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Micro-credit Project

Rajasthan is one of the 'poor states' in India, with a per capita income below Rs 1,900. In terms of the extent of bankisation (i.e. No. of bank branches per lakh population), the figure indicates an unfavourable situation for the state. The number of scheduled commercial bank offices per lakh population for the state is 6.6, which is less than the national average of 6.9. In Rajasthan, more than three-fourth workforce is cultivators and agricultural labourers. Females constitute around two-thirds of the total workforce. The male population in the rural areas is mainly engaged in the agricultural sector and wage-based employment, both farm and non-farm.

The women of the rural areas are mostly 'marginal workers'. They remain unemployed during non-agricultural/drought seasons. People migrate to the neighbouring districts and states in search of work. The poor people mortgage their properties and borrow money from the local moneylenders. They fail to pay back the borrowed money within the stipulated time and get into the debt trap. In some cases, people work as bonded labour to payback their loan. The lack of financial institutions in the near vicinity has worsened the situation. People require money for household and emergency works. They look for sources where they can easily get money with least paper work. Moneylenders lend them money at higher interest rates.

Core Problems of Bhilwara and Chittorgarh Districts:

  • Unemployment among youth

  • Discrimination based on sex, class and caste while providing jobs;

  • Low awareness of availability and benefits of services;

  • Lack of co-ordination between government departments;

  • High migration level;

  • Lack of livelihood opportunities;

  • Lack of available jobs;

  • High deforestation and degradation;

  • Low agriculture production;

  • Lack of water resources;

  •  Low literacy rate; and

  • Poor infrastructural facilities.

In this context, Micro-financial Institutions (MFI), like Self Help Groups (SHGs), would benefit people and help them to lend money for their emergency works, without mortgaging their properties. As members are the decision-makers and they have their own byelaws to run the institution, the process will empower poor people.

CHD believes that SHG is not only about lending money but a platform to deal with issues like food security, health, education, housing and other livelihood related matters. It is a platform to empower women and give them the opportunity to participate in the decision-making processes. The Centre has already successfully implemented an SHG project with the support of the National Bank for Agriculture and Rural Development (NABARD). Under the project, it has formed 200 SHGs in Mandalgarh and Banera blocks of Bhilwara district.

 

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