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Coronavirus outbreak: How were 7,200 new self-help groups formed amid social distancing constraints?

The question perplexing  financial inclusion experts is how could these be formed when there are compulsions of social distancing

twitter-logo E Kumar Sharma   New Delhi     Last Updated: May 14, 2020  | 21:01 IST
Coronavirus outbreak: How were 7,200 new self-help groups formed amid social distancing constraints?
SHGs are formed with people physically coming together

Finance Minister Nirmala Sitaraman's announcement on Thursday that 7,200 new self-help groups (SHGs) were formed in the last two months of lockdown is baffling financial inclusion experts. The question perplexing them is how could these be formed when there are compulsions of social distancing.

Typically, any SHG group promoting agency - be it a state government department, a field staff or an NGO staff -  goes to a poor locality and collects about 15 to 20 women to form a group. They meet and name the group, select a leader, agree on a meeting schedule - either every week or every month. In short, SHGs are formed with people physically coming together, the way it has traditionally happened. The other option could be by electronically connecting all. If that is the case, then it certainly could be an example of new groundbreaking effort.

Even if it has been done, the financial inclusion experts see it as a trivial increment given there are 100 lakh SHGs with some 15 crore women. 7,200 SHGs would amount to about 0.07 per cent increase. Even at about 15 women per SHG, it stands at one lakh women in all, as per the back of the envelope calculations. Considering each got around Rs 5,000, the sum total would be in the region of just Rs 50 crore.

Those in the microlending space also find it baffling since many micro-finance institutions (MFIs) were not able to send field staff to villages. Most women in rural areas were busy attending to agriculture work because it was harvest season for cotton, chillies and paddy. Similarly, those in other activities such as dairy were engaged on a full-time basis as earlier. In addition, some villages were not allowing outsiders and putting up barricades.

Also read: Coronavirus Live Updates: Delhi records 472 cases in 24 hours, highest single-day spike; India's cases-78,003

Also read: Rs 4.5 lakh crore to Rs 8 lakh crore! Rise in sovereign guarantee comes with hidden risks

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