SELF HELP GROUPS

INTRODUCTION:
Self-Help Groups (SHGs) are informal associations of people who
choose to come together to find ways to improve their living conditions. It
can be defined as self governed , peer controlled information group of
people with similar socio-economic background and having a desire to
collectively perform common purpose

A self help group is a small economically homogeneous affinity group of

the rural poor voluntarily coming to gather to save small amounts
regularly. Which are deposited in a common fund to meet member
emergency needs and to provide collateral free loans decided by the
group.

Most self-help groups are in India, though they can be found in other
countries, especially in South Asia and Southeast Asia. A SHG is
generally a group of people who work on daily wages who form a loose
grouping or union. Money is collected from those who are able to donate
and given to members in need.
Members may also make small regular savings contributions over a few
months until there is enough money in the group to begin lending. Funds
may then be lent back to the members or to others in the village for any
purpose. In India, many SHGs are linked with banks for the delivery of
micro-credit.

In 1991-92 NABARD started promoting self-help groups on a large

scale. And it was the real take-off point for the 'SHG movement'. In 1993,
the Reserve Bank of India also allowed SHGs to open saving accounts
in banks. Facility of availing bank services was a major boost to the
movement.

Objectives of SHG:
1. To inculcate the savings and banking habits among members.
2. To secure them from financial, technical and moral strengths.

3. To enable availing of loans for productive purposes.

4. To gain economic prosperity through loan/credit.

5. To gain from collective wisdom in organising and managing their own

finance and distributing the benefits among themselves.

6. To sensitize women of the target area for the need of SHG and its
relevance in their empowerment.

7. To create group feelings among women.

8. To enhance the confidence and capabilities of women.

9. To develop collective decision making among women.

10. To encourage the habit of saving among women and facilitate the
accumulation of their own capital resource base.

11. To motivate women taking up social responsibilities particularly

related to women development.

12. It acts as the forum for members to provide space and support to
each other.

GOAL OF SHG
Self-help groups are started by non-governmental organizations (NGOs)
that generally have broad anti-poverty agendas. Self-help groups are
seen as instruments for goals including empowering women, developing
leadership abilities among the poor and the needy, increasing school
enrolment and improving nutrition and the use of birth control. Financial
intermediation is generally seen more as an entry point to these other
goals, rather than as a primary objective. This can hinder their
development as sources of village capital, as well as their efforts to
aggregate locally controlled pools of capital through federation, as was
historically accomplished by credit unions.

FEATURES OF SHG
(i) People form their personal groups for the purpose of savings and also
lend money among themselves.

(ii) Rate of interest is lower than informal service providers.

(iii) They can also avail loans from banks if their savings are regular.

(iv) Decisions regarding the savings and loan activities are taken by
group members.

(V)All women SHGs from rural areas, are regarded as SHGs under
DAY-NRLM and will be eligible for interest subvention on credit upto ₹3
lakhs at the rate of 7% per annum on prompt repayment

Functions of Self Help Groups

● They try to build the functional capacity of poor and
marginalised sections of society in the domain of employment
and income-generating activities.
● They offer collateral-free loans to sections of people that
generally find it hard to get loans from banks.
● They also resolve conflicts via mutual discussions and collective
leadership.
● They are an important source of microfinance services to the
poor.
● They act as a go-through for formal banking services to reach
the poor, especially in rural areas.
● They also encourage the habit of saving among the poor.
.

Need for Self Help Groups

One of the chief reasons for rural poverty is the lack of access or
limited access to credit and financial services.

The Rangarajan Committee Report highlighted four major

reasons for lack of financial inclusion in India. They are:

● Inability to give collateral security

● Weak credit absorption capacity
● The insufficient reach of institutions
● Weak community network

It is being recognised that one of the most important elements

of credit linkage in rural areas is the prevalence of sound
community networks in Indian villages.

SHGs play a vital role in giving credit access to the poor and this
is extremely crucial in poverty alleviation.

They also play a great role in empowering women because

SHGs help women from economically weaker sections build
social capital.

Financial independence through self-employment opportunities

also helps improve other development factors such as literacy
levels, improved healthcare and better family planning.

Opportunities:

● SHGs often appear to be instrumental in rural poverty alleviation.

