A self-help group (SHG) is a village-based financial and social intermediary usually composed of 10–20 local women. The first SHG was formed by Mysore Resettlement and Development Agency (MYRADA) in 1985. After the success of their initiative the concept was replicated exponentially in all parts of India. Later on from 1992 National Bank for Agriculture and Rural Development (NABARD) had taken greater initiatives to link the SHGs with banks commonly known as SHG bank linkage programme. Various Government and Voluntary organisations have promoted the linkage programme and tried to link them with main stream economy.

Revolving Fund Concept: The conceptual framework of Integrated Watershed Development Programme (IWMP) is to augment the livelihood status of the people dependent on a particular catchment area. District Watershed Development unit (DWDU) is acting as project monitoring and implementing agency in Patan district of Gujarat. In few projects where forest area is more than 33 percentages then the implementing agency is District Forest department. DWDU has taken a major initiative in promotion of the concept of revolving fund in Patan under the IWMP project. By definition ‘Revolving Fund’ is a capital raised with a certain purpose which can be made available to the same users more than once. The Revolving Fund is expected to be utilized for income generation activities and return within 18 months. This repayment will be deposited in the Watershed Development Fund (WDF) to utilize the fund in future.

The risk factor of this concept is delayed repayment of the fund or turning loan amount into a bad debt. To overcome the risk factor DWDU has promoted revolving fund on SHG basis rather than individual basis. The SHG then lends the money to the individual as per their demand and norms of the group. It has been observed that due to proper selection of individuals by the group and peer pressure, the repayment is secured. Beside this the SHGs are formed with majority of similar occupational and social backgrounds, therefore the group activities selected by them are quite similar in nature. Hence increases the chance of success. This also increase the managerial ability of the SHGs as all decision was taken by the groups themselves.

1. Availability of fund at 1 % interest which is very nominal than other informal lending sources. The money lender is the main source of informal credit in village with usually interest rate of more than 24-30 % depending of the requirement of the individual. While revolving fund is interest free. In some cases SHG itself decided to impose minimal interest to the borrower to ensure repayment and enhancement of group savings.

2. Timely availability of fund: The fund flow is flow Village Watershed Committee (VWC) to respected SHGs. The SHGs then provide the fund to the individuals ensuring repayment within 18 months. The administrative process is simple and there fund is available timely to individuals.

3. Promote group activities: DWDU is acting as a key agency for capacity building of the SHGs. Hence group activities based on livelihood enhancement are being promoted with proper training from different resource persons.

4. Being different from a grant based system this approach enhance the group’s ability to become self sustainable.

5. Improves managerial skill of the SHG

The first revolving fund of Rs 25000 was given to Jaychetrapal SHG for package tea business in Bhilot village (IWMP-11) of Radhanpur Taluka. The group then procured bulk quantity of local branded tea which is having high demand in that area, and packet it in small pouches to sell in the village. The indicator of their healthy business is depicted by the timely repayment of the loan. Within 6 months they have already deposited Rs 10000.

Being encouraged by their success revolving fund is highly encouraged in IWMP project area of Patan. In Mubarakpura village (IWMP-2) at Sami taluka a group named Arti SHG has taken revolving fund on Nov 2012 for procurement of cumin seeds for cultivation on farm land that was taken on lease by the group members. The seed money was given to 7 members of that SHG. Although cumin production was not very high due to acute shortage of rainfall but still they were able to repay the amount by May 2013 (within 6 months). Now again this year they are willing to take revolving fund for cumin expecting a higher yield compared to last year as average rainfall in this region is more than last three years average.

Naroda Gangaben Chehabhai, a member of GangaMaiya SHG, Anwarpura Village (IWMP-9 ) located at Sami Taluka, received Rs 25000 as revolving fund under Integrated Watershed Management Prorgamme (IWMP) during April, 2013. With her own contribution of Rs 6000 she purchased a Mould Board plough with Rs 35000. The MB Plough with her own tractor have been rented for Rs 600/hr. As her first business startup she had managed to operate nearly 45 days for the Kharif season of 2013. Her reported average revenue was approximately Rs. 63,200 whereas the expenditure was Rs 34650 towards diesel expenses and Rs 20350 for maintenance (including driver). Her net income during the season is Rs 8200. Now she is all ready to catch the Rabi season and also started to repay to revolving fund. On the other side it is also helping other farmers for timely tillage practices.

Mrs. Jamiben Kanji bhai native of Motipipli village IWMP -11 located in Radhanpur Taluka is a member of Jai Chamunda SH started on Nov, 2007 with 16 members. Being a member of the SHG, Jamiben received various trainings on understanding of the concepts of savings, skills development and entrepreneurial development trainings from DWDU. After the training she decided that it would be good to start a provision store as there were no other provision stores in nearby adjoining areas. Incurring her demand, the Village Watershed Committee has provided Rs 25000 as revolving fund to the SHG on 6 July 2013 to start a provision store. She manages to procure materials in bulk from the Radhanpur market situated at 10km from the shop. At the starting the shop was doing average business and she was able to save Rs. 200 per day (i.e monthly earning of Rs 6000). Within few months she was able to understand the customer preference and apart from regular provisional goods she also keeps seasonable goods and manages to earn Rs 4000-5500 per month taking into the account expenses on electricity. She has so far repaid an amount of Rs 7000 to the SHG.

Small kirana shop, cutlery shop, cattle feed shop, agri implements and various other small business and entrepreneurship has been evolved by this small effort of revolving fund. Till now nearly 28.38 lakh revolving fund has been disbursed to more than 76 groups and 40 villages. In all the groups the repayment time is remarkable.

Although it is a minor step but these small initiatives are bringing great impact on the life of people. There is still a huge scope to promote revolving fund for not only in Patan but in other villages of Gujarat. Now the SHGs themselves are very much interested to receive the revolving fund and generate alternative livelihood.

Contributors: M.K.Patel (Project Director, Patan), Manishaben Patel (MDT-CM), Chetnaben Patel (WDT CM), Nainaben Patel (WDT-CM), Abhinandan Das (Technical Expert, Patan), Megha Jhamb (Technical Expert, Patan)