We sincerely hope that our readers will pardon us for this belated May 8 issue of Seva Sandesh. In this issue besides an article on SHG’s describing its potential reach, we would be proud to appreciate the yearlong efforts by volunteers of YFS – Banglore in teaching the underprivileged and gain valuable insights about the much acclaimed Chitrakoot model of holistic development.
We share with grief the news of sad demise of Shri. Vishnukumarji who relentlessly worked, for about 30 years, to build a strong network of Sevakaryas in Delhi and M.P. Seva Bharati Delhi and Madhya Pradesh are the living testimony of his untiring efforts, zeal and ability to motivate thousands of workers with personal example. Vishnuji, as he was fondly known, was truly seva personified. He breathed his last on May 25, 2009 in Delhi. We pray the Paramatma for eternal peace of the departed soul.
Youth for Seva Volunteers’ Appreciation Day 2009, held at Jayanagar, Karnataka
An annual event for Youth For Seva, "Volunteers’ Appreciation Day" was held at RV Teachers college, Jayanagar, on 11th April 2009. Youth for Seva had collaborated with Times of India Campaign "Teach India", last year to beget thousands of volunteers, who were trained and assigned to various teaching projects in Govt. Schools and Study centres in slums, all over Bangalore.
In conclusion to the academic year of 2008-09, YFS held this meet for volunteers wherein their work was appreciated and certificates were distributed. The chief guest of the event was Dr.S.K Maini, the founder of Maini group of Companies which manufacture REVA car, who is well-known himself for his work in the field of social service.
The event was participated by around 300 volunteers and friends of YFS. It was also organised and conducted by volunteers who put up social awareness skits, displayed documentary on YFS work, presented highlights of year 2008-09 and future plans for 2009-10. The audience were enthralled by the feedback from couple of volunteers and representatives of NGOs, who were supported by YFS volunteers. They went on to say that the active work by YFS is a blessing of satisfaction for them and a motivation for the youth and also a hope for the underprivileged and underdeveloped sections of society. YFS work and its innumerous volunteers were appreciated by one and all, including Dr.SK Maini, who mentioned that our country is slowly forgetting its cultural values under the influence of the western world; praised YFS for its values and ethics. He also said that the major part of the country is in the rural and we need to protect and develop them. Prof.Vaidyanathan from IIMB admired the work of volunteers and the vision of YFS to send volunteers to other countries. The event was concluded by a recitation of "Vande Mataram" in its glory, which was revered by one and all, in their silent standing, in solemn thoughts of duties or seva for our country.
SHGs And Development of Microfinance
Financial inclusion of the poor can only be possible if the MFIs inculcate a habit of savings and come out with insurance products covering various risks.
Delivery of credit at the doorstep of those who are not covered by the formal banking business, coupled with capacity building, is one of the ways for achieving financial inclusion. Such a financial inclusion of the poor can be more fruitful if the credit disbursed can help them become entrepreneurs than meeting only their consumption needs. The process can also be accentuated if the disbursing microfinance institutions (MFIs) inculcate a habit of savings by attracting deposits and come out with insurance products covering various risks.
The Nobel Laureate from Bangladesh and the founder of the Grameen Bank movement, Muhammad Yunus, has termed the microfinance disbursement as “a social business” in contrast to the commercial business of banks and financial institutions. There should be a separate regulatory authority for MFIs as distinguished in character from that for the commercial banks. The regulatory authority for MFIs should evolve guidelines keeping in view the objectives of socio-economic development of the poor, he suggests.
According to Yunus, MFIs should be self-sustaining, be allowed to attract deposits, provide insurance and pension fund, and should be capacity building.
If MFIs are owned by borrowers, there should be no payment of licence fees. MFIs can source funds from banks. He is, however, not in favour of MFIs sourcing funds from outside the country. Funds should preferably be mobilised and distributed locally, he opines.
