JSS MAHAVIDYAPEETHA JSS COLLEGE FOR WOMEN (Autonomous) Saraswathipuram, Mysore – 570 009 MINOR RESEARCH PROJECT “PATH TO FINANCIAL INCLUSION : THE SUCCESS OF SELF HELP GROUPS BANK LINKAGE PROGRAM IN KARNATAKA STATE OF INDIA” Submitted to University Grants Commission SOUTH WEST REGIONAL OFFICE BANGALORE Principal investigator DR. H.S. KONGALAPPA Assistant professor Department of Commerce & Management JSS College for Women (Autonomous) Saraswathipuram, Mysuru – 570 009. Co-Investigator SRIKANTH M.E. Assistant professor Department of Commerce& Management JSS College for Women (Autonomous) Saraswathipuram, Mysuru – 570 009. DECLARATION We hereby declare that this Minor Research Project entitled “PATH TO FINANCIAL INCLUSION: THE SUCCESS OF SELF HELP GROUPS BANK LINKAGE PROGRAM IN KARNATAKA STATE OF INDIA” is the result of research work done by us. We also declare that this Minor Research Project Report has not been submitted to any university / institutions by us for the award of any Degree / Diploma. SRIKANTH M.E. DR. H.S. KONGALAPPA Co- investigator Principal Investigator JSS MAHAVIDYAPEETHA J S S COLLEGE FOR WOMEN (AUTONOMOUS) (An Autonomous College of University of Mysore: Re-Accredited by NAAC with ‘A’ Grade (CGPA: 3.10) Saraswathipuram, Mysore – 570 009 Ph No:0821-2548239 . Principal 2548383.Fax: 2548240 . : [email protected] . Website: http://www.jsscw.in CERTIFICATE I hereby certify that the Minor Research Project entitled “PATH TO FINANCIAL INCLUSION: THE SUCCESS OF SELF HELP GROUPS BANK LINKAGE PROGRAM IN KARNATAKA STATE OF INDIA” carried out by DR. H.S. KONGALAPPA and Sri SRIKANTH M.E. This Minor Research Project report has not been previously submitted to any university / institutions for the award of any degree or diploma. PRINCIPAL ACKNOWLEDGEMENTS My sincere Pranams to His Holiness Jagadguru Sri Shivarathri Deshikendra Mahaswamiji, President, JSS Mahavidyapeetha, Mysore. I am grateful to Prof. S.P. Manjunath, Secretary, JSS Mahavidyapeetha, Prof. T.D. Subbanna, Director, Dr. Mruthyunjaya P. Kulenur, Additional Director, Sri B. Niranjanamurthy, Assistant Director, College Education Division, JSS Mahavidyapeetha, Mysuru, who were instrumental in motivating me to take up this research work. My deepest gratitude goes to them for the confidence they reposed in me. I acknowledge my heartfelt thanks and gratitude to my Ph.D guide Dr. N.Nagaraja, Professor, DOS in Commerce, University of Mysore, who right from the conceptualisation to the successful completion, encouraged and empowered me to take up this task. Indeed, I am indebted him to a very great extent. I am immensely thankful to Prof. N. Nagaraja, Principal, Dr. Rechanna, HOD, Department of Commerce, Dr. H.C. Honnappa, Dean, Sri S. Shivashankarappa, office Superintendent, Sri H.N.Manjunath, Librarian, Sri S. Lokesh, office staff, JSS College for Women, Saraswathipuram, Mysore, and M/s Madhu Computers for their excellent support, invaluable encouragement and most appropriate guidance from time to time during the course of this study. I express my profound thanks and gratitude to them. I wish to place on record my deepest gratitude to my wife Smt. D.V. Jyothi, for her patience and understanding during the research time. I am grateful to her for the kind co-operation and encouraging atmosphere provided throughout my research work. I am grateful to the UGC for having provided financial assistance to undertake this research. My thanks are due to my colleagues, students and each and every one who directly and indirectly helped me in this endeavour. Date: (DR. H.S. KONGALAPPA) CONTENTS Title Page No. LIST OF TABLES LIST OF FIGURES Chapter I Introduction 1-7 Chapter II Financial Inclusion and Self Help Groups’ Bank 8-30 Linkage Programme - A Theoretical Overview Chapter III A Profile of Chamarajanagara -Sample District 31-64 Chapter IV Data Analysis and Interpretation 65-107 Chapter V Summary of Findings, Suggestions and Conclusion 108-114 BIBLIOGRAPHY i-vi LIST OF TABLES Table Page Title No. No. 2.1 Self-Help Group Bank Linkage Program in India 19 2.2 SHGs Bank Linkage Programme in Karnataka 26 3.1 General Indicators of the Chamarajnagara District 47 3.2 Rural and Urban Indicators of the District 48 3.3 General Information of the District 49 3.4 Population of the District 50 3.5 Land Utilization in Chamarajanagara District 51 3.6 Size of Landholdings of the District 52 3.7 Communicntion Facilities in the District 53 3.8 Banking Facilities in the Chamarajanagar 54 3.9 Agricultural Economy of the District 55 3.10 Level of Education in Chamarajanagara District 57 3.11 Performance of Sericulture in the District 58 3.12 Livestock and Animal Husbandry 59 3.13 Net Sown and Net Irrigated Area 60 