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:
i) Women's groups have been formed and group members have been helped to develop the habit of systematic savings.
ii) It has made it possible for unregistered self-help women's groups to open savings bank accounts, an important achievement in itself.
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:
(a) There is a striking diversity of results not only among districts but even within districts of a same state. This should lead to great caution in replicating experiences such as those of the Tamil Nadu Development Project. Crucial success factors are the presence of motivated and competent NGOs, committed financial institutions and adequate procedures (particularly with respect to the mode of payment to NGOs).
(b) The poorest women included in groups and provided with appropriate support services performed as well as less poor women with respect to savings, loan repayment and ability to productively utilize loans.
(c) direct subsidies provided to the beneficiaries as a bonus after loan repayment do not constitute a significant motive for members of well functioning groups. On the contrary, they may be creating expectations for future subsidies that cannot be fulfilled; and
(d) A key indicator of the dynamism and cohesion of a group is the degree of rotation to all members of small, internal loans based on their savings prior to applying for bank loans.