emerging. Male substance use remains high.  


4.5 Financial viability of federations and SHGs of different compositions: Half the SHGs -older, functioning without a break- expressed that the they could function without NGO support. Lesser proportion of AR SHGs felt they could function without NGOs, when compared to other Dalit SHGs and BC SHGs. All SHGs express that they needed the federation, which was their own institution. Leaders were rotated in majority of the SHGs, but in half after five years. Audit reports reveal that SHGs are largely financially viable, with BC groups being more financially viable than AR SHGs (with others falling in between), possibly because of their age and internal capital. Study of audit statement of four federations suggest that two are financially viable.   One viable federation has launched a collective cotton value chain and registered a separate entity for the activity, while substantial capital for on-lending has been provided to the second viable federation by the NGO. On the other hand, in the case of the two federations which are not viable, there have been higher level of defunct SHGs (decreasing federation capital) and no major collective enterprise. 

5.0 Recommendations

While the model of “SHGs-federations-NABFINS linkage is relevant” even the context of neo liberal MFIs and the purpose of poverty reduction, non-discrimination and women’s empowerment it has to be located within a broader “development” and “rights” approach

From a development lens,  

i)                   Saturate AR families in each hamlet/village, and prepare AR hamlet and household livelihood development plan with federation, pointing the pathway out of poverty, discrimination and women’s disempowerment. Strategies to revive defunct AR SHGs is necessary, with attention to bringing young women. This will also strengthen financial viability of federation.  

ii)                  Institutionalise commitment to AR women’s poverty reduction and empowerment in all SHGs/federations, kind of issues taken up, grading/monitoring system and place AR women affirmatively in leadership and as staff of federations. 

iii)                An AR women producer company/mutually aided cooperative and labour cooperative may be formed for promoting enterprises amongst AR women and men and helping them take up labour/construction contracts. These entities should be linked to federations, strengthening its viability. 

iv)                An ultra-poor line of credit for ARs who are highly food insecure may be launched which offers grant/soft loan for productive assets, consumption till assets yield, training and asset insurance.   Each SHG may also create an emergency fund to meet contingencies between meetings.

v)                  A village SHG committee may be considered comprising of women leaders of all the AR SHGs in the village or hamlet to take up development issues, mobilise government programmes etc.

vi)                Theni Women’s s bank or cooperative bank may be formed which offers a larger range of financial services like deposit schemes, government pension and insurance (health, life, accident) schemes 



From a rights lens, it is recommended that:

i)                   SHG/federations should play a role in strengthening accountability of neo liberal MFIs and money lenders, through financial literacy, having an MFI helpline in TMPI, requesting Collector to resume monthly meetings with civil society and holding public hearings on MFI atrocities.

ii)                  The asset base of ARs should be expanded through claiming Panchami land and common property resources, which could be managed collectively or individually. 

iii)                Federations should link labourers (AR women and men) to existing agriculture labourer’s union and construction workers unions and through them to labour welfare board for benefits, as well as to demand higher and equal wages and social protection.

iv)                Form sub committees in all federations for address discrimination against ARs and protecting existing entitlements 

v)                  At village level, the Violence Against Women committees may be facilitated to combat unnecessary spending on sei murais and retrogressive practices, fight menstrual taboos as well as caste-based discrimination

Beyond relevance of SHGs and federations with modified strategies and interventions, the study raises the point that substantive gender equality-SDG 5- cannot be achieved without attention to issues of intersections with other marginal identities of women. In this instance marginalised castes and oppressed groups within these. It also points that micro finance is neither the panacea for poverty reduction, non-discrimination and empowerment, nor can it be thrown out of the bath tub     

For full report please contact the author. For details on Village Service Trust please see For details on Arogya Agam refer

Photo credit: Arogya Agam

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Comment by Ranjani K.Murthy on August 25, 2020 at 2:04

Dear Swati

Please - would love to hear from you too. 

The kind of intersecting exclusions that operate have hardly been documented



Comment by Swati Mukund Kamble on August 21, 2020 at 15:17

Thank you for this report Ranjani. I am doing my Ph.D. on Dalit women's mobilization and the influence of their organizing on the policy process. I am looking at Maharashtra and SHG groups in the slums of Mumbai. Would love to interact with you

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