Keeping Things Alive On-ground: Learning from a Cluster Level Federation of SHGs in Banswara, Rajasthan

This Diwali I had decided to be in Anandpuri Block of Banswara, Rajasthan, and spent time with the local tribal community to understand their sentiments, accountability, responsibility, and ownership towards their Cluster Level Federation (CLF) as well as the sustainability factor of the CLF. In Rajasthan, a CLF is typically a federation of 3000-5000 women Self Help Groups (SHG) members registered as a cooperative society and having its jurisdiction over 40-50 continuous Gram Panchayats (village council). At present, in terms of both geography and membership, CLF is the highest level of community institution promoted by the RAJEEVIKA. The RAJEEVIKA, also known as Rajasthan Grameen Aajeevika Vikas Parishad (RGAVP) is an autonomous body promoted by the Government of Rajasthan to implement rural development schemes. In short, it is the State Rural Livelihood Mission for Rajasthan with a mandate to implement the National Rural Livelihood Mission’s (NRLM) activities in Rajasthan.

So, what all have excited me to go back to Banswara, that to be Chordi Gram Panchayat of Anandpuri block in specific- a tribal populated block located in south Rajasthan? In 2015. I was first posted in Anandpuri Block (Banswara) as a Young Professional and on 14th September of that year, we had inaugurated the Vandevi Rajeevika Mahila Sahkari Samiti Limited (let’s call it the CLF) in Chordi Gram Panchayat of Anandpuri, During that inauguration speech, I had made a promise to myself and my SHG members (Didis in short) that if they include all eligible households of their cluster area into SHG fold and run the CLF successfully for 05 years then I shall visit them again. From the day of the inauguration of the CLF, I was wondering what will happen to the CLF after 05 years? This September, I am done with my 05 years of waiting period and planned my visit to Anandpuri to understand the status of CLF and nothing can beat the season of Diwali if you plan to visit the beautiful Anandpuri. I must be thankful to my dear friends Udit and Nikita who are presently working as Young Professionals in RAJEEVIKA for sheltering me in Banswara and drove me to the far distanced field on their bike in early winter mornings.

It was a wonderful feeling to be there in the same CLF after years and greeted by the CLF members with the same old smile of happiness and aspiration. We were all settled down in that 10x10 feet room located within the old Gram Panchayat building in Chordi Panchayat that is presently renovated by the CLF and used as an office room of the CLF. I was a bit nostalgic as I had spent nights in this office when I was first posted here as "Cluster In-charge" for 03 months before given the charge of Block Project Manager- Anandpuri and coming back to the same office to understand the functioning of the community institution that too after the lockdown was very special to me. With all these excitements, we started our discussion, and Kavita Didi-CLF Manager and Urmila Didi-CLF Accountant took me through the present status of the CLF.

The CLF in Chordi cluster with 5014 women members (99% of members are from Scheduled Tribes with Below Poverty Line category) from 466 Self Help Groups spread over 36 villages of 08 Gram Panchayats. It was initially funded by the RAJEEVIKA and gradually RAJEEVIKA has withdrawn its fund support from the CLF, but it is still providing capacity-building support to the CLF. From October 2018, the CLF is taking care of all its expenditure from its income that majorly includes staff salary and administration cost and successfully rotating the funds as a loan to SHG members through its ground level institutions like Village level Organisations, SHGs.

The sustainability of any CLF or community institutions that lending loan to its members to strengthen their livelihoods activities or to start new income-generating activities depends on factors like intuitional governance systems, membership size, budgeting and cost management, rotation of funds among the members as a loan, timely repayment of the loan by the members, finding new opportunities of earnings while serving as a one-stop-shop for the poor and last but not the least collective-action through institutional representation to unlock the credits/ loans facility from formal institutions like local banks for its members. During my visit to the CLF, I tried to understand how they are managing their financials and other systems to keep themselves sustainable and profitable.

The major monthly expenditure and income of the CLF are as follows (as recorded by the end of September 2020):

 With a monthly net income of Rs.2,06,862.00 (as recorded for the month of September 2020), the CLF looks financially healthy and maintained its books of records properly. This all-women staffed CLF too faced loan repayment problems during the lockdown. The sudden announcement of nationwide lockdown by the Government of India had caught both the community and the CLF unprepared. Because the lockdown was announced on 24th March 2020, the CLF had to cancel its second meeting that majorly focuses on the collection of loan repayment installments that was scheduled by the end of every month. So, for the month of March 2020, the CLF failed to receive any repayment of the loan from the SHG members through its SHG and Village level Organisations. The trend of zero repayment rate continued in April and in May 2020 some of the Village Organisations have collected repayment installments from their SHGs and started repayment to the CLF. The CLF's month-wise collection vs demand against the outstanding loan has gradually improved and for the month of September 2020, the collection against the demand stands at 84%. For the month of October 2020, the CLF is anticipating 95% collection vs demand against the outstanding loan amount. A month-wise collection vs demand of the CLF is given below:

