The Tamil Nadu Women's Development
Project (TNWDP) has considerable achievements. It has almost reached
the quantitative targets of loans disbursed and has overachieved
by 40% the number of groups to be formed specified in the Appraisal
Report. Its strongest positive points are the following:
iii) When the Non-Governmental Organisations (NGOs) involved in the
project, and the bank's branches allowed groups to rotate their savings
as small, flexible, internal loans for a minimum of one year, group
members were able to develop a "repayment culture".
iv) The recovery rate of bank loans is excellent due to the extensive
support system developed by the project. This has demonstrated that
banks can give loans to women's self-help groups and enjoy high repayment
rates. As a result of this positive experience, the Indian Bank is now
in the process of experimenting with a scheme that will further decrease
transaction costs through investment group lending.
v) Despite initial difficulties, good coordination has been established
between the Government, the Tamil Nadu Women's Development Corporation
and officers from line departments, the Bank and the NGOs.
vi) There is evidence of considerable social impact of the project
on women, especially in well functioning, homogeneous groups of very
poor women, in which women report a greater degree of self-confidence,
greater mobility, and greater ease to visit banks and to converse with
different officials visiting the village, compared to what was the case
before group formation.
The project has placed very heavy emphasis on loan disbursement and recovery,
almost to the neglect of beneficiary training. A key reason for this to
happen has been that NGOs are paid on the basis of the number of beneficiaries
that get loans from the bank. Furthermore, the overemphasis on land-based
activities has limited the inclusion of some of the poorest women.
In view of the fact that up to December 1994, on the basis of claims
filed the project has utilised only 34.63% of available project funds,
and given that the perception that "the project is coming to a close"
is creating uncertainty among the project staff, some of which are looking
for other opportunities (the same being also the case with the concerned
NGOs), the Mission recommends the extension of the project for another
two to three years, without additional funds but with the condition that
the following changes in the overall strategy of the project will be immediately
implemented:
i) Additional targets are set referring to the number of well functioning
groups with high member solidarity and cohesion and an active participatory
process and to the training of beneficiaries in group dynamics and participation
skills as well as in practical, technical skills.
ii) The emphasis is no longer placed on creating new groups but on
the consolidation of existing groups and on the improvement of those
groups to be classified in the second and third best category (according
to the criteria proposed in Annex 1 of this report). The Mission recommends
that no more than 600 new groups are created from 1 April 1995 to 31
March 1996 and that those groups are limited within the villages already
reached by the project. After 1 April 1996, it is recommended that no
new groups are created because it is important, from the point of view
of sustainability, to give to new groups the full benefit of all project
services and resources. Half of these groups should be entirely made
up of landless women and the other half should be representative of
the different types of truly poor women.
iii) The needed adjustments to group size should be made in the following
fashion: (a) groups with up to 20 members are left as they are; (b)
groups with over 20 members should be allowed to divide themselves into
groups of no more than 20 members, in such a way that group homogeneity
is increased.
iv) There is a need to diversify the profitable productive activities
for which loans are available to women in order to increase women's
awareness and empowerment. Poor, illiterate village women have a very
limited exposure to productive activities beyond milk cows, sheep and
goats. This diversification, however, needs to be based on the results
of good market research undertaken in the different localities of project
concentration. The project is advised to avail itself of market research
capability on a contractual basis.
v) Banks should allow the groups to withdraw their savings, after completion
of three months for the purpose of extending small, internal loans.
Also applications for bank loans should not be accepted before a minimum
of one year of high loan-savings ratio through the rotation of small,
internal loans to a large number of group members.
vi) The Capital Development Fund (CDF) of Rs.7500 should be handled
as a grant to the group.
vii) All attempts to create some kind of group federation should not
be undertaken until the groups have attained a mature level of functioning,
appreciate themselves the importance of such federation, and are in
a position to control it. The present experience indicates that such
federations should limit themselves to a social and information sharing
role, refraining from playing any kind of financial role. The mission,
therefore, recommends that all financial contributions already made
by the groups to any type of federation or cluster be returned to the
groups (as well as interest payments made for the CDF).
viii) The Mission recommends that the basis for payment for NGO services
needs to be changed. From now on, they should be paid exclusively on
the basis of number of beneficiaries trained in group dynamics and/or
in technical skills.
ix) Taking into consideration the pattern already set during the fourth
year, starting from the fifth year the type and size of payment extended
to animators should be up to the individual group and on the nature
of services rendered.
x) The bank loan should be adequate to purchase the asset financed
without the beneficiary having to supplement it from other sources and
banking plans should be implemented on a flexible basis.
xi) The admissible subsidy should be given as "bonus" on
completion of full repayment of the loan. Groups should also be given
the option to maintain the funds in the bank as a risk coverage for
future loans.
xii) Through appropriate amendments to its rules, Indian Bank should
begin to give the loans under the project to the best groups thus treating
them as financial intermediaries.
xiii) Simplified procedures for keeping accounts by the groups need
to be immediately developed through a short-term consultancy. On the
other hand, passbooks regarding small, internal loans need to be issued
that will allow both Project Implementation Units (PIUs) and Project
Management Unit (PMU) to collect detailed data and to follow-up this
issue.
xiv) The groups should be able to charge a small service charge for
loans received by beneficiaries. While the groups should decide themselves,
a guideline of 1% to 2% (on the total amount of the loan) could be suggested.
xv) In mature, well functioning groups, a system of individual deposits
should be introduced on a pilot basis.
xvi) The project should provide funds for computerisation of ten Indian
Bank branches serving more than 50 groups in order to speed up loan
sanction and to diminish lender and borrower transaction cost.
xvii) Intensive efforts need to be made by the project so that different
types of training, including training in groups dynamics, group management
and participation as well as technical/skills training are provided
to all women group members.
xviii) Depending on available training capacity on the part of line
ministries and NGOs, the technical training may be offered by technical
people attached to the NGO, by members of line ministries or by technical
trainers retained on a contractual basis by the project.
xix) In all cases, in order to accommodate women's work overload and
multiple responsibilities, their training should be offered at the village
level and should be practical, on-the-job training, well adjusted to
women's reality.
xx) Training in poverty and gender issues should be extended to all
project officers, deputized members of line ministries and bank officers
at district and branch levels as well as to NGOs.
xxi) An appropriate consultant should be commissioned by the project
to identify training needs (group dynamics, group management, gender
and poverty issues and credit related subjects including microenterprises)
of collaborating NGOs and arrange for such training to be provided by
specially trained trainers.
xxii) A short training in participation should be given to animators
in order to enable them to modify their own often dominating behaviour
and to create a participatory environment for all women members.
xxiii) An important training aid to be developed is a video of the
behaviours and interactions between women members in a well functioning
group, illustrating successful group dynamics, active participation
and democratic decision making. The video could also include a contrast
with a group that is not functioning well. Specific funds should be
allocated for these and other communication activities.
xxiv) All training activities and particularly the quality of training
offered to all target groups and especially to beneficiaries needs to
be carefully monitored by the project, mainly by the Training Coordinator,
and in his absence by contracted training specialists.
xxv) Data concerning all types of training of beneficiaries as well
as data regarding the classification of the groups with regard to the
degree of consolidation (according to the proposed criteria) should
be disaggregated by branch and by collaborating NGO in order to allow
for corrections and changes in direction.
xxvi) Animators and supervisors should be trained in recording the
number of trained beneficiaries, the type of training provided, and
the number of visits by the technical staff (e.g. veterinarians) to
the group.
The TNWDP provides a number of important lessons that can benefit the
planned National Women's Project in India. Four outstanding lessons are
the following:
