SELF HELP GROUPS (SHGs) AND

WOMEN
• A Self Help Group is a group of people who
have common problems that cannot be
solved individually, and have therefore
decided to form a group and take joint action
to solve the problems.
• Self-help group are formed to promote
participation as a means to increase
efficiency, integrate group’s activities and
promote disadvantage groups in decision-
making
 Characteristics
• Small size: less than 20
• Composition- Majority Below poverty line.
• Primacy to exclusively Women Groups
• Maintaining simple basic record
 The concept of SHG is based on the following
principles:

• Self-help supplemented with mutual help can be

a powerful vehicle for the poor in their
socioeconomic development;
• Participative financial services management is
more responsive and efficient;
• The poor need not only credit support, but also
savings and other services;
• The poor can save and are bankable as clients,
result in wider out reach,
• lower transaction cost and much lower risk
costs for the banks;
• Creation of a common fund by contributing small
savings on a regular basis;
• Flexible democratic system of working;
• Loaning is done mainly on trust with a bare
documentation and without any security;
• Amounts loaned are small, frequent and for
short duration;
• Defaults are rare mainly due to group pressure;
• Periodic meetings non-traditional savings.
• Self-help group system is designed to
empowered the rural women below poverty
line. Economics and social empowerment of
women is one of the basic requirements for
the holistic development which has been
strongly emphasized by National Perspective
Plan for women 1988.
• Other policies of the Government including
National Policy for empowerment of women
2001 and National Plan of Action for
Empowerment of women 2003-2004. Each
one emphasize ensuring women their rightful
place in the society by empowering them “as
agents of socio-economic change and
development”.
 Why Women Groups?
• The members of the Self-help group can be
either men or women. However, women are
more marginalized than men as revealed
‘gender inequality’ in economics and social
sphere and gender issues poverty. Their
illiteracy and lack of awareness in rural areas
and tribal region aggravate the problems.
• Self-help groups are generally facilitated by
NGOs and increasingly advise and train
members in a variety of on- and off-farm
income-generating activities.
• NABARD
• IFAD (International Fund for Agriculture
Development)
• The RBI and NABARD has issued special
guidelines to all the banks to encourage
microfinance to SHGs.
• After the training, the SHG members started
micro-savings and credit activities, as each
member was asked to contribute at least Rs.
50 per month (~1 dollar), which could then be
used for internal micro-loans .
• The amount of money that SHG members of a
newly formed group can save each month is
very small, it became very clear early on that
there was a need for additional funding from
external sources to increase the amount of
money that would be available for micro-
loans.
• NABARD has started a larger micro-financing
program that is currently providing loans to
many SHGs and their members.
• Some of the SHG groups utilized their skills
and the loan to develop group activities.
Examples are: candle making, petty trade,
weaving, processed food, etc.
• In India where poverty still remain a major
problem, NGOs recognized micro finance as
one of the tool to attack poverty.
• They have facilitated the organization of SHGs
for a common-cause through a process of
social mobilization with varying entry points
like removal of illiteracy, basic health care,
access to local resources etc.
 Impacts of SHG

• Sustainable development among women.

• Skill development.
• The economic conditions of their families
improved.
• Financially included.
• Trained for the first time for a better
management of their home.
• Children continues their education.
• Higher enrollment of girls in school.
• Participation in social activities.
• Empowered to come out of social barriers.
• Running their own microenterprises.
 Condition for Effective SHG

• Each member of the group should be facing a

similar, crucial problem.
• Only when each member realizes that the
problem cannot be solved individually will the
member cooperate to act as a group.
• Persons who have the resources or power to
solve problems on their own should not be
part of the self-help group.
• For a joint and collective action to have the
best possible chance of success, each and
every person must be convinced that the
action being taken is the best possible one.
For this a great deal of discussion is required.
 Future Plans
• Have more women join and start SHG and
improve their economic activity
• To better serve low-income households for
women in rural areas.
• Link all women SHG with the micro-finance
program to establishing stable livelihoods and
improve their quality of life.
• Health insurance for more SHG members
 Challenges

• First is the capacity building of SHGs, which are in

need of support in accounting, financial
management, and organizational development.
• The second challenge is the gender focus in rural
financial services. Despite the focus in project
design, there were gaps during implementation.
Therefore, gender focus in designing and
implementing rural microfinance services should
be enhanced.
• The third challenge is how to link SHGs to
agricultural activities, which are of key
importance for the livelihoods of small farm
holders in India.
 Concluding remark:
SHGs are not only limited to providing financial
services but also they have turned out to be
focal point for purveying various services to
the poorest of the poor in many ways. SHG
program has become the common vehicle in
the development process.