By: Dr. Satyawan Saurabh
A Self Help Group is a village-based financial mediation committee, usually consisting of 10-20 local women or men. When the formal financial system fails to help those in need, small groups volunteer to meet the needs of the economically vulnerable by collecting, saving, and lending money on a micro-scale. Self Help Groups have gained wide recognition in most of the developing countries of Asia where their presence is quite widespread.
Through micro-finance, many SHGs have created valuable assets and capital in rural areas and are sustaining livelihoods. Self Help Groups provide better access to credit on acceptable and convenient terms. Members can avail of loans for emergent productive and non-productive purposes on comparatively easy terms. This has reduced their dependence on local moneylenders to a great extent.
Government initiatives like the SHG-Bank linkage program are also enhancing their financial inclusion and easier access to credit from formal institutions. The approach of poverty alleviation through Self Help Groups is the most effective means and is compatible with the ongoing process of reforms based on the policy of decentralization. Self-help groups have provided access to microfinance to the poor and resulted in significant changes in their access to productive resources such as land, water, knowledge, technology, and credit.
Self-employment activities like collective farming, bee-keeping, horticulture, and sericulture have been taken up by the self-help groups. There are many successful cases where women’s self-help groups have come together to shut down liquor shops in their villages. Schemes like Aajeevika Express have helped self-help groups to create transportation in rural areas. Self Help Groups have been able to improve the skills of women to perform various tasks by managing the available natural resources.
It is estimated that more than 25 million rural women in India have benefited from self-help groups. As a group, they can help each other learn many things including money management as most of the women in rural areas have very little knowledge about money management. Kudumbashree has got great success in Kerala. Kudumbashree Cafe is an exemplary example of promoting entrepreneurship through Self Help Groups.
They also act as delivery mechanisms for various services such as entrepreneurship training, livelihood promotion activities, and community development programs. There are issues such as regional imbalances, less-than-ideal average loan size, lack of monitoring and training support by SHG federations, and increasing non-performing assets of SHG loans to banks. Several studies have also found issues related to governance, quality, transparency, and irregularities in their operations.
Government programs can be implemented through self-help groups.
This will not only improve transparency and efficiency but also bring our society closer to the self-governance envisioned by Mahatma Gandhi. Frequent and sustainable structural support from institutions promoting SHGs Awareness camps may be organized by the officials of the Rural Development Department frequently to create awareness about various schemes.
Timely capacity building of all members to make the group collective, with the government’s focus on digital financial inclusion, investing in the training of group members to transition to technology platforms will increase the impact on the livelihoods of these groups To make the most it is important to invest in providing the right kind of support. Self Help Group Movement’s emphasis on women’s entrepreneurship as an engine of development in rural India There should be no discrimination between members based on caste, religion, or political affiliation.
The Self Help Group approach is an enabling, empowering, and bottom-up approach to rural development that has provided considerable economic and non-economic externalities to low-income households in developing countries. The Self Help Group approach is being lauded as a sustainable tool to combat poverty, combining a for-profit approach that is self-sustaining, and a focus on poverty alleviation that empowers low-income households. It is increasingly becoming a means for governments in developing countries to exercise developmental priorities.