● Economic empowerment through SHGs, provides women the
confidence for participation in decision making affairs at the
household-level as well as at the community-level.
 ● Un-utilised and underutilised resources of the community can be
mobilised effectively under different SHG-initiatives.
● Leaders and members of successful SHGs bear the potentiality to
act as resource persons for different community developmental
initiatives.
● Active involvement in different SHG-initiatives helps members to
grow leadership-skills. Evidence also shows that often women SHG
leaders are chosen as potential candidates for Panchayat
Pradhans or representatives to Panchayati Raj Institution (PRI).

Purpose of Loan

● (i) The purposes for which the group will lend to the members should
be left to the common wisdom of the group.
● (ii) Loans to SHGs for group enterprises should be discouraged in the
initial stages as they have usually failed. Exemptions should be very
carefully examined and supervised.
● (iii) Loans to Self Help Groups are purpose neutral loans. Banks shall
embrace the concept of Total Financial Inclusion and meet the entire
credit requirements of the SHG members namely a) income
generation activities, b) social needs like housing, education,
marriage etc., and c) debt swapping. Eligible SHGs can be financed
directly and also under the following products, which covers the
housing needs, income generating activities and also have
component for consumption, to fulfil entire credit requirement of SHG
members:
● i) Sanction of cash credit limit for 3-5 years based on expected future
saving corpus of SHGs.
● ii) Sanction of term loan for project based requirement of SHGs.
HISTORY OF SHG:
The history of SHGs dates back to 1985, from the actions undertaken by
the Mysore Resettlement And Area Development Agency (MYRADA).
The SHG movement, under the leadership of MYRADA, first started in
the southern states. There is a general awareness in these states,
especially amongst women, regarding thrift and importance of cheap
credit. By 1986-87, there were around 300 SHGs in MYRADA's projects.
MYRADA imparted training to these groups on several grounds like
organizing meetings, setting agendas, keeping minutes and accounts
etc.

Over time several agencies like the National Bank For Agricultural And
Rural Development (NABARD), the Reserve Bank Of India (RBI),
leading NGOs, as well as multilateral agencies like International Fund
For Agricultural Development (IFAD) helped in the growth of the SHGs.

The history of SHGs can be broadly studied in two phases:

Phase 1(1987-1992):
In this phase, NABARD was the main agency for helping out SHGs.
NABARD undertook measures to assist MYRADA through a grant of INR
1 million in 1987. It then helped other NGOs involved in promoting
SHGs. In 1992, the RBI accepted the SHG model as an alternative credit
option.

Phase 2(1992-present):
In this second phase, the linkage of SHGs and banks was done, with the
unstinting support of RBI as well as IFAD. By March 2005, credit had
been extended to about 1,628,456 SHGs with a cumulative membership
of about 24 million families.
The first SHG was started in Dharmapuri district of Tamil Nadu in 1989.
Government of Tamil Nadu initiated Magilar thittam in 1997 to develop
the women in Tamil Nadu On the basis of its success from 1997 all the
district organizations receive a great benefit from world Agricultural fund.
The decade of the 1990s witnessed a rapid SHG movement. The
setting-up of NABARD and the introduction of SHG-bank linkage
programmes by NABARD acted as a catalyst for the development of
SHGs. Recognizing the role of SHGs, the RBI issued a circular
permitting the banks to lend SHGs to women. However, during the
decade, SHG lending by banks was primarily subsidy driven and target
oriented.

Evolution Stages of Self Help Groups in India

Every Self-help group usually goes through 3 stages of evolution stated
below:
1. Formation of group
2. Funding or Formation of Capital
3. Development of required skills to boost income generation for the
group
Many self-help groups are formed with the assistance of Self- help to
promote agencies.
As SHG are formed under the Swarna Jayanti Swarojgar Yojana
(SGSY), for SHGs subsidy would be 50 percent of the project cost
subject to a ceiling of Rs. 1.25 lakh or per capital subsidy of Rs.
10,000 which-ever is less. There is no monetary ceiling on subsidy
for minor irrigation projects for SHGs as well as individual
swarojgaris (self employed).

The SHGs may consist of 10-20 members and in case of minor

irrigation, and in case of disabled persons and difficult areas, i.e.
hilly, desert and sparsely populated areas, this number may be a
minimum of five. Self Help Groups should also be drawn from the
BPL list approved by the Gram Sabha.
Since the inception of the programme of SGSY (1st April, 1999)
22.52 lakh self-help groups have been formed covering 66.97 lakh
swarojgaries. These include 35.54 lakh members of the SHGs and
31.43 lakh Individual swarojgaries who have been assisted with a
total investment of Rs. 14403.73 crore. Out of total swarojgaries
assisted, SCs/STs were 45.54 percent and women 47.85 percent.
During 2006-07, the central allocation scheme was Rs. 1200 crore.

Structure Of SHG
A SHG is a community-based group with 10-25 members. Members are
usually women from similar social and economic backgrounds, all
voluntarily coming together to save small sums of money, on a regular
basis. They pool their resources to become financially stable, taking
loans from their collective savings in times of emergency or financial
scarcity, important life events or to purchase assets. The group members
use collective wisdom and peer pressure to ensure proper end-use of
credit and timely repayment. In India, RBI regulations mandate that
banks offer financial services, including collateral free loans to these
groups, on very low interest rates. This allows poor women to circumvent
the challenges of exclusion from institutional financial services. This
system is closely related to that of solidarity lending, widely used by
microfinance institutions.
Beyond their function as savings and credit groups, SHGs offer poor
women a platform for building solidarity. They allow women to come
together and act on issues related to their own lives including health,
nutrition, governance and gender justice.

TYPES OF SHG:
The various types of Self-help promoting agencies are stated below:
1. Non-governmental agencies
2. Government
3. Poverty management programmes
4. State & commercial banks
 5. Microfinance institutions
6. SHG Federations
7. SHG leaders/Entrepreneurs

Mode of working:
● SHGs may be registered or unregistered.
●
Comprises a group of micro entrepreneurs, coming together
voluntarily to pool money.
●
Members agree to contribute to a common fund and extend mutual
help in case of emergencies.
●
Loans may be taken by the members from the common pool of the
group.
●
Collective wisdom and peer pressure are used to ensure proper
end use of loans and timely repayment.
●
To make accounting simple, flat interest rates are used for most
calculations.
●
Once SHGs achieve a record of regular returns and have achieved
a sizable pool of common capital, they become eligible to borrow
from banks under NABARD's SHG-bank linkage program.
●
The southern states have shown a better record than all others in
case of SHGs availing bank credit.

Benefits of SHGs
● Social integrity – SHGs encourage collective efforts for combating
practices like dowry, alcoholism etc.
● Gender Equity – SHGs empowers women and inculcates leadership
skills among them. Empowered women participate more actively in
gram sabha and elections.
● There is evidence in this country as well as elsewhere that
formation of Self-Help Groups has a multiplier effect in improving
women’s status in society as well as in the family leading to
improvement in their socio-economic condition and also enhances
their self-esteem.
● Pressure Groups – their participation in governance processes
enables them to highlight issues such as dowry, alcoholism, the
menace of open defecation, primary health care etc and impact
policy decisions.
● Voice to marginalized section – Most of the beneficiaries of
government schemes have been from weaker and marginalized
communities and hence their participation through SHGs ensures
social justice.
● Financial Inclusion – Priority Sector Lending norms and assurance
of returns incentivize banks to lend to SHGs. The SHG-Bank linkage
programme pioneered by NABARD has made access to credit
easier and reduced the dependence on traditional money lenders
and other non-institutional sources.
● Improving efficiency of government schemes and reducing
corruption through social audits.
● Alternate source of employment – it eases dependency on
agriculture by providing support in setting up micro-enterprises e.g.
personalised business ventures like tailoring, grocery, and tool
repair shops.
● Changes In Consumption Pattern – It has enabled the participating
households to spend more on education, food and health than
non-client households.
● Impact on Housing & Health – The financial inclusion attained
through SHGs has led to reduced child mortality, improved
maternal health and the ability of the poor to combat disease
through better nutrition, housing and health – especially among
women and children.
● Banking literacy – It encourages and motivates its members to
save and act as a conduit for formal banking services to reach
them.

How does an SHG work?

● A group of 10–20 women from similar economic backgrounds

come together and form a Self-Help Group (SHG). The details

of the SHG are captured at the block level. Each SHG is given a

unique ID and name for identification. SHGs are ‘’informal’’

‘association of persons’ and do not require any separate

registration.

● Each SHG picks a group President, Vice President and

bookkeeper. The role of the bookkeeper is to maintain the

accounts and activities that happen in each meeting.

 ● The group then decides to meet every month or every week to

come together and start saving a fixed amount of money. Once

the money reaches a certain pool, the group starts internal

lending (i.e) lending within the group members on the need

basis.

● The attendance of the members, savings, credit disbursed,

repayments and minutes of the meeting are recorded by the

bookkeeper in a ledger.

● This ledger is later taken to the bank to start a savings bank

account in the name of the group.

Role of a self-help group:

Every self-help group is evaluated by the village federation from

time to time based on the Panchasutra principles. According to

which a good Self Help Group is on one

● Which conducts meetings at regular intervals

● The members of the group do regular consistent savings.

● Which regular inter loaning happens within the group.

 ● Which the member do timely repayments

● Where the book of accounts are maintained up to date

Role of an SHG leader:

● SHG leader is chosen by the members of the group and the

leadership is rotated to different members from time to

time.

● They motivate the SHG members to follow the

panchasutra.

● They act as a link between the SHG and other institutions

such as banks.

Role of a bookkeeper:

● The bookkeeper of the SHG is a literate member of the

group or any literate person known to the group members.

● The bookkeeper is selected by the SHG member and

trained by the SHG bookkeeping.

Each bookkeeper has the following books or registers to maintain.

1. Member passbook — Passbook for each member of the

SHG

2. Minutes book- Record to maintain their minutes of the

meeting of the SHG

3. Savings book — Ledger to maintain the savings pooled by

the SHG members.

4. Cashbook — Ledger to maintain cash in hand and the cash

balance in the bank.

5. Loan book — Ledger to maintain the loan disbursed to the

members of the SHG.

Opening a bank account:

For an SHG to open a bank account, these are the following steps:

● A resolution is passed by SHG to open a bank account in

the service area branch or the nearest bank branch. This

 resolution should have all the signatures of the SHG

members.

● As a part of the resolution, three office bearers should be

authorised to operate the savings bank account with a

condition that any two office bearers can transact with the

bank.

● An application to open a savings bank account is prepared

and submitted to the bank manager by the office-bearers.

● A seal for the SHG group needs to be made and the office

bearers need to submit their proof of identity and address

as a part of the KYC norms.

● The office bearers should carry the above documents and

fill the account opening for opening the bank account.

● Any transaction with the bank will have to be authorised by

at least two office bearers nominated.

Credit available to the Self Help Groups:

Self-help groups have access to multiple sources at various stages of

the group. An SHG has access to the following funds:

1. Member savings: The money pooled in by the SHG

members as a part of their regular interval savings.

2. Interest income: The money lent to the members are

repaid with interest and the interest income contributes to

the SHG funds.

3. Funds from Federation: NRLM provides various funds

to the federations that are to be redistributed to the eligible

SHGs based on their needs and upon meeting certain

criteria. The revolving fund (RF) is given to eligible SHGs

at a VO level to catalyse the process of internal lending.

The Community investment fund is given at the cluster

level under three categories which act as seed capital,

vulnerability re-education and livelihood enhancement.

4. Bank Loan: A bank loan is a formal credit received from

banks by linking the SHG to a bank account. Each SHG is

eligible for a credit amount of Rs. 10 Lakhs over a period of

5–6 years. These funds are distributed as either Cash

Credit Limit or as Term Loan. The bank starts with a

 rotating credit of Rs.1 Lakh or 6–8 times of their corpus

amount during their first bank linkage.

MINIMUM ELIGIBILITY OF A SHG

a) The Group should be in existence for at least six months.

b) The Group should have actively promoted the savings habit.

c) Groups could be formal (registered) or informal (unregistered).

d) Membership of the group could be between 10 to 25 persons.

e)SHG should be in active existence at least since the last 6 months as per the

books of account of SHGs and not from the date of opening of S/B account

f)From one family, only one person can become a member of an SHG. (More families

can join SHGs this way. The group normally consists of either only men or of only women

HOW TO GET MEMBERSHIP IN A SELF HELP GROUP?

You can become a member of a self-help group in two ways, first

online and second offline.

(i)OFFLINE:

Offline can also be a member of Self Help Group as we are called Self Help

Group itself and this is a Hindi adaptation of this. There are many Self Help Groups

in your village and towns which have already started in your village. Is done.

