The Decision-Making Matrix (DMM)

The Decision Making Matrix (DMM) is used as tool for evaluating the embeddedness of each of the actors in governance through their roles and responsibilities in decision making powers in form and in practice (Cécile and Dorothée 2006). The indicators of governance are drawn based on CERISE and IRAM’s (2005) governance analysis of microfinance organisations.

In the current research of rural and urban SHG, the DMM helps to know the embeddedness of different actors as internal stakeholders namely- SHG members, group leaders, elders in the group and external stakeholders like SHG staff, bank officials, NGO staff and government staff in the decision making process and functioning of SHGs. The variables like diversity of actors, discrepancy in

Generally, it is defined as “excise of political, economic and administrative authority in the management of a country’s affair at all levels for development” (Blewitt 2008; Smouts 1998; UNDP 1997). Further, the “Governance” is understood as the body of institutions /rules, enforcement mechanisms and corresponding interactive processes which together coordinate and bring into the line along with the involved target actors (Huppert et al. 2003). In similar vein, governance refers to- “formal and informal, vertical and horizontal processes with no priori preference (Hufty 2009) and does not presuppose vertical authority and regulatory power as the concept” (Young 2002). Such a horizontal and vertical interplay has larger part of governance processes taking place between actors at different levels along with involving interactions within levels. In nut shell, “Governance” at the grassroot level – reflects the power structure and the influence in decision making process related to organisational activity and also at wider community development (Sutra 2008). Simplifying many discussed definitions, “Governance” is about ways of making decisions regarding collective problems thereby creating norms, rules and institutions for development

Since such group acts as a form of collateral for the members with few or no assets for transferring the risks associated with information asymmetries from individual to the joint liability of the group particularly for loan repayment (Thorp et al. 2005). Many scholars have shown that monitoring function of such groups is critical for the financial sustainability and empowerment in any microfinance groups (Wydick 1999; Montgomery 1996) through increasing access to finance and controls over income through savings – achieved deliberately through institutional design and targets (Thorp et al 2005). Further, the role of external agents like NGOs, government body and the refinancing banks although complex, but is of critical importance and sometime crucial for achieving the fine balance in group based microfinance projects (Bebbington 1996). Thus, how an individual action within the group is kept in line with meeting the objectives (Thorp et al. 2005) - forms the critical aspect of group functioning. Finally, although ample of literature available regarding the governance of microfinance organisations, but research investigations concentrating on SHGs context of actors involvement in different decision making process and participation in different activities of SHG functioning are scanty and rather unexplored. Hence, the insight into the governance