IDR Interviews | Aloysius Fernandez
Having pioneered the concept of SHGs, Aloysius Fernandez speaks about his journey over the last several decades, and how building institutions is the beginning of the basis of power for marginalised people.
Aloysius P. Fernandez (IDR, January 13, 2022):
Summary: Aloysius Fernandez on SHGs, Empowerment, and Civil Society
Background:
Aloysius P. Fernandez—economist, social worker, and Padma Shri awardee (2020)—revolutionised India’s financial inclusion landscape by pioneering Self-Help Groups (SHGs) while leading MYRADA. His approach focused on empowering poor communities through institution-building rather than charity.
Early Life & Influences
Born in Burma, raised by grandparents in Goa after fleeing during WWII.
Initially a Catholic priest (ordained 1953); worked closely with Church institutions including Caritas India during the Bangladesh refugee crisis (1971).
His field experiences in drought-affected regions reshaped his views—from charity and teaching skills to empowering people through access and collective strength.
Left the Church in 1976 to dedicate himself fully to social development.
Birth of the SHG Concept
In the 1980s, while working in rural Karnataka, Fernandez saw that cooperatives and Panchayati Raj institutions were dominated by local elites.
Poor farmers were exploited—large farmers borrowed cheap and lent at high interest rates.
Learned that cooperatives work when resources are shared equally (like milk), but fail when power is unequal (like credit).
Realised that real empowerment comes from building institutions of trust—groups of people who already relied on each other for support.
These “affinity groups” evolved into Self-Help Groups (SHGs): small, self-managed collectives fostering trust, savings, credit, and independence.
Core Philosophy
Empowerment lies in collective strength, not individual skill-building alone.
True change requires institutional capacity building—teaching groups how to meet, make decisions, and sustain themselves.
Dependency models (focusing only on needs) disempower people; building on existing community strengths enables self-reliance.
Institutions = Power. Collective organisation allows marginalized people to sustain movements and challenge inequality.
Role of Nonprofits
Nonprofits must facilitate community-led institutions, not lead on behalf of them.
This approach requires more time, resources, and flexibility than most donors allow.
Progress is nonlinear—communities move at their own pace amid social resistance.
Nonprofits must balance working with, around, and against the government when needed.
SHG Evolution and Institutional Challenges
Initially, Women’s Development Corporations (WDCs) promoted SHGs for empowerment.
Later, the government shifted SHGs under Rural Development Departments, turning them into financial intermediaries (NRLM/NRLP programs), losing the original empowerment focus.
Thus, many SHGs today serve as delivery arms for government schemes, not as autonomous people’s institutions.
Government–Civil Society Relationship
Historically, Indian governments have tolerated, not respected, civil society.
Presently, the relationship is transactional and restrictive, viewing nonprofits as threats rather than partners.
Politicians seek credit, bureaucrats prefer standardisation, and both limit the flexibility and diversity that civil society embodies.
Fernandez stresses balance and mutual respect—nonprofits must know when to collaborate, adapt, or challenge state power.
Future of Civil Society
The future lies in grassroots movements—farmers, Adivasis, Dalits, and informal sector workers.
Change may not come from Parliament but from collective action on the streets.
The next generation of social workers must immerse themselves in the informal sector, learn directly from communities, and uphold plurality, diversity, and equality—values rooted in the Indian Constitution.
Key Takeaways
Empowerment > Financial inclusion — SHGs are about dignity and self-determination.
Institutions create power — collective organisation sustains change.
Civil society needs respect, not tolerance.
Nonprofits must invest in time, trust, and institutional capacity.
Learning happens in the field, not in classrooms.