Why are SHG women struggling with NPAs?

Sabrang India looks into why NPAs present themselves as such big challenges to SHG women.

Self-Help Group (SHG) women

Self-Help Group (SHG) women hope that the Ministry of Rural Development would repeal its recent decision to collect their Non-Performing Assets (NPAs) in light of the recent coronavirus pandemic.

The government decision had attracted much criticism from as many as six women organisations who pointed out that the Central government had offered the women no help during the Covid-19 lockdown. The organisations at the time had asked the government to withdraw its decision. However, Town-level Federation SHG’s Shashikala hoped that the government could waive the NPAs altogether.

“We were thinking of asking the government to waive the NPAs because nobody can get work during Covid-19,” she said. The social worker hoped that the Telangana government would at least agree to the request until the pandemic blew over. However, since their previous request of interest-free loans was yet to be fulfilled, they had not made a decision as of yet.

Why do SHG women have NPAs?

According to the General Secretary of All India Democratic Women’s Association (AIDWA) Mariam Dhawale, SHG women’s NPAs can be explained due to want of proper infrastructure, marketing facilities and training camps during the pandemic.

She traced the problem to the point in time when the government brought SHGs under the State Rural Livelihood Mission instead of individual departments of the various Ministries. Under the SRLM, women were given livelihood opportunities at anganwadis and ration shops but did not receive loans interest-free.

Moreover, women had to pay for subsidised grains for PDS, anganwadi foodgrains themselves since the government did not provide the necessary infrastructure or even storage facilities. Thus, they could not make money for repayment of loans. The government money that did come their way, arrived late. As a result, the women failed to pay their dues on time and ended up being blacklisted by the government.

The situation worsened when Micro-Finance Institutions (MFIs) came in. Women took money from them thinking the divided burden of loan would ease their problem. However, the responsibility of shared loans only added to worries and benefitted the MFIs instead.

According to an AIDWA booklet, despite government proclamations regarding moratorium on loan instalments, MFIs lured poor women into taking easy loans with high interest rates and then pressured debtors for payment of instalments. They even frequently sent “loan recovery agents” to the homes of these women to threaten and harass them for payments. The booklet also reported incidents where the agents demanded sexual favours to defer the payment of instalments.

After lockdown, women did not receive any relief from the government. Some women died by suicide in the repayment process while others ran away from home. Even after agitations, the Centre increased loans collateral-free but did not make them interest-free.

At the State-level some governments such as the Andhra Pradesh government waived loans after relentless SMSs from the state’s SHG women begging for help. The Chief Minister offered to pay their loans.

However, in states like Telangana, the bank pressures the government to get the NPAs, said Telangana-AIDWA President Ashalata. This, she said, despite the fact that the state government had promised interest-free loans upto Rs. 10 lakhs in their manifesto but failed to do so.

“Loans are very important for these women because they need it to start their business. However, it is very hard for SHG women to get loans here because it is only given to groups of 10 members,” she said.

Are SHG women an asset to the government?

Dhawale said these women serve as great assets especially in the fight against COVID-19. She gave the example of Kerala’s Kudumbashree Mission where women gave food to the poor during the lockdown period while working in common kitchens.

Similarly, as per a press release, the Ministry of Rural Development had offered a similar contract to SHG women under the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM).

The press release dated April 12, 2020 termed “the approximately 690 lakh women members of around 63 lakh Self Help Groups (SHGs)” as “community warriors” who contributed to the containment of the virus.

“As the masks were the first line of defence against COVID-19, SHGs immediately took up the task of production of masks. Various categories of masks including 2-3 ply woven and non-woven surgical masks, cotton masks etc. adhering to the advisories of Ministry of Health and Family Welfare (MoHFW), Ministry of Consumers’ Affairs and instructions of Health Departments from the states are produced by SHGs,” said the statement.

These masks were supplied to the health department, local administration, front-line workers, police officials, as well as open markets. They were also distributed free to the rural households in many states. Additionally, SHG members had also started making Personal Protective Equipment (PPE) like aprons, gowns, face shields etc.

On the other hand, the Non-Performing Assets of SHG women accounts for only two percent of the total NPAs. Moreover, they also have the best record for loans repayment – a fact that is accepted by the government as well. This raises the question of why the government is asking for repayment of loans from women at a time when people are hard-pressed for money.

“You are writing off loans for big corporates, why not provide assistance to these women,” asked Dhawale, pointing out that such a decision makes the government come across as “totally insensitive.”



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