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NRLM has set out with an agenda to cover 7 crore rural poor households, across 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats and 6 lakh villages in the country through self-managed Self Help Groups (SHGs) and federated institutions and support them for livelihoods collectives in a period of 8-10 years.

Nearly 76 million women in rural India had taken up self-help initiatives that proved instrumental in managing the food insecurity and healthcare challenges posed by the pandemic, an October 2020 report by the Initiative for What Works to Advance Women and Girls in the Economy (IWWAGE) said.

IndiaSpend story: Rural Women's Collectives Struggle To Survive Even As They Help Manage Covid Fallout

SHGs are typically groups of 8-10 women who meet once a week to collect money from their members, connecting them to banks and loaning them money at low interest rates.

Every SHG has a president and secretary. NRLM linked several SHGs to village-level organisations (VOs) and several village-level organisations to a cluster-level federations (CLF). The programme also trained local women to run these organisations.

Read more about the impact of this scheme: Populating Ghost Towns: How Local Families Are Creating Opportunities in Rural Uttarakhand

Bad loans or non-performing assets (NPAs) were brought down through institutionalised community-based repayment mechanisms (CBRMs)--committees of SHG members who ensure that SHGs are linked to banks and pay loans promptly--according to this 2020 World Bank note. In 2019-20, the NRLM had NPAs worth nearly Rs 2,300 crore (involving 218,419 SHGs or 4.15% of all SHGs)--and equivalent to 2.43% of the total outstanding amount from SHGs--NRLM data show.

Expert suggest that certain rules--such as those on weekly meetings--be eased as they have no direct bearing on an SHG’s performance. Older SHGs, for instance, were more productive and received higher loan amounts even though they were less likely to follow the panchsutras, it said.

When standards are too strict, the poorest and most vulnerable households find adherence most difficult and might have to exit the SHGs.

IndiaSpend story: How Women’s Self-Help Groups Boosted Household Incomes

The probability of SHG membership is higher for members of scheduled castes and tribes, and for households with fewer consumer assets, as well as those who need to access low cost credit and have high indebtedness, the researchers found.

But overall, households with greater levels of schooling obtained larger loans from SHGs and more educated women also gained the most in terms of confidence in dealing with the community, a study found. It is the schooling of male members of the household that most affects loan amounts.

The programme was creating inequalities based on education, even as it was reducing inequalities based on social groups. The inequality was the highest in more developed gram panchayats. SHGs with at least a few members with relatively high levels of schooling adhere better to programme rules, the researchers found.

IndiaSpend story: How Women’s Self-Help Groups Boosted Household Incomes

Self help group members saw a higher borrowing rate (59%) against 42% women on average, a study of 15,000 women and 2,300 men from low-income households across 10 states conducted between October and November 2020 found. The report, published in May 2021 was conducted by Dalberg, a global consulting firm.

But members have been struggling to return their loans taken from SHGs. "We loaned a little money to everyone, as per their needs," said Sunita Devi. "But many members have not been able to earn much over the last year because of the lockdown and the restrictions during the second wave. We did write off some of the loan amount for those who were struggling and asked them to pay the remaining amount when and as much as they can."

"If earlier people could pay back in installments of Rs 500 per month, [in the pandemic] this fell to Rs 100-200 per month," said Sushma Devi of Daru-kharika village.

IndiaSpend story: Rural Women's Collectives Struggle To Survive Even As They Help Manage Covid Fallout