Poverty in Tribal Communities: Are Self-Help Groups Effective?

Tata Trusts supports tribal communities in agricultural development in the hopes of reducing poverty nation-wide.

Agriculturalists gather beneath a tree not far from Ranchi, Jharkhand. (Photo: Manon Verchot)

Under the shade of Bhursu village’s central tree, Gumatri Mundu joins 25 agriculturalists – mostly women.

These women, members of the Munda tribe in Jharkand, meet regularly to learn agricultural and farming practices from one another and share the juicy watermelons many of them now cultivate.

Mundu, 27, joined her self-help group in 2014, in an effort to stabilise her income and become a lakhpati – a farmer who earns more than one lakh rupees a year. Before, she sold wood and found wage labour to help sustain her family, but her earnings were inconsistent.

Gumatri Mundu with her baby daughter. (Photo: Manon Verchot)

Mundu and her family are one of 28,000 households in Jharkhand participating in an initiative by Tata Trusts and Collectives for Integrated Livelihood Initiatives (CInI) to raise 101,000 households across the country out of poverty by 2020.

Since joining her self-help group, she has moved to agriculture. She earns Rs 30,000 for tomatoes and Rs 91,000 for watermelons. The group has taught her to boost her agricultural output by carefully timing her crops, learning how to raise healthy seedlings, and finding ways to diversify her income.

Growing watermelons has allowed these Munda women earn more money. (Photo: Manon Verchot)

Are Loans the Best Way to Help?

But initiatives like these don’t always benefit the poorest of the poor, critics of the self-help model say. To join a self-help group, people need to contribute a certain sum on a pre-determined basis. These regular instalments act as a cushion for communities to fall back on if they have a bad harvest, and are also an opportunity for groups to invest in tools they might need, like tractors.

Mundu earned around 15,000 rupees a month for her family from wage labour and wood selling before the scheme, well above the Rs 956 per person per month on the poverty line.

This cluster of villages, wherein we work under the Lakhpati Kisan – Smart Village programme, we work with 100% of the households within the villages and thus there are no households which get left out. We completely take the point that all households will not reach Lakhpati at one go, the core focus is to ensure all households are engaged in the community institutions as well as livelihoods.

Neelam Ganesh, Head of the Central India Initiative at Tata Trusts

Fields of watermelon in Khunti District, Jharkhand. (Photo: Manon Verchot)

For those with very low incomes, though, participating in these schemes is not always possible. It can even put them in further debt.

Some anthropologists, like Jason Hickel from the London School of Economics, say the best way to raise people out of poverty is to give them money, rather than giving them loans.

A <a href="https://books.google.co.za/books/about/Just_Give_Money_to_the_Poor.html?id=M2WWHIzQON0C&amp;hl=en">growing body of evidence</a> suggests that direct cash transfers, with no strings attached, not only deliver success where microfinance fails, they appear to be the single most impactful anti-poverty intervention available.

<i>Jason Hickel, anthropologist at the London School of Economics</i>

But self-help groups continue to dominate development models around the world. And when they are not attached to loans, they can provide opportunities for information sharing and communal support.

By encouraging people to “communitise,” they are more willing to take economic risks that pay off in the long-run, says Sirshendu Paul, team leader of CInI - Jharkhand.

The first condition is to have confidence. That confidence needs to be built.

Sirshendu Paul, team leader, CInI - Jharkhand