South Asia Agriculture and Rural Growth Discussion Note Series March 2020 2 Institution Building & Capacity Building in NRLM Context The main design principle behind Self Help Groups (SHGs)- organizations of rural NRLP-NRLM, The World Bank & amp; GoI partnership poor women at the village level – was to The NRLP had a two-fold objective. empower women by mobilizing them into small groups, facilitating interactions and 1. To support the launch and expansion of the financial literacy, and federating them into Government of India’s Deendayal Antyodaya higher-order organization to unleash the Yojana National Rural Livelihood Mission (DAY- NRLM) and a strategic shift within the Ministry potential of “self help”. The overarching idea of Rural Development (MoRD) from a focus on was to enhance the livelihood and wellbeing allocation, disbursement, and monitoring of of the members and their households so central government financial resources, to the that they may effectively tackle the multi- provision of skilled technical assistance to states dimensional issues related to poverty as implementing the DAY-NRLM. well as engage with a large network of 2. The NRLP aimed to provide additional pro- stakeholders, including the government and poor investments in 13 states with the highest markets, at a household and community poverty rates and highest number of absolute level. poor in India. At the time of preparation, these 13 states1 accounted for almost 85% of the poor in India. The NRLP aimed to reach The movement was initiated in the late approximately 4.8 million rural women across 1980s by the Mysore Resettlement and 100 districts of the 13 states. Development Agency (MYRADA) in Karnataka and by Professional Assistance agenda of SHGs as a mainstay strategy was adopted as the cornerstone of for Development Action (PRADAN) in in rural development. Therefore, when the the scheme. By end of 1998-99, after Tamil Nadu and Rajasthan. The early Integrated Rural Development Program extensive experimentation, spearheaded 1990s witnessed vigorous efforts by rural (IRDP) and other sister programmes by professional non-profit organizations development professionals as well as the were converged and re-hauled as the across the country, various good practices National Bank for Agriculture and Rural Swarnajayanti Gram Swarozgar Yojana across the domain of capacity building, Development (NABARD) to mainstream the (SGSY) in 1999 and the SHG design institution building, financial inclusion, Scale Achieved by NRLM, March 2020 ASSAM 283141 3039368 UTTAR PRADESH 16475 445 RAJASTHAN 278619 2987293 GUJARAT 175488 2033424 15498 733 BIHAR 692844 7060869 12367 434 906356 10852651 21302 656 MADHYA PRADESH 60356 1048 287428 3229622 JHARKHAND 26575 814 MAHARASHTRA 244019 2950129 CHHATTISGARH 452250 4717840 KARNATAKA 17460 720 174074 1879737 19025 795 165739 2137091 9762 424 21286 4222 KEY TOTAL STATE TAMIL NADU ODISHA 6138026 67882922 SHGs Households 260538 3135173 332712 3579711 mobilized 356316 31781 VOs CLFs 16872 12150 29741 3800 1. These were Assam, Bihar, Chhattisgarh, Jharkhand, Gujarat, Maharashtra, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, West Bengal, Karnataka and Tamil Nadu livelihoods and core systems had also Strengthened by the positive experience of concepts for the larger NRLM. The became apparent. from AP, Bihar and Odisha, coupled with World Bank designed the National Rural an enhanced understanding from the Livelihoods Project (NRLP) in the year In 2000, the World Bank supported the Dr. Radhakrishnan Committee report, 2011 with a vision to mainstream SHGs Andhra Pradesh District Poverty Initiative the Ministry of Rural Development as the primary intervention strategy for Project (APDPIP or VELEGU) project, which restructured SGSY as the National Rural rural development. The major pillars for leveraged their existing work on SHGs, Livelihoods Mission (NRLM) in 2010 SHG functions were defined as institution integrated new lessons and scaled-up the with a vision to mainstream SHGs as the building, financial inclusion, livelihood SHG program across the state. The success primary intervention strategy for rural strengthening, women’s empowerment, of the APDPIP project led to the SHG centric development. The Mission was later re- vulnerability reduction with partnerships design of the JEEViKA project in Bihar and named the Deendayal Antyodaya Yojana and convergence as a cross-cutting the TRIPTI project in Odisha. In 2009-10, a – National Rural Livelihoods Mission theme. As an effort towards sustainability, report by the Dr. Radhakrishnan Committee (DAY-NRLM) Subsequently, in order to lessons from AP, Bihar and Odisha were set up by MoRD to look into the shortcomings leverage the World Bank experience of integrated, and a three-tier community of SGSY and suggested modifications, supporting livelihoods projects in states organizational architecture of Self-Help was made public by the government. like AP, Bihar, Odisha and Tamil Nadu, the Group-Village Organisation-Cluster The committee had critically analysed the GoI approved a World Bank supported Level Federation (SHG-VO-CLF) was