You can become a new member by contacting such women who are already

connected in this group, by registering yourself in a self-help group, besides this

self-help group is formed by a special person in your village such as a teacher’s

village. Head or Anganwadi center operators, you can also contact them and add

them to the offline self help group.

(ii)ONLINE

You can register online to become a member of the Self Help Group.

● To register online, first of all you have to go to

www.kviconline.gov.in

● After clicking on the link, you will directly go to the online registration

page.

● Where you will see a form, you have to read all the information sought

in this form carefully.

● And all the information in the application has to be filled in correctly.

● After successfully filling all the information, a self-help group will be

registered and you will be made an individual group, thus you can easily

become a member of SHG group.

Criticism of the SHGs

1.In certain cases, due to lack of continued official support, the micro
enterprises started by women SHGs have collapsed, as has happened
in case of the Annai Theresa Women's SHG.
2.The educational status of the members is also below par, making
financial management difficult. Also lack of vocational education makes
diversification into technical enterprises almost impossible.
3.Aggregate data regarding actual governance of the SHGs: whether
groups once formed continue to function effectively or not and other
related themes are yet to be published.
4.The discontinuation of the functions of the SHGs, lack of cooperation
between the members, unavailability of bank linkages, favoritism among
members are some of the other issues that need to be addressed.
5.Increased work burden and responsibility of the household invariably
falls upon women, stagnating the SHG movement.

NABARD's 'SHG Bank Linkage' program

Many self-help groups, especially in India, under NABARD's 'SHG Bank
Linkage' program, borrow from banks once they have accumulated a
base of their own capital. This model has attracted attention as a
possible way of delivering microfinance services to poor populations that
have been difficult to reach directly through banks or other institutions.
"By aggregating their individual savings into a single deposit, self-help
groups minimize the bank's transaction costs and generate an attractive
volume of deposits. Through self-help groups, the bank can serve small
rural depositors while paying them a market rate of interest."
According to a report from 2006, NABARD estimates that there are 2.3
million SHGs in India, representing 33 million members, that have taken
loans from banks under its linkage program to date. This does not
include SHGs that have not been borrowed. A study conducted by S
Chakrabarti in 2004 said that organization like SHG can be an effective
tool for "alleviating poverty"."The SHG Bank Linkage Programme since
its beginning has been predominant in certain states, showing spatial
preferences especially for the southern region – Andhra-Pradesh, Tamil
Nadu, Kerala, and Karnataka. These states accounted for 57% of the
SHG credits linked during the financial year 2005–2006."
NABARD basically through its district development managers helps in
forming self help groups in their respective districts and provide a bit of
initial financial assistance to them. Once the group becomes operational
for a particular time period and has enough savings, NABARD supports
them through its credit linkage program with any bank that is present in
their district, mainly an RRB.
DIFFERENCE BETWEEN COOPERATIVE SOCIETY

AND SHG:

• The main difference between cooperatives and Self help Groups is that

cooperatives are a group of Professionals usually belonging to the same profession

like farming. While self help Groups are the groups of rural women who belong to

different occupations, they may be house maids, labourers etc.

• The resources pooled in cooperatives is large and of high value while in SHGs the

collection is small made from the wages of the poor women.

• The pooled resources in cooperatives are used in their industrial purpose like

setting up a dal mill, sugar Mill etc or The resources are submitted in banks as

collateral to avail for large loans. While the SHGs, as discussed above, use the

money to give loans to its members for repairing their houses, generate self

employment opportunities like tailoring, for releasing mortgaged land etc.

• Cooperative societies are formed so that these people can pool their resources,

generate huge profits and share it among themselves and increase their incomes

while SHGs are formed in places where banks are not easily available.

How is Self Help Groups (SHGs) helping in changing the lives of

millions across India?

The Self help groups in India are doing a social transformation in India. In India it is

targeted at the economically poor and women. For many decades the women of India

had been dependent on the menfolk for food and other essential family requirements.

But the self-help groups have changed it. It provides micro credit to women groups in
India and they are able to indulge in small business or enterprise activity and earn

some money. It reduces the burden of many families and it directly helps the poor

families in India in improving their health and education. The Government of India is

actively promoting it.

NABARD is an Apex development bank that plays a significant role in it.

