I was invited by AARDO (Afrcan Asian Rural Deelopment Orgnisation) to address a National workshop in Namibia from 10-14 June'19. This is a presentation I used there. (for economy of size of file, the videos which were hyperlinked have not been uploaded)

1. WELCOME TO
a presentation on
SELF HELP AND GROUP MODELS
FOR SUSTAINABLE AND
INCLUSIVE DEVELOPMENT
D V Deshpande
Professor, VAMNICOM, Pune (India)
dvdesh@gmail.com
+91 9919225539
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2. Session coverage
 Philosophy of “Self help”
 Self help Group approaches:
 Self Help Group (SHG)
 Joint Liability Group(JLG)
 Farmers Club
 Farmer Producer Organisation (FPO) or Producers Organisations (PO)
 Cooperatives
 ROSCA
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3. India
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INDIA to NAMIBIA!!

4. What comes to your mind when
I say India!
• Mahatma Gandhi:South Africa shaped him 1893-1914
• Modi?
• Taj Mahal
• Biryani
• Fast developing?
• Biggest democracy
• India has tried several models of development of
different sectors… Perhaps Namibia can learn from
them!
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5. AARDO & VAMNICOM
• AARDO- (African-Asian Rural Development
Organization) is an autonomous inter-governmental
Organization comprising governments of 31 ountries
of Africa and Asia Website: http://www.aardo.org
• An example of “South-South cooperation” in
rural development in the Afro-Asian region
• VAMNICOM (Vaikunth
Mehta National Institute of
Cooperative Management)- a training,
Education, research & consultancy
Organization of Govt of India
Website https://vamnicom.gov.in/
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6. The spirit of Self Help
• Haven’t we heard ?
 “I” versus “We”- “My” versus “Our”
 “Narrow selfish interest” versus “helping
others” by sacrificing personal gains
 “One for all and all for one”
 “Unity is strength”
 “United we stand and divided we fall”
 Man is a social animal
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7. But when we talk of today’s society,
things are not that simple…
Hence the Government is expected to create enabling
environment By
• Creating a legal framework
• Creating institutionl framework for technical &
managerial and financial support- national, provincial,
district level, village level
• So it is Government facilitated self help
• But why sould government do it?
• Because Govt can’t do each and every thing in every
town & village
• If the activity is participatory, it is likely to be
sustainable & in “auto mode”
• Govt. funds /initiatives can have “multiplier effect”
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8. Self help Group approaches
 Self Help Group (SHG)
 Joint Liability Group(JLG)
 Farmers Club
 Farmer Producer Organisation (FPO) or
Producers Organisations (PO)
 Cooperatives
 ROSCA (Rotating Savings and Credit Associations)
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9. Self Help Groups (SHG)
• “Are poor bankable”? In 1976, Prof. Dr. Muhammad
Yunus came up with a Group Lending Program known as
the Grameen Bank (literally the Village Bank) in
Bangladesh for the first time.
• An experiment in giving credit to the poor without any
collateral.
• He felt that if financial resources can be made available
to millions of small people with their millions of small
pursuits, it can add up to create the biggest
development wonder
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10. SHG contd..
• India followed a different model of “Self Help Groups”-
SHGs –focusing on own savings as starting point
• SHGs are Informal groups of 15-20 members – mostly
women- socio-economically homogenous groups
• First save & do “internal lending”-
• Lend out of own funds to their members & recover
• There is a social guarantee- each member assuring
repayment for others
• The group opens a savings account in a bank
• After 6 months, bank give them loan- 4 times of saving
amount as a credit limit
• The group is free to use the money for consumption or
production purposes
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11. SHGs of women in India
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12. 13

13. What has been the progress
• Over 100 million are members- 85% women
• Savings INR 195 billion (USD 2.7 billion)
• Loans disbursed INR 0.76 trillion (USD 10 billion) by all
banks- average around USD 2000
• Involved in variety of activities:
• Internal Lending
• Financial intermediation by bank linkage
• Economic activities: banking agent, food preparation,
catering, farm machinery custom hiring, dairy, grocery
shop, parking lot, toilet/building construction,
vegetable marketing, horse for marriage!
• Our Prime Minister directly interacted with SHGs
 PM interaction
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14. What has been the role of
Government agencies?
• Development Bank- National Bank for Agriculture &
Rural Development (NABARD) supported NGOs to
facilitate SHG formation
• Central Bank allowed opening of accounts of
informal group- first time in the world
• Government of India created “National Rural
Livelihood Mission” (NRLM) and a facilitating
structure
• Government introduced interest subsidy to improve
viability of SHGs
• Facilitated marketing of products
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15. National Rural Lielihood Mission
Website (https://nrlm.gov.in/)
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16. 17