scheme, highlighted major impediments National Rural Livelihoods Project (NRLP) designed to provide ongoing support to to the low performance of SHGs and to be implemented in 13 major States in women members and to sustain their recommended measures to address them. the country and aimed at creating proof organizations. Intervention: Strategies for Institution Building and Capacity Building Intensive and Extensive Implementation socially and economically marginalized and incomplete BPL list, the Cabinet has households to ensure that no one was left approved in 2013 that target groups under DAY-NRLM adopted a combination of behind. Each state adopted differentiated NRLM will be determined by a well defined, intensive and extensive strategies for the strategies suited to the local context for transparent and equitable process of implementation of program interventions. identification of households. Some states, PIP, at community level. The PIP process In intensive blocks (NRLP), the focus was such as Bihar, used a geographical has a set of exclusion criteria, automatic on supporting member households using approach where they identified regions inclusion criteria and a set of deprivation an entire set of interventions with a greater with a higher concentration of individuals indicators for enabling poverty ranking in a intensity of hand holding and financial support, and households with economic and social participatory manner. This delinks NRLM including community investment funds to build deprivations; while other states such as target group from the BPL list or Socio- strong community institutions that would serve Odisha and Madhya Pradesh (MP) used the Economic Caste Census (SECC) data for as demonstration and immersion blocks. In novel method of wellbeing ranking. Other identification. the extensive blocks, the strategy was limited states used the process of Households to providing handholding support to existing identified through the PIP process is called Many states went further in their efforts SHGs, building their capacity and linking them the NRLM Target Group, DELINKED from to induct women with disabilities, tribal with mainstream formal financial institutions. the BPL. groups, single women, etc. Some states Block phasing was introduced, so that in due designed strategies to work with the course all blocks in the state received the Under the original framework of NRLM, transgender community and the elderly. same level of support as the intensive blocks only rural households included in the The State Rural Livelihoods Missions and achieved the same level quality. official BPL list could be targeted. This (SRLMs) took special care to include list was prepared in 2002, has not been women from vulnerable communities(such Focused efforts to ensure inclusion of updated and has many defects. Since the as SC, ST, OBC) in leadership positions. the poor and vulneranble entire NRLM depends on the formation States such as Odisha mandated that the of affinity based groups of poor women first claimant on the RF be members from With the core focus of the NRLM being with common bonding and synergistic economically marginalized or vulnerable inclusivity, concerted efforts were made to functioning, which cannot be created by households. In fact while disbursing mobilize the most vulnerable women from simply drawing room an externally prepared the CIF, VOs prioritized SHGs with a larger share of members from SC, ST individual members, developing ownership management, leading to a greater financial and economically poorer communities. among community members towards their discipline as well as a higher probability of This strategy put inclusivity at the heart socio—political and economic development financial viability and sustainabiliy of these of the project, and the most vulnerable and well being. Through this process, the organizations. households at the core of the development NRLM harnessed the largest community to process. community action in the world, in terms of A system of regular grading of SHGs and scale. VOs was put into place and financial support Community to community action to - the SHG Revolving Fund (RF) and VO leverage local social capital and scale up Investing in building the capacity of the Community Investment Fund (CF) - was community and their institutions based on this grading. Since financial Traditionally, within the development sector, inclusion was a central pillar of NRLM, good the transformational role of mobilizing the As part of dedicated, sensitive support quality SHGs with a track record of regular community was entrusted to professionals. to enable community organizations to repayment were linked with banks and other However, the state of Andhra Pradesh build their capacities, SRLMs placed financial institutions for a higher dosage of pioneered the strategic development of a professionals at the sub-block level (area credit. Some states developed a system of pool of community cadres who have been and community coordinators) to facilitate Community Managed Recovery Mechanisms able to transform their own lives and the lives the