THE FIRST SGH IN INDIA:

The self-help group of Ahmedabad’s Textile Workers’ wives, organized by Kasturba Gandhi

during the prolonged textile strike ,which led to starvation of the families, was the first

organized self-help group with economic survival as focus. There were attempts earlier to

start SHGs collecting fistfuls of grains from every family and converting it into cash { Mushti

fund] to support old age homes,orphanages, windows shelters etc. I know Primary and

Secondary schools which were supported this way by determined communities which

valued Education.

SEWA [Self Employed Women's Association,Ahmedabad] run by Ms Ela Bhatt is the first

registered Self Help Group, {It is my impression ] It is a post Independence organization, and

draws inspiration from Gandhian values.

Advantages of financing through SHGs

● An economically poor individual gains strength as part of a group.

● Besides, financing through SHGs transaction costs for both lenders and borrowers.

● While lenders have to handle only a triple SHG account instead of a large number

of small-sized individual accounts, borrowers as part of an SHG minimize or travel

(to and from the branch and other places) for completing paperwork and on the

loss of workdays in canvassing for loans.

 ● Where successful, SHGs have significantly empowered poor people, especially

women, in rural areas.

● SHGs have helped immensely in reducing the influence of informal lenders in rural

areas.

● Many big corporate houses are also promoting SHGs at many places in India.

● SHGs help borrowers overcome the problem of lack of collateral. Women can

discuss their problem and find solutions for it.

SHG’s help in pooling the savings of the members, who are poor people
●
Members can get timely loans for a variety of purposes
●
They get loans at a reasonable rate of interest.
●
It helps borrowers to overcome the problem of lack of collateral and documentation.
●
It saves them from exploitation of the money lenders.
●
This interest income becomes an extra source of income of the members
●

DISADVANTAGES OF FINANCING THROUGH SHG:

● Members of a group do not necessarily come from the poorest families.

● Though there has been social empowerment of the poor, the economic

gain to bring about a qualitative change in their life has not been

satisfactory.

● Many of the activities undertaken by the SHGs are still based on primitive

skills related mostly to primary sector enterprises. With poor value

addition per worker and prevalence of subsistence level wages, such

 activities often do not lead to any substantial increase in the income of

group members.

● There is a lack of qualified resource personnel in the rural areas who

could help in skill upgradation or acquisition of new skills by group

members. Further, institutional mechanisms for capacity building and

skill training have been lacking.

● Poor accounting practices and incidents of misappropriation of funds.

● Lack of resources and means to market their goods.

● SHGs are heavily dependent on their promoter NGOs and government

agencies. The withdrawal of support often leads to their collapse.

Problems Faced by SHGs

The SHGs face problems in different areas.

The important problems are briefly stated below:

1. Ignorance of Members/Participants:

Even though the authorities take measures for creating awareness

among the group members about the schemes beneficial to them, still
the majority of the group are unaware of the schemes of assistance
offered to them.
Many are Ignorant about the scheme.

2. Inadequate Training Facilities:

The training facilities given to the members of SHGs in the specific areas
of product selection, quality of products, production techniques,
managerial ability, packing, and other technical knowledge are not
adequate to compete with that of strong units.

3. Problems Related with Raw Materials:

Normally each SHG procures raw materials individually from the

suppliers. They purchase raw materials in smaller quantities and hence
they may not be able to enjoy the benefits of large scale purchase,
discount, credit facilities etc.

Moreover, there is no systematic arrangement to collect raw materials in

bulk quantities and preserve them properly. There is no linkage with
major suppliers of raw materials. Most of the SHGs are Ignorant about
the major raw material suppliers and their terms and conditions. All
these causes high cost of raw materials.

4. Problems of Marketing:

Marketing is an important area of functioning of the SHGs. However

they face different problems in the marketing of products produced by
them.

Following are the major problems relating to marketing.

(a) Lack of sufficient orders.

(b) Lack of linkage with the marketing agencies.

(c) Lack of adequate sales promotion measures.

(d) Lack of permanent market for the products of SHGs.

(e) Absence of proper brand name.

(f) Poor/unattractive packing system.

(g) Poor quality of products due to the application of traditional

technology, resulting In poor market,

(h) Stiff competition from other major suppliers.

(i) Lack of a well defined and well knit channel of distribution for
marketing.

5. Lack of Stability and Unity Especially among women SHGs:

In the case of SHGs dominated by women, it is found that there is no

stability of the units as many married women are not in a position to
associate with the group due to the shift of their place of residence.
Moreover, there is no unity among women members owing to personal
reasons.