17. In Namibia
Potential:
• Train SHG to manufacture bricks
• Train another SHG to construct toilets
• Train another SHG to construct houses
• Train another SHG for poultry
• Train another SHG for tourism
• SHG/ Labour cooperative for de-bushing
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18. Joint Liability Groups (JLG)
• Informal groups of 5 members – mostly farmers-
socio-economically homogenous groups
• Borrowers goups- saving not compulsory
• The group asks a bank to give them loan
• Amount depends upon credit worthiness
• Now we have formed 3.5 million JLG with cumulatie
loans of INR 410 billion (USD 6 billion) with good
repayment
• NABARD supported NGOs & banks to facilitate JLG
formation
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19. Farmers Club
• Informal group of farmers at the village level who join hands
for using the principles of “Development through credit”
• The five principles are:
• Credit must be used in accordance with the most
suitable methods of science and technology.
• The terms and conditions of credit must be fully
respected.
• Work must be done with skill so as to increase
production and productivity.
• A part of the additional income created by credit must
be saved.
• Loan installments must be repaid in time and regularly
so as to recycle credit.
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20. Farmer Producer Organisation
or
Producers Organisation
The farmer is the only man in our economy who buys
everything at retail, sells everything at wholesale, and pays the
freight both ways. John F. Kennedy
It is a collective of primary producers- 500-1000 in India (In
Namibia- need to decide?)
is a legal entity formed by primary producers, viz. farmers, milk
producers, fishermen, weavers, rural artisans, craftsmen or
dealers in products or bi-products of primary produce
A PO can be a producer company, a cooperative society or any
other legal form which provides for sharing of profits/benefits
among the members.
To facilitate formation, NGOs are supported by NABARD and
Govt of India
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21. What is Government agencies
support ?
• Amended Companies Act to include a clause for
such Producers Organisations – which are registered
as companies
• Created a fund for supporting Producers
organisation and gave to NABARD for expanding
• Assigned task to another agency- “SFAC”- (Small
Farmer Agri Business Consortium) for facilitating
• Created Credit guarantee fund – covering upto INR
10 million (USD 1,50,000)
• Created Equity fund for contributing to equity
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22. Progress
• Almost 4000 such companies registered
• Activities
• Bulk purchase of inputs and supply to farmers
• Purchase produce
• Value chain
• Help farmers generally
• A basic video about FPO
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23. Cooperatives- one of the most
inclusive and sustainable model
“By the people, of the people and for the people”
7 Internationally accepted principles of cooperatives
1. Voluntary and Open Membership. ...
2. Democratic Member Control. ...
3. Members' Economic Participation. ...
4. Autonomy and Independence. ...
5. Education, Training, and Information. ...
6. Cooperation Among Cooperatives. ...
7. Concern for Community.
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24. Government role in cooperatives
• Created an Act – legal framework – Coop. Societies
Act
• Created an institution – Registrar of Coop. Societies
• Always supported the coop movement by financial,
administrative, technical support
• Now there are over 800000 cooperatives covering
credit and large number of non credit activities
• Coop. society can become “one stop shop”
(providing several services)- “Multi Service Centre”
• A good coop- AMUL dairy (19 min)
• Mulkanoor multipurpose coop. (11 min)
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25. Institutions for facilitating and
supporting
• Government of India, State governments (Registrar of
Cooperative Societies)
• National Bank for Agriculture and Rural Development
(NABARD)
• National Cooperative Development Corporation (NCDC)
• National Cooperative Union of India (NCUI)
• National Council for Cooperative Training (NCCT)
• VMNICOM
• National Dairy Development Board (NDDB)
• FISHCOFED (National Federation of Fisheries
Cooperatives Ltd. )
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26. ROSCA (Rotating Savings and Credit
Associations)
• Informal Group of people – 10-40- join for every month
saving and th collected fund is offered to any needy member
• Popular with ladies , traders, etc
• Interest/ dscount may or may not be charged
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27. Financing development
At present everything is grant!
But everything need not be grant! It is country’s
precious resources-
Could you consider different form of support?
Where grant is justified?- you can define…
For example –Grant can be provided for activities which
don’t generate income, drought relief, sanitation
But for the income generating activities – is grant
justified?
The problem with grant is it is not sustainable
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28. Type of finance for any ativity
Grant (or subsidy), Equity, loan
• It is a Continuum
 100% Grant---------------------------------------100% Equity
• Part grant,part loan
• Part Grant, Part own contribution (equity) & part Loan
o Example: 30% grant, 10% own equity, 60% loan
• Loan
 On commercial terms
 Soft loan- interest free loan/less interest rate
 Govt can:
 Develop policies to persuade banks to lend to “Priority Sectors”
 Create specialised agencies
 Create risk fund / guarantee fund, refinance arrangement
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29. Ideas which might work in your
situation
• Kisan Credit Card (Farmer Credit Card)
• Farmers clubs
• Self help groups (SHG)
• Joint liability Groups (JLG)
• Business correspondent (BC)
• Business Facilitator (BF)
• Agent banking
• Primary society becoming “one stop shop”
(providing several services)- “Multi Service Centre”
• Farmer Producer Companies /Producer Organisation
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30. THANK YOU!
Namaste –Indian way of thanks &
greeting
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