The uneven pattern continued in 2006. Nevertheless, the decline in the coefficient of variation from 2000 to 2006 indicates convergence among states. We observe a decline in the coefficient of variation from 1.91 in the first period to 1.50 during the period of 2002 to 2004
if we exclude Tripura with a strong pace of 37,200 % (2 to 746). Overall, the decline in the
pace of increasing numbers of SHGs took place in the period from 2004 to 2006. During the same period, the coefficient of variation increased slightly, to 1.81. This coefficient decreases to 1.28, when excluding Mizoram, Nagaland and Meghalaya, with a strong pace of 4,200, 3,644 and 3,593 % respectively (from 22 to 946, 9 to 337, and 15 to 554). Between 2004 and 2006, Gujarat’s SHG members increased less than five times (2,099 to 11,806), while Himachal Pradesh’s SHG members increased by 66 % (4,353 to 7,233).
Several states fluctuated drastically in the number of SHGs. Himachal Pradesh, Punjab and Assam, for example, experienced rapid growth in their numbers of SHGs between 2000 and 2002, but between 2002 and 2006, the same states all witnessed declines. Those states that started the SHG Banking Linkage Programme earlier have an overall low growth rate, and those states which started the programme at a later stage have a high growth rate. This is, for example, the case for Mizoram, Nagaland, Meghalaya, Manipur and Sikkim.
The legitimacy of microfinance is beyond doubt. In a context of growing financiarisation, the poor more than anybody else need microfinance services. In the same vein, in a context where democracy remains mainly formal and inaccessible to the poorest, the collective approach (which is at the core of Indian microfinance through the Self-help-group concept) undeniably represents a tool for democratic practices and therefore for grass roots development, especially for women.
In practice, however, real effects are much more limited than what is usually presented. How far and under what conditions can microfinance combat poverty and contribute to grass roots development? The question is all the more acute in India, where microfinance has grown very fast and intensively over the last decade. After a first cycle of growth where the number of clients went from a few thousand to several millions, microfinance is nowadays at the core of many agendas, be they public or private. Indian microfinance, both in terms of the number of clients and the volume of credit disbursed, is not anecdotal any more. Because of the socio-