Formation Of Self Help Groups

To create employment and increase incomes in forest fringe communities, the Project will provide opportunities for members of JFMCs, EDCs, and PSS?s to conduct income generation activities (IGAs), which will include activities related to ecotourism. Group activities, ie, SHG activities, will be encouraged. The management manual that will be developed in an earlier stage will be referred to for effective management, implementation, and monitoring of IGAs by SHGs.

An SHG is a group of people who run a small enterprise for the objective of increasing their household income. For the Project, one SHG will consist of 5 to 20 members. Around 540 SHGs, or an average of three SHGs per intervention village, will be formed, and,most of the SHGs are expected to be new ones. SHGs can engage in both production activities such as agriculture, animal husbandry and handicraft, or in service businesses such as homestay owner and tour guide.

The main objectives of the SHGs to be supported by the Project will be as follows:
  • To achieve economic empowerment by increasing household incomes
  • To build the self-esteem and confidence of members
  • To mutually help and share ideas and knowledge among members to enhance IGAs
  • To access microfinance services through JFMCs, EDCs, and PSS?s for starting or expanding IGAs
  • To express concerns and opinions as a group on livelihood issues or forest management, including the use of forest products

For a SHG to obtain support from the Project, SHG members must belong to a member households of a JFMC, EDC or PSS because the Project will only support those willing to participate in joint forest management. In selecting the SHGs that will receive project support, priority will be given to those with women from households with low income and limited access to financial institutions. SHGs that consist of large-scale enterprises such as hotel owners with many employees will not be eligible for project support. SHGs are to be formed by JFMC, EDC, and PSS members who wish to start or expand their micro-enterprise and come together voluntarily. With the assistance of the Community Organizers, SHGs will then prepare a business plan.

A business plan will include 
  • the details, target, and schedule of the activity of the SHG; 
  • a plan for meeting the costs of the activity; and 
  • detailed information on its members. 

Selection of the activity to be carried out by an SHG should be guided by the results of the marketing study.

Together with the business plan, SHGs will submit an application requesting the approval of their establishment to the concerned JFMC, EDC or PSS. The Executive Committee of the concerned JFMC, EDC or PSS will appraise the application and approve it if it is deemed plausible. Once approved by the Executive Committee, SHGs will open their own bank account with the help of the Community Organizers. The Community Organizers will also assist SHGs in administrative procedures related to starting up their micro-enterprises.

Selection of IGAs
SHGs will select the IGA they wish to conduct under the guidance of Community Organizers. When selecting the IGAs, SHGs should be encouraged to utilize locally-available resources and technologies. Also, the marketability of the final products of the selected IGAs must be taken into consideration. The results of the marketing study conducted during the preparation work subcomponent should provide guidance for the IGAs. SHGs from the same JFMC, EDC or PSS are discouraged to select the same type of IGA because this may cause excessive competition within the village and result in the loss of profitability. This is also not desirable from the viewpoint of risk management.

Suggested IGAs are as follows:
  • Processing and sales of forest products such as herbs, timber, fuelwood, and fodder
  • Collection, breeding, and sale of wildlife such as wild piglets
  • Cultivation, value addition, and sale of medicinal plants
  • Collection and sale of NTFPs such as edible fern, mushrooms, stinging nettles, and bamboo shoots
  • Collection and processing of wild plants into products of high monetary value such as nettle cloth
  • Cultivation and sale of agricultural and horticultural products including large cardamom, ginger, and turmeric
  • Cultivation and sale of floricultural products
  • Animal husbandry such as dairy farming, poultry husbandry, piggery, and goat rearing
  • Production and sale of fermented food
  • Production of incense out of rhododendron and juniper
  • Production of bio-compost
  • Production and sale of traditional handicrafts and handlooms such as carpets, bamboo baskets, and brooms
  • Provision of ecotourism services, ie, hotelier, homestay provider, guide, porter, cook, pack animal operator, camp-site operator, rock climbing instructor, and cultural show organizer and performer

The marketing study should provide guidance on how the final products produced by SHGs could be marketed. For instance, the products can also be sold at the retail outlets in tourism facilities such as interpretation centers that will be developed under the ecotourism component. SHGs can also utilize locally-available marketing facilities such as Rural Produce Marketing Centers, which can be used by paying a nominal user fee.

Funds for SHGs
The approved SHGs are entitled to receiving the microfinance loans provided by their respective JFMC, EDC, or PSS if they meet the required conditions. The loans may be used by SHGs as initial capital to start and develop its micro-enterprise. For example, the funds may be used to purchase equipment or to establish or upgrade the facilities required for running the business. However, SHGs will need to prove that their operations are healthy. Details on the microfinance subcomponent are given later. Each SHG will be responsible for maintaining its accounts and executing its activities. The profits made should be deposited into its account to be utilized for implementation of other activities or for internal loaning among the SHG members.

Support to SHGs
JFMCs, EDCs, and PSS?s, with the support of the Project, will extend support to SHGs by training them.