During the lockdown, the CLF had failed to organize meetings on regular basis and that was one of the major reasons for the negligible repayment rate. The CLF has reported that during the lockdown SHG members taken loan for livestock and agricultural activities were able to repay the loan amount partially whereas those engaged in non-farm activities like small tailoring shop, tiffin center, puncher shops, beauty parlor, etc. are still facing a tough time to repay the loan. During the lockdown, the CLF had paid half salaries to its staff for continues 03 months and provided 06 months of mortarium period to its members for repayment. 

Till September 2020, the CLF has given a total loan of Rs.4,18,20,000.00 as Community Investment Fund (CIF) to 91% of the SHGs for further loaning to the SHG members. CIF is provided to the SHGs, routed through the Village level Organisation, and maintained in perpetuity by the Federations. The SHG uses the CIF given by the CLF to advance loans to the SHG members. Other than this CIF support, the CLF has also facilitated formal loans from local banks amounting to Rs.2,15,00,000.00 (approx.) for 76% SHGs. Total loan amount of Rs. 6,33,20,000.00 that includes CIF to SHGs through grants received from the RAJEEVIKA, CIF to SHGs through internal rotation, and bank loans facilitated for SHGs, the CLF has abled to provide and facilitate an average loan size of Rs.12,628.00 (approx..) for each SHG member.

When we closed the discussion on books of records, the CLF Manager had told me that some of the CLF members are keen to fight the next Sarpanch election. She fondly told me that the CLF leaders have better reach at the grassroots level compared to any Sarpanch in that area because of the Village Organisation and SHG structure that connects every household with the CLF. She assured me with some data written in her register that now there are no eligible households left out from the SHG fold. To me after 5 years, today, the CLF is now standing as a symbol of the community's collective action, cooperation, democratic values, accountability, ownership, and women empowerment. I have seen Urmila Didi then worked as VOA (Accountant for a Village level Organisation) was struggling to write meeting minutes register and today she is writing over 10 registers of the CLF that is rotating Rs.4 crores of loan amount among 5000 SHG members with an average monthly cash flow of Rs.10 lakhs & above. I have seen the ultimate confidence on the face of Kavita Didi, who was explaining to me how the CLF took the initiative and repaired the office ceiling, electrified the office, and renovated the toilets. We fondly remembered those days, 5 years back when we used to charge our laptops in Anandpuri block (35km. away from the CLF office) to do the office work in the daytime, used to shift our one table- two chair-one almirah to nearby SHG member's house during heavy rain due to poor ceiling and used to put a notice saying that this office doesn't have a toilet. Things have changed, and this change is so welcoming. Starting from the CLF's office-bearers to its staff to SHG members, this is an all-women community institution that is working for the socio-economic development of the local community. What caught my attention the most is that the CLF is still functioning and stay alive on the ground even after multiple changes happened in project staffing and leadership at the RAJEEVIKA level. I wish to give the credit to the Community Resource Persons (CRPs) then came from Andhra Pradesh for establishing such a strong internal governance system within the CLF including the books of records. These CRPs have provided the initial training to the community on CLF formation.

At present, the CLFs in Rajasthan are well recognized by the local community as a community-owned microfinance institution with a moral obligation to serve the most vulnerable first. No doubt that CLFs have done extraordinary work in the areas of capacity building, social inclusion, social development, and financial inclusion that has organized the poor under one institution and safeguard or financed their existing livelihoods opportunities. With such vast experience in community mobilization and financial inclusion, the CLFs may think to move forward to promote its members as entrepreneurs from livelihood earners. It is well evident that during the lockdown, when Mahatma Gandhi NREGA has provided rural employment and the community institutions like SHGs, Village level Organisations, CLFs have provided liquid money (loan) to its members to not only sustain their livelihoods or enterprises but also provided consumption support. The success story of community institutions/ federation of SHGs is not only limited to Rajasthan but, I have experienced such success in other states like Kerala, Andhra Pradesh, Odisha, Bihar, Jharkhand, and that to be in their tribal areas.

After spending a wonderful day in Chordi CLF, when I was returning to Banswara town to catch my bus to Jaipur, sitting on the back seat of Udit’s bike, I was looking into the beautiful landscape not only full of natural beauty but also filled with energy, hope, and aspiration. When the entire world is trading off between ‘growth’ and ‘development’ here in Chordi, a women-led community institution is creating a ‘proof of concept’ on 'collective action for poverty reduction' that is based on the democratic values of participation, cooperation, coordination, mutual respect, accountability, responsibility, and ownership to improve the quality of lives.