6. Exploitation by Strong Members:

It is also observed that in the case of many SHGs, strong members try to
earn a lion’s share of the profit of the group, by exploiting the ignorance
and illiterate members.
7. Weak Financial Management:

It is also found that in certain units the return from the business is not
properly invested further in the units, and the funds diverted for other
personal and domestic purposes like marriage, construction of house etc.

8. Low Return:

The return on investment is not attractive in certain groups due to

inefficient management, high cost of production, absence of quality
consciousness etc.

9. Inadequate Financial Assistance:

It is found that in most of the SHGs, the financial assistance provided to

them by the agencies concerned is not adequate to meet their actual
requirements. The financial authorities are not giving adequate subsidies
to meet even the labour cost requirements.

10. Non-co-operative Attitude of the Financial Institutions:

The Financial Institutions do not consider SHGs seriously while

providing finance and other help.

11. Inadequate and ill-trained staff to meet the challenges:

The attitude of the staff of the rural development department is not

encouraging. They are not well trained to accept the challenges and
equip the SHGs self-reliance.

12. Inadequate Support from Line Department:

For obtaining assistance and support, the group members have to
approach the line officers. However the line officers are not cooperative
with the SHGs. This will hamper the very objective of the schemes.

Suggestions to Minimise the Problems Faced by SHGs:

The following suggestions are offered to minimise the above

mentioned issues of SHGs:

1. Information about locally available materials and their varied uses

should be disseminated to SHGs. Proper encouragement and training
should be given to them to make innovative products by using these
materials. In order to have a knowledge base about the availability of
materials, in panchayat levels, surveys can be conducted under the
auspices of local authorities.

2. In order to solve the various problems relating to marketing of SHGs,

the state level organisations should extend the activities throughout the
state instead of limiting its operations in a particular area.

3. Various SHGs functioning in a particular panchayat area can form a

co-operative society. This society may be entrusted with the task of
marketing the products of different SHGs under a common brand name.
Further, the society can undertake sales promotion activities and procure
rare raw materials for the benefits of member SHGs.

4. Non-Government Organisations (NGOs) can play a significant role in

empowering women entrepreneurs by providing basic education,
motivation training, financial help and so on.
5. All the members in the SHGs may not have the same calibre and
expertise. NGOs can identify the inefficient members of the group and
can impart proper training to them in order to make them competent.
For this purpose, short term training programmes can be arranged at the
panchayat level.

6. Frequent awareness camps can be organised by the Rural

Development department authorities to create awareness about the
different schemes of assistance available to the participants in the SHGs.

7. Lastly, arrangements may be made by the financial institutions for

providing adequate financial assistance to the SHGs strictly on the basis
of their actual performance without any discrimination of caste, politics
etc.

The emerging changes in the values and attitudes of the members of the
SHGs are a clear manifestation of socio-economic empowerment
interventions yielding relatively quicker results. The socio-economic
programmes reinforce each other and promote all-round development of
the children, the women, the households and the communities.

It is a process which ultimately leads to self-fulfillment of each member

of the society. It is in this direction that SHGs are moving towards
fulfilling their objectives with a meaningful strategic direction.

Measures to Make SHGs Effective

 ● The Government should play the role of a facilitator and promoter, create
a supportive environment for the growth and development of the SHG
movement.
● Expanding SHG Movement to Credit Deficient Areas of the Country -
such as Madhya Pradesh, Rajasthan, States of the North-East.
● Rapid expansion of financial infrastructure (including that of NABARD)
and by adopting extensive IT enabled communication and capacity
building measures in these States.
● Extension of Self-Help Groups to Urban/Peri-Urban Areas – efforts
should be made to increase income generation abilities of the urban poor
as there has been a rapid rise in urbanisation and many people remain
financially excluded.
● Positive Attitude – Government functionaries should treat the poor and
marginalised as viable and responsible customers and as possible
entrepreneurs.
● Monitoring – Need to establish a separate SHG monitoring cell in every
state. The cell should have direct links with district and block level
monitoring systems. The cell should collect both quantitative and
qualitative information.
● Need Based Approach – Commercial Banks and NABARD in
collaboration with the State Government need to continuously innovate
and design new financial products for these groups

Self Help Groups in India

● Kudumbashree in Kerala

The Kudumbashree project was started in Kerala in 1998, as a community

action to eradicate poverty. It has become the largest women-empowering
project in India. There are 3 components namely, microcredit,
entrepreneurship and empowerment. Kudumbashree is a government
agency.