strengthening of SHGS and VOs to reduce SHG level default, if any. of others. These community members were through community level interactions, chosen and trained to communicate their capacity building events, trainings and Federating SHGs at different levels to success stories and to inspire and mobilize other hand-holding support. These efforts build synergies and sustainability others. Within DAY-NRLM, this strategy were supplemented by internal and of community to community learning and external CRPs. Each state developed Experiences from earlier projects indicated action was scaled-up. Women who had their own set of Information, Education that in order to sustain SHGs and to address experienced change in their lives through the and Communication (IEC) material, while the larger issues of poverty and development, SHG movement were identified and trained the national unit provided guidance and there is a need to promote federations as Community Resource Persons (CRPs), technical inputs on a regular basis. of SHGs at various levels. A three-tier who then acted as agents of change. While structure of community organizations was certain states such as AP, Bihar, MP and TN Capitalizing SHGs/Vos with Revolving therefore designed to ensure the long took on the responsibility of supporting other Funds/Community Investment funds to term sustainability of the initiative. Each states by sending across CRPs, other states, trigger internal loaning and demonstrate entity – SHG, VO and CLF –has a distinct such as Odisha, leveraged their cadres from potential for bank linkage purpose and functions, a clear set of roles existing state-supported World Bank projects and responsibilities, and works collectively to like “TRIPTI” 2 to scale-up the DAY-NRLM An important strategy to strengthen achieve broader development goals. initiative. These strategies ensured increased community institutions has been to participation, faster internalization and capitalize SHGs and VOs with RFs and States were given the flexibility ownership of actions. CIFs. Besides shoring up the financial to aggregate SHGs as per the strength of SHGs, this approach has also local context. While SHGs at States that received external CRP support attracted inclusive finance from other the hamlet level, VO at the in turn developed a pool of Resource sources, leading to productive asset village level and CLF at the sub Blocks and over a period of 3 years creation – a first step towards shared block level is the most common these leaders were ready to extend their prosperity. The strategy has worked to meet architecture, Tamil Nadu and services to other regions within the state. the credit demands of SHG members to Odisha have their own format This strategy hastened the pace of the a large extent while also capping interest with the aggregation unit project and reposed the transformational rates at 18% to make livelihood credit at a gram panchayat level responsibilities of cross learning and cross more affordable. Since a large corpus (Panchayat Level Federation in support to community members, with limited of funds is now being managed by the TN and Gram Panchayat Level support from professional staff. This was a community organization, CLFs and the Federation in Odisha) engaged first step towards enhancing the agency of VOs are trained in financial and portfolio in financial transactions. 2. http://documents.worldbank.org/curated/en/457931487143179754/A-targeted-rural-livelihoods-program-in-Orissa Institution Purpose Functions and activities Self Help • To form a collective of poor and marginalized • Conduct regular meetings, facilitate interactions and promote the habit Group women. of regular savings. • Promote self help and cooperation among women • Maintain books of accounts and support internal loaning among • Provide access to savings and loans at the door step members. • Get the members out of trap of money lender high • Provide loans to members to meet various credit needs. cost debt • Avail loans from Banks and CIF from VO and ensure timely repayment. Village • Create a platform for all SHGs in a village to • Review the community staff and ensure book keeping of SHGs and VO Organisation support each other and have voice. transactions. • Promote mutual learning and leadership across SHGs. • Review, monitor and grade the quality of groups. • Share the community staff services for SHG book • Resolve conflicts and strengthen SHGs. keeping and quality. • Manage Community Investment Fund-CIF and recover loans. • Monitor and strengthen the SHGs within the village. • Coordinate with Village Panchayat for convergence. Cluster level • Build and promote space for community leadership • Training of community leaders and review staff at VOs /CLF Federations development • Manage CIF and other funds leveraged to build financial sustainability • Build an organization which will strengthen and • Develop systems to monitor the quality of groups and VOs, by sustain SHGs and VOs beyond project period providing MIS and auditing, computerization • Facilitate collective action to sustain linkages with • Develop new loan and insurance