The interest rates should preferably be lower. MFIs should ultimately be owned and operated by borrowers, as is in Bangladesh. There should not be any scope for individual profit in MFIs. All profits should be ploughed back in the MFIs for meeting the costs of transactions, he suggests.
According to Yunus, this is the right time for the microfinance movement to grow and spread in India. It can counter the adverse impact of the current global financial crisis and provide jobs and self-employment to many.
He holds the global banking and financial institutions responsible for the current global economic crisis as they have befooled the investors via mere paper transactions. “Banking regulations should clearly distinguish between gambling and business. There should be proper in-built mechanism to prevent the business from running into trouble and insurance schemes should be in place for protecting deposits. The government should not bailout these institutions by doling out public money,” he says.
The microfinance institutions should cater to the ‘real economy’ and livelihood of millions of poor. The developing countries like India and Bangladesh have been largely insulated from the adverse impact of the current global financial crisis due to the presence of the ‘real economy’, he says. In Bangladesh 80% of the poor are covered under microfinance. The remaining 20% are expected to be covered within the next two years.
India has been able to cover only 20% people under it and needs to speed up, he suggests.
In India, a Bill for regulation of MFIs is pending in Parliament since 2007. The proposed legislation has been delayed on the issue of lowering of interest rates. A joint secretary in the banking division of the finance ministry, Amitabh Verma, says the government is very keen on MFIs lowering their interest rates. The MFIs should carry out their operations without any subvention of interest rates by the government. Bangladesh has set up a regulatory authority for the Grameen Banks and another legislation for approval of MFIs as social banking institutions is pending for approval.
Citing a few instances of social business, Yunus said, students in Bangladesh were given loans, most of who have opted to become entrepreneurs after they complete their studies. Interest-free loans of 1,000 taka were given to 1,00,000 beggars, 15,000 of which have stopped begging and set up small business.. Loans without any interest was an exception in case of beggars. As a general principle, MFIs
should charge interests on loans to cover their transaction costs. Prudence suggests that cost of transaction should be minimised and interest rates should be kept low.
MFIs in India, however, allege that their interest rates are higher (mostly in double digits) as they have to cover the costs of transactions and capacity building. According to Amitabh Verma, bank’s refinance rates to MFIs are not likely to be less than 7%. Also, the government may not be in a position to render subvention on loans. Therefore, the MFIs should find novel ways for covering or hedging their costs.
MFIs apex body Sa-Dhan’s executive director Mathew Titus said; “The microfinance sector in India is going through a difficult and a challenging phase. Extraordinary growth, global credit crunch and increased awareness of social impact pose a challenge. It is an opportune moment for house keeping and clearing up concerns that have been around for a while. Growth and competition need to be addressed in the common spirit to serve the poor. Transparency is the key property that microfinance must subscribe to”
Microfinance in India touched the 33.6 million clients-mark in 2007-08, of which 14.1 million were served by MFIs, according to Sa-Dhan estimate. Other estimates put the client outreach at over 100 million. These estimates may differ but there is an unanimous acknowledgement of the fact that over 90 million low-income households still remain unserved. Therefore, microfinance must grow steadily and steeply. All indicators point to a flattening growth curve. However, these were computed before the global financial crisis and the growth path may even suffer a dent, according to some experts. This means not only unserved clients will have to wait longer but also the existing clients are likely to see their credit flow slowing down and shrinking.
However, microfinance can grow from the perspective of demand only if adequate resources flow to MFIs and self-help groups (SHGs). There are four main options for capital mobilisation --- grants, profits, savings and investment. Grants and profits, however, are unfeasible.
There is no possibility of a steep growth from grant –financing at this stage. In a given period, grants are just not large enough. The same holds true for profits that, in theory, can be generated from a granted corpus. If profits are huge enough, the organisation would either cease to be a community development finance by charging in excess of traditional moneylenders or serve non-poor clients. Savings could be a very feasible option, particularly in the long run. Only cooperatives are legally entitled to mobilise savings. Some of the experiences suggest failures of cooperatives. However, cooperative legislations in several states like Andhra Pradesh led to reforms in the cooperative model. The outcome is the legal form of MACS, which is the registration for many SHG federations.
