SHG Plus Empowers Bihar’s Rural Women to Build Homes & Educate

Now, thanks to a one of a kind community loan system that assists rural women, Kumari tries to secure her family's future and her debt free situation kumari recalls the days of northern muzaffarpur where her borrowing habits involved getting debt at extortionate rates. After all, there was a time women were made to struggle in Bihar region, but now they are not only cultivating strawberries but are also constructing houses and building towards their children’s future retirement plans. This was made possible due to SHG plus, an advancement of self help groups that focuses on economically empowering women.

The women themselves along with the help of the agha khan rural support program india came up with a solution to this issue. She recalls the days when borrowing money was so much more difficult by stating, “Now, we don’t need to borrow from outside.” Everything changed when they shifted into SHG Plus where, instead of two percent, people used to pay 60% interest when taking out loans, leading to a much easier borrowing experience. 

Kiran’s unique life journey is not a singular case, it is the norm for those who decided to move to muzaffarpur. Kiran's interest in self help groups extends into other members of her community. Savathi Devi, alongside other active members within her society, have opened a range of different self help groups for these women to borrow from.

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“Never did I think I would be growing strawberries. But, with the loan that I got through SHG Plus, I decided to give it a shot. I will scale it up if it works well," she states.

Stawberries, solar panels, and pucca houses that have sprung up from the SHG Plus savings are now decorating the countryside along with more conventional crops in Muzaffarpur.

The difference with ordinary SHGs is that this model SHG Plus combines compulsory annual dividends, rigorous bookkeeping, and broad based governance participation. Hence, financial confidence and sense of ownership and independence were achieved.

SHG Plus is exceedingly articulate regarding savings.

The women are organized into groups where they combine their savings every week. Each individual only has to pay a minimum quota of Rs. 20 a week, called a ‘mohar’.

These savings can then be loaned to group members at little interest.

It began in one of the villages in Muzaffarpur and later expanded to other SHG so that it is now commonly referred to as SHG Plus. The scheme is in a number of districts of Bihar and economically empowers women.

The high level of participation and commitment to transparency and accountability in SHG Plus undoubtedly increases its performance.

These accounts are dealt with transparently and sort meetings are convened once a week,” explains Kiran Kumari, member of Kiran Shakti SHG Plus, Harpur Mukund. 

“Every aspect is agreed upon as a group—how much loan to take, what should be the interest rate, how to capture the returns,, and more,” she continued. 

In such cases, record keeping is done through drawings which capture the understanding even among semi literacy members. 

Kiran Kumari adds, “We take savings through the mohars system. We used to contribute 20Rs a week and now it is 30Rs collection, so we are saving more now.” 

For several women SHG Plus has offered relief from their chronic debt situations. 

Many women are now more willing and able to pursue more ambitious, income generating undertakings which were nearly impossible to achieve through more mainstream funding sources, what with their exorbitant interest rates - all of which are made possible by the Plus scheme. 

“I used my part of the share money to buy a solar powered borewell,” says Shruti Singh. 

“I put in 1.35 lakhs to set the business and get profits of 17 thousand per year. ” She added with joy. 

SHG Plus brings impactful changes besides profits. 

For Bena Devi it is an entry point to construct a more desirable future and to have a voice within her family.

"In my household, I am also a decision maker. What once seemed the domain of men has become our area of specialization as well. From the share-out money, I constructed a house, allocated finances for my child’s education, and purchased gold," she says.

Share-out is loaning against the accumulated savings made from the weekly contributions where each member is required to repay the loan within three months. The interest that is payable is subsequently divided among the remaining members.

A field worker of Ashadeep, Sameena Khan, utilized the money for her treatment and on the other hand, Pratibha Kumari used the money to fund her children.

“Capacity Building and financial discipline were identified and treated as major clauses and thus ensured the success of SHG Plus," says Mukesh Chandra, team leader, Aga Khan Rural Support Programme India.

He states, “It is a program that economically empowers women and improves their core decision-making capabilities.”