Why Do People Not Join or Drop Out of SHGs?

Abstract:

MicroSave conducted this study to assess the reasons for women not joining or dropping out from Self Help Groups (SHGs) in Andhra Pradesh, and to provide recommendations to financial service providers to address the issues and concerns of clients by devising appropriate solutions.

A variety of reasons for not joining SHGs were uncovered including: villagers were not approached by staff of SHG promoting institutions;  newly-wed women do not have the documentation to open bank accounts or were prohibited from joining an SHG by their husband or his family; others were not able join any SHG because they were not aware of the process to do so; people who temporarily migrate for work each year were also excluded; and in some cases existing SHG members did not agree to allowing others to join their groups for fear of spreading the benefits of membership (primarily government subsidies) too thin.

Similar and other reasons drive drop-out from SHGs including: migration - for work or marriage - takes people away from their groups;  to avoid joint liability, members also leave SHGs when one or more members of the group default on the loans; poor bookkeeping leads to disputes, these and other social conflicts within groups also lead to drop-out from groups; and some members found the group meetings and rules simply inconvenient and decided to leave their SHGs.

Many of these causes can be addressed by government, banks and self help group promoting organisations - the report concludes with a review of how these organisations might respond to the challenges and opportunities it outlines.

Tags: Respondents profile, Loan repayments, Savings, Interest rate, Microfinance, Market research (qualitative) , Self help groups, SHGs, India, South Asia, Loan purpose, Case study, Focus group discussion, FGDs, Market research, Financial service providers