There are about 75,000 SHG federations functioning in India and are an important avenue for managing an ever-expanding number of SHGs. The SHGs federate into a two or three-tier structures and take up a range of services, both financial and non-financial. They have so far not been included formally into the SBLP and have strong points in their favour like cost efficiency and democratic governance. Besides lacking exposure to these relatively new organisations, bankers often raise concerns about level of professionalism of federation management, viability of the business model including dependency on the self-help promoting institution (SHPI) and political interference. The idea of a national-level SHG federation is being debated to address the issue.
Bankers are generally comfortable in extending re-finance to the non-banking financial companies (NBFCs) because equity serves as a lever for credit.. Banks are usually concerned over the creditworthiness of MFIs and SHG federations’ portfolio quality, profitability, governance and viability of the business plan. Incidentally, the involvement of investment funds regularly brings about improvements in all these areas. Bankers rely more on existing systems and structures, though some emphasise on the merits of a long-term relationship, their loan terms are mostly 24 to 36 months. Therefore, it is essential that MFIs and SHG federations go for credit ratings. Meanwhile, Nabard has a scheme for subsidised credit rating for MFIs and SHG federations. --Ashok B. Sharma
The Chitrakoot Project: A Unique Self Reliance Campaign
Introduction:Even 55 years after Independence, and the expenditure of over Rs. 30,000 crore on rural development, the villages of India are in a sorry state. The progress of the villages has not been achieved as desired. The cherished ideals of Gandhi, the Father of the Nation, with regard to social reconstruction have not been fulfilled. The dreams of the illustrious Martyrs of our Freedom Movement for a reconstructed nation, remains as yet unattained. The development of our villages is of critical importance for the economic development of the country. The route taken by successive Governments for development through 5-year plans that evolve at the top and are to permeate downwards towards the villages have not been successful.
The Late Pandit Deendayal Upadhyaya extensively studied all the different aspects of human life and Indian society. Thereafter, he compiled his thesis 'Integral Humanism' on what requires to be done, as a model and guide for a harmonious and progressive society. The need of the hour is to achieve the overall progressive development of our youth by following this philosophy.
The human body consists of several parts - each integral to the other. The functions of each part vary from the other, and are all carried out with absolute precision, without any interruption, thought or doubt for even a moment. They are engaged solely in keeping the body secure, functional and
healthy. A healthy and strong body ensures that the requirements of every part of human body are duly met. 'Complimentarity' is the word Pt. Deendayal Upadhyaya had coined for the functional dimention of our body parts.
The relations between human society and its constituents, is similar to the relation between the human body and its parts, because the elements of society are also interdependent. The farmer produces food grains, vegetables and fruits that everyone in society consumes for sustenance. The weaver makes clothes for everyone to wear. Therefore, inter-dependence or complimentarily is the basis of a happy social life. Without fulfilling each and every essential need of society, neither an individual nor a family could pursue their respective careers or vacations with perfection and success. This is a natural law. Only if a social order is developed with in the framework of this natural law, would be possible to realize the noble objective embodied in the saying "Let everyone be happy".
The greatest problem with development work since Independence was the Districts and States - without people's participation. This ignored core local issues and the requirements of the particular area. It also ignored awakening a sense of ownership and initiative in the people involved. As a result, these cost-intensive rural development schemes were unable to achieve their objectives. As Pt. Deendayalji had said, "The process of development begins from the bottom and moves to the top. The roots of our nation lie in rural India. So the development of our society and country must begin from the rural area." People's participation and initiative in rural projects increase their scope, stability and success rate.
