CHENNAI: The Indian model of microfinance is different from that practised in other countries, observes Lodewijk J.J. Berlage from the Katholieke Universiteit Leuven, Belgium.
In India, the self-help group (SHG) is a little bank by itself, taking loans from banks and disbursing sums to group members. In other countries, usually one member in a group of five or more takes a loan and the entire group is held responsible for the repayment of the loan. The increased importance of the group in India could have consequences that would become clearer in a decade or so, he says.
The retired professor is in the country to advise research scholars at the Jabalpur Xavier Institute of Development Action and Studies. The research data that he would be providing advice on has compared SHGs in Andhra Pradesh and Chhattisgarh. Besides economic viability, the two-year old study has examined the impact membership in an SHG has in community participation. While it was true that SHG members were more active in local political and development activities, it remained to be seen whether it was active women who form SHGs in the first place or if membership in SHGs promoted activity in the public sphere. About criticism levelled against SHGs, he said new institutions tended to have a lot of high expectations tagged on to them.
Dr. Berlage was in the city to attend a symposium on `Global Business Opportunities and Challenges' organised at the Loyola College on Thursday and Friday.