For self-help groups (SHGs) and the livelihood opportunities created through a development project to be sustainable beyond the project funding period, it is crucial to build the capacity and resilience of the SHGs to continue functioning independently. Some key factors that need to be addressed are:
Financial sustainability: SHGs need to have adequate capital available to carry out their activities even after external funding ceases. This requires strong focus on savings mobilization right from inception so that groups have their own internal corpus. Regular savings and internal lending should be promoted to enable groups to meet credit needs of members from their own funds. Linking groups to banks or microfinance institutions for revolving credit lines will ensure continued access to working capital. Groups should be trained in financial management, book keeping, developing bankable project proposals to access funds.
Institutional sustainability: Strong governance systems and management practices need to be established within groups to minimize conflicts and ensure smooth functioning. Regular meetings, participation of all members in decision making, transparency in financial transactions, and timely elections build trust and ownership. Exposure visits for groups to well-functioning federations/collectives inspires peer learning and replication of good practices. Formation of second or third tier collectives federating SHGs aids scale, resource pooling and collective bargaining.
Technical and managerial capacity: Appropriate training and handholding support should be provided to build the technical expertise of SHGs in designing and implementing livelihoods projects and running enterprise operations successfully. This involves training members in book-keeping, basic financial and risk management, marketing strategies, quality control etc. Partnerships with technical agencies or relevant government line departments helps sustain knowledge transfer even after project end. Appointing mentors or promoters from within communities aids continuity of capacity building initiatives.
Social sustainability: Projects must focus on strengthening social capital and mutual self-help among community members. Regular meetings and collective problem solving develops strong bonding within groups that helps them survive external shocks on their own. Activities aiming at financial inclusion should prioritize the most vulnerable sections to achieve an equitable impact. Social audit practices ensure transparency and greater community ownership of the SHGs. Taking the community along through awareness campaigns aboutthe benefits of collective action also drives long term participation of masses.
Market linkages and access to public services: Identifying market demand and developing steady supply chain linkages with bulk buyers/traders is crucial for enterprises to sustain. Collectivization aids in achieving economies of scale and better bargaining power. Partnering with government programmes provides continuity of access to inputs, finance and infrastructure support. Streamlining of processes and developing community procurement plans aids integrating of livelihood projects into local governments’ service delivery frameworks.
Exit strategy and sustainability planning: A clear exit strategy needs to be designed and communicated right from inception with phase-wise graduation of support. Regular tracking of sustainability indicators through baseline and endline surveys measures impact and gaps. Addressing key risks and vulnerabilities through suitable mitigation measures makes groups resilient to withstand external shocks. Developing locally-appropriate sustainability roadmaps with communities and handholding for initial independent functioning ensures ownership and continuity of outcomes even after external funding ends.
Regular monitoring and evaluation is important to assess sustainability of SHGs and livelihoods. Social, financial and environmental viability needs to be explicitly built into project designs. Innovation and piloting of new collective models keeps the momentum going. Documentation and sharing of best practices inspires replication. With such a thorough approach integrating capacity building, community participation and long-term planning, it is possible to ensure sustainability of SHGs and promote an inclusive development process well beyond project timelines. Strong community ownership coupled with partnerships, access to public resources and entrepreneurial member mindset will go a long way in sustaining the gains from microfinance interventions.