Objective: To give India a new direction is the need of the hour. People's initiative and local issues are a key component for any successful rural development program. Complimentarity and a social consciousness in society form the basis of a Nation's soul (Chiti). Without looking at the needs of a society in totality, no development program can succeed.
Deendayal Research Institute (DRI), set up in 1968 to validate the philosophy of Integral Humanism, is currently working on such a project. DRI's Chitrakoot Project is an integrated and holistic model for the development of rural India, based on the principles outlined in Pt. Deendayal Upadhyaya's Integral Humanism to create a society based on the complimentarity of the family, primary school and the local population. The Chitrakoot Project is a self-reliance campaign that was launched on 26th January 2002 and will cover 500 villages around Chitrakoot in 2 phases. The 80 villages taken up in the 1st phase will be self-reliant by 15-August 2005, and the remaining villages will achieve self-reliance by 26th January 2009. Deendayal Research Institute has been found to confirm to Quality Management System Standard ISO 9001:2000 in the implementation of the Chitrakoot Project.
The self-reliance campaign covers all aspects of individual, family and societal life of the villagers. The key to the campaign is the concept of Samaj Shilpi Dampati (SSD), 'graduate' couples who live within the villages itself, and are responsible for motivating and guiding a cluster of 5 villages.
Foremost among the aspects covered is income generation. This is achieved by introducing watershed and soil management techniques where necessary; new and improved farming technologies through 2.5 and 1.5 acre model farms that enable small and marginal farmers - to look after the family needs plus save; and by increasing Non-Farm Sector incomes through entrepreneur training and the formation of income-generating Self Help Groups (SHGs) that are both stand alone, and vertically integrated.
Issues of health and hygiene are the second most important aspect of the campaign, as an unhealthy individual is incapable of working to improve his/her economic condition. Regardless of the manifold benefits of Ayurveda and Naturopathy, Allopathic intervention - when the ratio of doctors to population is in excess of 1:10,000 and the cost of medicine is high — is common. Therefore, in issues related to health the Chitrakoot Project looks to Ayurveda and Naturopathy to keep villagers healthy. Locally available herbs and nutritional vegetable gardens are the key interventions used in this area, including a Dadi ma Ka Batua (grandmother's pouch), a collection of 34 Ayurvedic local herbs and preparations that can be used to treat common ailments. Where Ayurveda is not applicable, as for example in Dentistry, state-of-the-art facilities have been provided at Arogyadham,Deendayal Research Institute's Ayurvedic & Naturopathy Hospital & Research Centre at Chitrakoot.
Illiteracy and social consciousness is the third area covered by the campaign. A 'functional literacy campaign' developed by TCS is being conducted for the villagers by the Samaj Shilpi Dampati, Educational Research Centre and the 4 schools that operate within the Project area. The Smaj Shilpi Dampati work with the villagers on the principles of mutual co-operation to ensure that the village is litigation free, and also on personal and village hygiene to make the village 'clean and green'.
Deendayal Research Institute is confident that its reliance model, based on the universal principles of Integral Humanism, that is both replicable and sustainable, can be a model for the future of India as also for global development problems.
The Self-Reliance Campaign:: On 26th January 2002, villagers from 80 of the 500 villages that form the 1st phase of the Self-Reliance Campaign took the following oath: "We all the villagers, with mutual cooperation, will make our village self-reliant. By 26th January 2005, we will eradicate unemployment, poverty, and illiteracy from our village. Every Family of our village will become self-reliant and prosperous. We will see to it that no dispute of our village will reach the court. And all the old disputes will be settled amicably at our village level. We will also see to it that our village will become green and clean and will build our village into a model of self-reliance." In the 2nd phase of the project, the remaining 420 villages will become self-reliant by 26th January 2009.