products and services Banks, Government and other agencies. • Facilitate livelihood promotion activities • Manage convergence for skills, entitlements and civic needs • Support social activities such as education, health and sanitation Implementation Strategies for successful scale up Universalization of the approach Before DAY-NRLM was initiated, the SHG movement was region specific and driven by NGOs or state governments. SHGs were mainly concentrated in the southern states of AP, Karnataka, TN, and Kerala, mostly in the form of neighbourhood groups. The Mission Shakti scheme in Odisha, the strong SGSY implementation in West Bengal and the MAVIM work in Maharashtra led to the considerable expansion of SHGs in these states. Large tracts of North and North East India were virgin territories until 2014-15, when SHG formation became a universal and integral strategy for rural development. Even in remote states with insignificant outreach, such as the North Eastern states, Himachal Pradesh and Jammu and Kashmir, the SHG movement has laid deep roots. The following table shows SHG growth in NRLP states. 2012-13 18,118 Progress of SHG ASSAM 480 2018-19 1,05,055 movement under NRLP (Phase 1), 9,642 BIHAR 73,730 665 June 2018 3,554 CHHATTIS- 983 -GARH 38,476 4,284 JHARKHAND 1,409 64,626 6,052 KARNATAKA 989 65,891 40,649 MADHYA 18 PRADESH 47,961 5,881 1,42,935 MAHARASHTRA 2,330 NUMBER OF SHGS 7,304 GROWTH % RAJASTHAN 22,884 213 Sensitive support structure and Standardised protocols games and case studies. Each SRLM dedicated implementation architecture developed their own set of IEC material (up to the block level) The DAY-NRLM national team, in as per the local context and in the local consultation with the state units developed language, which helped members to Lessons from SGSY and other government a standardized protocol to ensure engage with and internalize concepts of programs indicated that building institutions uniformity and quality of implementation community action and organization. Such of community requires dedicated for all elements of capacity building, standardization helped DAY-NRLM scale up professional support and handholding. institution development, and mobilization without compromising on quality. In the absence of dedicated support, the of community members (i.e. training of quality and sustainability of SHGs suffered. SHG members, federating SHGs into VOs, Saturation approach To bridge this gap, World Bank projects like VO capacity building, federating VOs into DPIP in AP, Rajasthan and MP; JEEViKA CLFs, CLF members capacity building, The strategy of SHG formation followed an in Bihar and TRIPTI in Odisha hired etc.).Both community trainers and project “intensive” geographic saturation approach professional staff at the block and sub-block staff underwent rigorous training about so that 5-15 SHGs (depending on village level. This ensured quality handholding of these protocols. State missions were size) were formed in each village. The the SHGs and brought in implementation allowed a measure of flexibility to innovate target was to mobilize and co-opt 1200 effectiveness, which in turn performed as per the local context, while keeping the SHGs in a block. This resulted in enhanced significantly better than other non-supported core non-negotiable elements intact. The operational efficiency and reduced SHGs. For the first time in the history of a external and internal CRP teams followed transaction costs (besides those associated government scheme in rural development, the protocol diligently, thereby leading to with the sustainability of VO). a dedicated implementation architecture fast paced growth and uniformity in the was designed spanning from the block quality of community organizations. The Pre-existing SHGs formed by level up-to the national level. A cadre of standardized protocol has been supported NGOs and other government professionals from the grassroots upwards, by training toolkits and IEC material (flex, departments were also brought working on the IB-CB agenda at all levels, flip charts, short videos) and participatory on board. strengthened the entire endeavour. training pedagogy, including role-plays, Broad-based SHG agenda – Panchsutra to Dasasutra Regular At first, the core functions of SHGs was inter- limited to financial intermediation in the loaning Timely form of Panchsutra (defined as regular repayment meeting, regular savings, credit, timely repayment and book keeping). The Maharashtra SRLM expanded this idea Regular to the concept of Dasasutra – leading to savings the addition of five other areas of focus viz. education, health including nutrition and WASH, PRI convergence, access to entitlements and livelihoods. This holistic Up-to-date Regular books of approach embedded a larger agenda within the SHG discourse and quickly meetings accounts gained currency and is being adopted nationwide. In response to this broad- based agenda, NRLM conceptualized the community cadre, who are employed of convergence has scaled up many fold. Vulnerability Reduction Fund at a VO level and paid by the community organizations Convergence initiatives