Neighbourhood Groups (NHGs) as an implementation strategy was present in the (Urban Basic Services (UBS) Project. Such a strategy was justified given the design of the programme, which was based on seven principles.

• Community participation
• Convergence of services (Environmental Improvement of Urban Slums - EIUS, Urban ICDS, shelter loan schemes)
• Special focus on women, children, and youth
• Cost effectiveness (from the perspective of affordability and maintenance)
• Coverage of low income communities (of the selected towns)
• Continuity (as part of a long term strategy)
• Coordination among the various functionaries associated with UBS

There was focus on planning from below. Each slum area was divided into small NHGs of 15 to 20 households.

The community organisation plan for UBS

UBS to UBSP

UBSP was more of an extension of the UBS Programme to cover the urban poor living in poor urban neighbourhoods outside the slums too. In spite of the attempts in community structures and bottom-up planning, UBS and UBSP remained top-down bureaucratically controlled programmes.

It was the Revised Guidelines of UBSP, formulated in the context of the greater push that UBSP warranted with the 74^th Constitutional Amendment Act that gave a better design and clearer roles to the community structure.

The community organisation stipulated by the revised guidelines included

• Neighbourhood groups (NHGs)
• Neighbourhood Committees (NHCs); and
• Community Development Societies (CDSs)

Guidelines proposed registration of CDSs under Charitable Societies Act or any other appropriate legislation to facilitate sourcing of grants and loans from other agencies and handling them autonomously. The guidelines proposed Community Organisers to be full time functionaries, thus placing emphasis on the community development aspect of the programme.

Urban Poverty Alleviation (UPA) Cell was proposed by these revised guidelines. The UPA Cell was to coordinate urban poverty alleviation schemes such as UBSP, Nehru Rozgar Yojana, EIUS, Low Cost Sanitation, and other schemes for the urban poor.

The community organisation that  emerged from these programmes, effective only to a limited extent till then, gained strength and legitimacy through another UNICEF supported project in Alappuzha.

The Alappuzha CBNP

The project that made the difference was Community Based Nutrition Programme (CBNP) that the UNICEF initiated in Alappuzha in August 1991. Through a survey conducted for the impact assessment of the UBS programme during 1987-1992, a list of nine factors were prepared for identification of poor families. Any family with four of these nine factors was considered poor. The intention was to develop a simple measure that would enable local community members and volunteers identify the multiple factors that caused malnutrition and consequent morbidity and mortality.

The Nine Factors

1. Scheduled caste and tribes
2. Only one or none of adult family members being employed
3. Kutcha or thatched house
4. Lack of household sanitary latrines
5. Non availability of drinking water
6. Families having two meals or less per day
7. Regular use of alcohol by a family member
8. Family having at least one illiterate member
9. Family having at least one child below five years

CDS as Legal Entity

While the list of nine factors made it possible for the communities to identify the poor families without external help, thus ensuring community participation, the three tier community system was strengthened and developed through organising the poor households. Project officers of CBNP, Community Organisers, ICDS Supervisors, anganwadi workers, and volunteers contributed to this process of firming up the community organisation.

Statutory recognition added to the legitimacy of the system. In 1993, the State government approved the model byelaw for Community Development Society developed by the State UBSP Cell jointly with Alappuzha UBSP Cell. On 6^th February 1993, Alappuzha Community Development Society came into existence. A three-tier CDS system evolved through the process.

The CDS System of Alappuzha

CDS and the Municipality

Linkages of the three tier community organisation with the municipality were to be through two platforms.

• Ward level advisory committees, with municipal councillor of the ward as chairperson and ADS chairperson as convenor. Resident Community Volunteers (RCVs) of the ward, anganwadi workers, junior health inspectors, and a few eminent persons nominated by the committee were members.
• Town level advisory committees, with municipal chairperson as chairperson and municipal secretary as convenor. Members included CDS president, vice president, municipal engineer, chairpersons of all standing committees, all women councillors, all heads of departments at the town level, and bank representatives.

These committees, however, proved ineffective.

Thrift and Credit Societies

An innovative component of the CDS project was the introduction of thrift and credit societies (TCS) as an integral part of the community organisation. TCS was introduced in Alappuzha municipality in February 1994. TCSs were almost simultaneously organised in all the NHGs. Mobilising small savings of the poor women members and giving loans to them made TCSs informal banks of the poor.

NABARD’s timely intervention at this point provided the much needed impetus, stability, and legitimacy to the thrift and credit initiative. NABARD started with standardised accounts procedures and training programmes for the women functionaries associated with the thrift and credit programme.

This led to the NHGs being reorganised within along the lines of Self-Help Groups (SHGs); CDSs were linked to banks and micro finance was made an operational reality for the poor women of Alappuzha. This then started spreading to the other parts of the state.

NABARD’s intervention in the community organisation of Alappuzha and then the rest of the state, had an all India context to it.

SHG Bank Linkage Programme – The All India Context

Self-help groups (SHGs) as institutions of the poor had their origins in the community development projects of Non-Governmental Organisations (NGOs) in the early 1980s. By 1987, SHG was already well accepted as an organisational form and an institutional mechanism for poverty alleviation strategies.

MYRADA, PRADAN, ASSEFFA, and DHAN Foundation were pioneer NGOs of India’s SHG movement. In their interventions,

• A self-help group (SHG) consisted of 10-20 members drawn from a relatively homogeneous economic class (poor)
• Members were self-selected on the basis of existing affinities and mutual trust
• Groups met regularly at a fixed time and place and pool their savings into a common fund
• Members in the groups took need based loans from this common fund
• Groups developed their own rules and regulations
• Groups also developed their own sanctions for violations
• Meeting procedures and processes, norms for leadership, intensive training and handholding were designed to enable SHGs in a participatory democratic manner

Early successes of the SHGs enabled the pioneer ‘SHG-promoting NGOs’ to explore the possibility of lending to SHGs by formal financial institutions. The NGOs opened this channel through NABARD, seeking ways for SHGs - in spite of their informal status - to avail formal loans.

In 1992, the Reserve Bank of India (RBI) took the decision to enable commercial banks to lend to SHGs. NABARD passed the required guidelines and this opened the pathway for commercial banks to lend to informal SHGs without collateral.

The SHG Bank Linkage Programme, commonly known as the Indian Micro Finance Model, thus began in 1992. SHG programme soon started evolving into a national phenomenon.

This was the national context in which NABARD supported the CDS experiment in Kerala. In real experience, Kudumbashree did not get NABARD support at expected levels. On the other hand, NABARD kept supporting SHGs promoted by NGOs; the fact that the NABARD annual reports never recognised Kudumbashree NHGs is testimony its antipathy to Kudumbashree.

“NABARD’s bank linkage programme did not help us much in the early stages”, says Kesavan Nair, Programme Officer at Kudumbashree who looked after the expansion of the community network across the State in three phases. “They had been supporting NGO-promoted SHGs all along and had been slow in recognising our NHGs. This created lot of problems for us in the early stages”.