Current Infrastructure: To enable the project to succeed, Deendayal Research Institute has established a host of institutions and centres to give inputs to the villagers for their success in the self-reliance campaign. These include:
1. Krishi Vigyan Kendra (KVK), Majhgawan (M.P.) - a 63 acre model farm that reaches out to farmers in the villages of the self-reliance campaign situated in Madhya Pradesh helping them to increase both farm and non-farm income through watershed management, improved sustainable agricultural inputs both on-farm and farmer's fields and training in various disciplines.
2. Krishi Vigyan Kendra (KVK), Ganivan (U.P.) - a 50 acre model farm set within a 150 acres DRI campus that reaches out to farmers in the villages of the self-reliance campaign situated in Uttar Pradesh helping them to increase both farm and non-farm income through improved sustainable agricultural inputs both on-farm and farmer's fields and training in various disciplines.
3. Arogyadham - The Ayurveda & Naturopathy Campus at Chitrakoot is the key centre for maintaining good health among the villagers. Within the 53 acre campus is:
a. Out-patient Department with modern diagnostic equipment.
b. In-patient Department for 40 patients.
c. A Maternity& Pediatric Centre with operating theatres and a neo-natal pediatric wing.
d. A Yoga & Meditation Centre.
e. A fully equipped Naturopathy Centre.
f. An Ayurvedic Research Centre for Ayurvedic Herbs and Preparations.
g. A modern Dental Unit.
h. An Ayurvedic Research Library.
i. An Herbal Garden.
j. An Ayurvedic Doctor Outreach programme.
k. An Herbal Remedies Kit (Dadi Ma Ka Batua) for treating common ailments.
4. Udyamita Vidyapeeth - A production-cum-training Centre that consists of a complex of over 19 industrial sheds, 4 hostels and an administrative block to impart training to villagers in various skills to earn. The Centre is actively involved in the self-reliance programmes and has innovated vertically integrated Self-Help Groups and the concept of one village-one product.
5. Suurendra Paul Gramodaya Vidyalaya - A comprehensive primary, secondary and high school situated in Chitrakoot that serves 1,000 students from in and around Chitrakoot.
6. Ramnath Ashramshala - A residential co-educational school for 200 tribal children located in Chitrakoot.
7. Parmanand Ashram Paddhati Vidyalaya - A residential co-educational school for 125 scheduled caste children located in Ganivan.
8. Krishna Devi Banwasi Balika Awasiya Vidyalaya - A residential girls school for 50 girls from tribal families.
9. Gurukul - A unique experiment that houses 80 children with retired couples in groups of 10 children that inculcates values in the children and helps them to study and grow in an inspiring atmosphere.
10. Chitrakoot Ras Shala - The in-house Ayurvedic pharmacy that caters to the medicinal needs of Arogyadham as also markets 35 Ayurvedic preparations.
11. Gramodaya Darshan Park - A permanent exhibition where all the innovation and interventions used in the self-reliance campaign can be seen in working models as also other innovations that could be used in villages.
12. Govansh Vikas Avam Anusadhan Kendra - The Gaushala in Chitrakoot is engaged in maintaining pure Indian breeds; research in cross breeding of Indian cows; as also an A.I. programme for improving the livestock yield and bullock performance in the villages in the self-reliance programme.
13. Resource Centre - Controls the inputs of the Samaj Shilpi Dampati - the 'graduate' couples that live in the village and serve as the catalyst of change in the self-reliance campaign. They are the nodal point through which all interventions of DRI flow to the villagers in the self-reliance campaign.
14. Educational Resource Centre - Innovates new educational aids for schools and adult literacy, is currently starting a TCS developed Computer Based Functional Literacy (CBFL) programme in the 80 villages.
15. Ramnath Goenka Smarak - A public bathing ghat for the people of Chitrakoot on the banks of the holy Mandakini river with separate enclosures for men and women.
16. Ram Darshan - a unique museum to inculcate the social values and ethics embodied in the concept of Ram Rajya, using paintings, bas-relief and dioramas to depict socially relevant scenes from Lord Rama's life.
“We do not live for ourselves but for our oppressed and neglected brethren”