● Mahila Aarthik Vikas Mahamandal (MAVIM) in Maharashtra

SHGs in Maharashtra were unable to cope with the growing volume and
financial transactions and needed professional help. Community managed
resource centre (CMRC) under MAVIM was launched to provide financial
and livelihood services to SHGs. CMRC is self-sustaining and provides
need-based services.

Details of Self Help Groups in Tamil Nadu

1 6.96 lakh
No. of SHGs

103.32 lakh
No. of SHG Members

2 4.67 lakh
No. of Rural SHGs

69.28 lakh
No. of Members

3 2.29 lakh
No. of Urban SHGs

34.04 lakh
No. of Members

4 Rs.8,921 crore
Total Savings of SHGs
 5 5.98 lakh
No. of SHGs given Seed Money

6 Rs.65,930 crore
Cumulative credit availed by SHGs
(2011-2020)

SUCCESS STORY OF SHG

Ambe Mahila Mandal

Mrs. Kokilaben Goswami, a resident of Kherva village in Gujarat’s Mehsana

district, has maintained a beauty salon because her husband’s salary was
insufficient to meet her family’s demands. She met Krishi Vigyan Kendra
Mehsana and took part in training programs on value addition in spices,
such as turmeric and coriander, as well as marketing strategies.

Experts from Krishi Vigyan Kendra counselled her on forming a Self Help
Group and encouraged seven women to start small businesses through it.
Under the technical advice and collaboration of Krishi Vigyan Kendra, they
formed a Self Help Group called “Ambe Mahila Mandal.” She started her
business with Rs.5000 and purchased raw material kits from Ahmedabad
wholesale market, such as soap, detergent powder, Vicks, Vaseline, and so
on.They began small-scale production and sold the product to members of
their Self Help Group and other nearby residents.
Self Help Group members got confidence to create and run a small
business after the initial success. They thereafter bought materials from
wholesale markets and sold them in their community and adjacent villages.

They also began preparing several spices such as chilli, turmeric, and
coriander powder in response to customer demand. Krishi Vigyan Kendra
assisted them in purchasing a packaging sealing equipment.

Self Help Group set up stalls and sold products at Krishi Vigyan Kendras
National Seminar on Acid Lime, Women Day Celebration, and Krishi Mela,
among other events. Customers were really satisfied with the
products.Their current monthly income is Rs.10,000 per member, which
has allowed them to improve their lifestyle.

In India, women’s self-help groups combat the

COVID-19 (Coronavirus) pandemic
With 1.3 billion Indians in the midst of an unprecedented 40-day lockdown
to defeat the coronavirus, the collective strength of women’s self-help
groups (SHGs) has come to the fore.
“The women’s movement that started as a leap of faith some 15 years ago
has proved to be an invaluable resource in these difficult times. Our
partnership with the Indian government in building social capital among the
rural poor has paid off in spades,” said Gayatri Acharya, who leads the
World Bank’s $750 million support for India’s National Rural Livelihoods
Mission.
Over the past two decades of the Bank’s association, India’s SHG
movement has evolved from small savings and credit groups that sought to
empower poor rural women, into one of the world’s largest institutional
platforms of the poor. Today, 67 million Indian women are members of 6
million SHGs.
Conclusions:

Self-help group is a useful platform to enhance women's health through

increased knowledge and awareness on health issues, and financial
security during health emergencies etc. it’s very active in providing
income generating activities. However there is no significant
improvement in health behaviour or knowledge about health related
issues.

Self help groups can be established in success even in resource-poor

settings without a well established user movement in existence.

These groups have a significant impact in advocacy efforts and might

have a positive impact on quality of life for their members.

However, to ensure long term sustainability , there is a high need for a

legal framework.

BIBLIOGRAPHY

1. https://www.drishtiias.com/
2. https://www.topperlearning.com/
3. https://en.wikipedia.org/
4. GOOGLE
5. https://vikaspedia.in/self-help-groups/overview-of-shgs
6. https://www.quora.com/
7. Feature story by World Bank dated 11 April,2020