Sector-wise PLP Projections Chamarajanagar District, 3.14 62 Karnataka 3.15 SHGs and Related Information of the District 63 4.1 Number of Members in SHGs in Gundulpet Taluk 66 4.2 Number of Members in SHGs in Kollegal Taluk 67 4.3 Number of Members in SHGs in Chamarajanagar Taluk 67 4.4 Number of Members in SHGs in Yelandur Taluk 68 4.5 Monthly Savings of the Respondents in Gundulpet Taluk 69 4.6 Monthly Savings of the Respondents in Kollegala Taluk 69 4.7 Monthly Savings of the Respondents in Chamarajanagara Taluk 70 4.8 Monthly Savings of the Respondents in Yelandur Taluk 70 4.9 Transactions With Bank by SHGs in Gundulpet Taluk 71 4.10 Transactions With Bank by SHGs in Kollegala Taluk 72 4.11 Transactions With Bank by SHGs in Chamarajanagara Taluk 73 4.12 Transactions With Bank by SHGs in Yelandur Taluk 73 4.13 Loan Borrowed by the Respondents in Gundulpet Taulk 74 4.14 Loan Borrowed by the Respondents in Kollegala Taulk 75 4.15 Loan Borrowed by the Respondents in Chamarajanagara Taulk 76 4.16 Loan Borrowed by the Respondents in Yelandur Taulk 76 Repayment of Loan Amount by the Respondents in Gundulpet 4.17 77 Taluk Repayment of Loan Amount by the Respondents in Kollegala 4.18 78 Taluk Repayment of Loan Amount by the Respondents in 4.19 78 Chamarajanagara Taluk Repayment of Loan Amount by the Respondents in Yelandur 4.20 79 Taluk Total Savings of Money by the Respondents in Gundulpet 4.21 80 Taluk 4.22 Total Savings of Money by the Respondents in Kollegala Taluk 80 Total Savings of Money by the Respondents in 4.23 81 Chamarajanagara Taluk 4.24 Total Savings of Money by the Respondents in Yelandur Taluk 82 4.25 Purpose of Loan Borrowed by the Respondents in Gundulpet 83 Taluk Purpose of Loan Borrowed by the Respondents in Kollegala 4.26 84 Taluk 4.27 Purpose of Loan Borrowed by the Respondents in 85 Chamarajanagara Taluk Purpose of Loan Borrowed by the Respondents in Yelandur 4.28 Taluk 86 4.29 Marital Status of Sample Respondents in Gundlupet Taluk 87 4.30 Marital Status of Sample Respondents in Kollegala Taluk 87 4.31 Marital Status of Sample Respondents in Chamarajanagara Taluk 88 4.32 Marital Status of Sample Respondents in Yelandur Taluk 88 4.33 Qualification of the SHGs Members in Gundulpet Taluk 89 4.34 Qualification of the SHGs Members in Kollegela Taluk 90 4.35 Qualification of the SHGs Members in Chamarajanagara Taluk 91 4.36 Qualification of the SHGs Members in Yelandur Taluk 91 4.37 Size of the Family of the Respondents in Gundulpet Taulk 92 4.38 Size of the Family of the Respondents in Kollegala Taulk 93 4.39 Size of the Family of the Respondents in Chamarajanagara 94 Taulk 4.40 Size of the Family of the Respondents in Yelandur Taulk 94 4.41 Rate of Interest Charged by Money Lenders in Gundulpet Taulk 95 4.42 Rate of Interest Charged by Money Lenders in Kollegala Taulk 96 Rate of Interest Charged by Money Lenders in Chamarajanagara 4.43 97 Taulk 4.44 Rate of Interest Charged by Money Lenders in Yelandur Taulk 98 4.45 Occupation of SHGs Members in Gundulpet Taluk 99 4.46 Occupation of SHGs Members in Kollegala Taluk 99 4.47 Occupation of SHGs Members in Chamarajanagara Taluk 100 4.48 Occupation of SHGs Members in Yelandur Taluk 101 4.49 Age Structure of the SHGs Member in Gundluet Taluk 102 4.50 Age Structure of the SHGs Member in Kollegala Taluk 102 4.51 Age Structure of the SHGs Member in Chamarajanagara Taluk 103 4.52 Age Structure of the SHGs Member in Yelandur Taluk 104 4.53 Period of Meetings Conducted in SHGs in Gundulpet Taluk 105 4.54 Period of Meetings Conducted in SHGs in Kollegala Taluk 105 Period of Meetings Conducted in SHGs in Chamarajanagara 4.55 106 Taluk 4.56 Period of Meetings Conducted in SHGs in Yelandur Taluk 107 LIST OF GRAPHS Graph/ Page Diagram Title No. No. 4.1 Number of Members in SHGs 68 4.2 Monthly Savings of the Respondents 71 4.3 Banks with SHGs Transactions 74 4.4 Number of Members Borrowed Loan from SHGs 77 4.5 Repayment of Loan Amount by the Respondents 79 4.6 Total Savings of the Respondents 82 4.7 Purpose of Loan Borrowed by the Respondent 86 4.8 Marital Status of Sample Respondents 89 4.9 Educational Qualification of the SHGs Members 92 4.10 Size of the Family of the Respondents 95 4.11 Rate of Interest Charged by Money Lenders 98 4.12 Occupation of SHGs Members 101 4.13 Age Structure of the SHGs Members 104 4.14 Period of Meetings Conducted in SHGs 107 LIST OF ABBREVIATIONS APARCA Asia Pacific Rural and Agricultural Credit Association APL Above Poverty Line ARADAN Professional assistance development Action BPL Below Poverty Line BRAC Bangladesh Rural Advancement Committee CB Commercial Bank CKGB Cauvery Kalpatharu Grameena Bank D Mass District Mass DCCBS District Central Co-operative Banks .