were envisaged to strengethen the support function of an promoted by the mission to provide ongoing to build on existing programs and facilitate SHG/ VO. Several state missions designed managerial support. They are accountable access to departmental schemes. State their strategy around food security, nutrition to the community organizations and their governments have been eager to leverage security, health risk and other idiosyncratic performance is reviewed by the community this network to scale up and monitor & covariant risks to utilise the VRF. leaders at each level. Cadres such as the implementation quality of various SHG and VO book keepers, master book- government schemes. A few examples are Quality monitoring systems keepers, community auditors, master book the MGNREGS implementation through keepers and community facilitators at CLF CLF in Rajasthan, the Swachh Bharat The MoRD and the various state missions level have been equipped to support the Abhiyan in almost all states where the have developed a MIS to capture SHG, VO, CLF and Producer Group, etc,. In SHGs and VOs have pushed the sanitation organization level financial transactions most cases these community organizations agenda, the Aam Admi Bima Yojana (at the SHG, VO and CLF level), while are able to bear the costs directly. The implemented through these networks, the frequent periodic grading can ascertain the seeds of transformation have been sown to nutrition and health agenda being pushed quality of community organizations. State empower local communities to take charge in several states etc. Strong community missions are equipped to easily adjudge of their own organizations and sustain their organizations have helped increase overall institutional and financial health of operations in the long term. awareness of and access to government any community organization. This creates schemes. both a mechanism for transparency and Leveraging accountability, and enables SRLMs to take the community actionable decisions on providing RFs institutional platform and CIFs, deciding on the type of capacity for convergence building inputs, as well as community based recovery initiatives, etc. Due to the enormous scale of mobilization Pool of community cadres to take and the positive forward the initiative in anchor states financial health of the community The DAY-NRLM strategy has trained organizations, the level and capacitated members to work as Key Lessons and the Way Forward The IB-CB experience under NRLM has proven that a series of well-thought intervention if delivered through dedicated implementation architecture and through building capacity of the community to sustain the interventions, can yield transformative results at the grassroots. Experience suggests that triggering of women’s agency at the community level through provision of strategic inputs coupled with a conducive micro-environment not only enhances a strengthening higher level federations to of ownership from the implementing woman’s well-being within her household ensure sustainability of the institutions government and a strong conviction for the but also has the potential to transform the beyond DAY-NRLM. Important lessons prescribed model and delivery architecture. community at large. from the DAY-NRLM on IB/CB such as The long-term sustainability of such the use of robust protocols for mobilizing participatory rural livelihoods programs In this next phase, the National Rural community organizations, would do well is strongly correlated with the transfer Economic Transformation Project (NRETP) to be adopted into NRETP. This will of ownership to the rural community. will primarily focus on value chain livelihood standardize the process across regions and Successful pilots and demonstrations have interventions with collectives and sustain ensure uniformity in the quality of PG-POs, shown the need to engage the community the cluster level federations promoted in the building model CLFs and other livelihoods in the implementation process to ensure last phase as independent organizations. collectives. that interventions are both adequate and Here the general principles of grooming relevant. a community organizations will still be For replication or scale up of initiatives applicable and the project will focus on like the NRLM, there needs to be a sense About the discussion note series This note is part of the South Asia Agriculture and Rural Growth Discussion Note Series, that seeks to disseminate operational learnings and implementation experiences from World Bank financed rural, agriculture and food systems programs in South Asia. Author(s): Shouvik Mitra, Narender Kande, P. Usha Rani Series editors: Alreena Renita Pinto, Deepti Kakkar Publication design & illustrations: Satwik Gade We are grateful for the generous support from the Ministry of Rural Development, The Bill & Melinda Gates Foundation, The Department for International Development, and various State Rural Development departments. Disclaimer: The findings, interpretations, and conclusions expressed in this note are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent.