RESEARCH

What is self help group :-

1. A Self-Help Group (SHG) is a small, community-based group, often comprising 10-20
members with common social or economic interests, typically women in rural or low-income
areas. Members pool their savings to create a common fund used for mutual support, financial
assistance, and small loans at low interest. SHGs promote self-reliance, enabling members to
tackle shared challenges, develop skills, and improve their livelihoods. These groups often
receive training in areas like financial management and entrepreneurship, fostering economic
independence. SHGs also contribute to community development by raising awareness on health,
education, and social issues, creating a foundation for empowerment and collective growth.

Source – chatgpt

2. 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.[1][2] 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.[3]

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.[4][2]

Source – Wikipedia
The structure of self help group :-
1. A Self-Help Group (SHG) typically has a simple, member-driven structure designed for
mutual support and financial inclusion. Each SHG comprises 10-20 members, often from
similar socioeconomic backgrounds, who come together voluntarily. Members elect a
president, secretary, and treasurer to manage group activities, recordkeeping, and finances,
ensuring democratic decision-making and accountability.

Members meet regularly, usually weekly or monthly, to contribute a fixed amount to a shared
savings fund. This pooled fund becomes the basis for internal lending, with members able to
borrow at low interest rates for various needs. The group maintains records of contributions,
loans, and repayments, encouraging transparency and discipline.

SHGs often receive guidance from non-governmental organizations (NGOs) or government

agencies, which help with training in financial literacy, skill development, and entrepreneurship.
The collective structure empowers individuals by creating a support network, enabling economic
resilience, and fostering community development. This structure helps SHGs become
sustainable, self-managed units for financial and social empowerment.

Source – chatgpt
2.

History of self help group :-

The concept of Self-Help Groups (SHGs) traces its roots back to community-based mutual aid
and cooperative movements that emerged globally in the 19th and early 20th centuries. SHGs in
their current form began to develop in the 1970s, particularly in countries like India and
Bangladesh, as a response to widespread poverty, lack of financial access, and gender inequality.

The Grameen Bank in Bangladesh, founded by Dr. Muhammad Yunus in 1976, is often credited
with pioneering the idea of microfinance and organizing poor individuals, especially women,
into small groups for credit access. This model demonstrated that small groups of low-income
individuals could effectively manage savings and loans, leading to improved economic and
social conditions. This idea soon spread across Asia and Africa.

In India, SHGs gained formal momentum in the 1980s, when non-governmental organizations
(NGOs) started organizing groups of rural women to promote savings and credit activities. This
approach was further reinforced by the National Bank for Agriculture and Rural Development
(NABARD) in 1992 through its SHG-Bank Linkage Program, which enabled SHGs to access
formal banking services and credit.

By the early 2000s, SHGs had grown substantially, with millions of groups operating across
India, supported by government initiatives like the Swarnjayanti Gram Swarozgar Yojana
(SGSY) and later the National Rural Livelihood Mission (NRLM). SHGs became instrumental in
addressing poverty, promoting women’s empowerment, and enabling financial inclusion in rural
areas.

Source – chatgpt

How to form a self help group:-

To form a Self-Help Group (SHG), begin by gathering 10-20 individuals from similar
socioeconomic backgrounds who share common goals or challenges. SHGs are often composed
of women in rural communities, focused on saving money, supporting one another, and
achieving financial independence.
After forming a group, conduct an initial meeting to outline the SHG’s purpose, benefits, and
expectations. During this meeting, elect leaders, typically a president, secretary, and treasurer,
who will manage activities, recordkeeping, and finances. This ensures that the group is
organized, transparent, and operates democratically.

Agree on a regular savings amount, collected weekly or monthly, which builds a shared fund.
Members can borrow from this fund at low interest, setting loan amounts, repayment terms, and
any interest rates collectively. Good recordkeeping is essential to track all contributions, loans,
and repayments.

Next, open a bank account in the SHG’s name, with designated signatories. A formal account
allows the group to link with banks or microfinance institutions for larger loans, expanding its
reach and impact. Conduct regular meetings to save, review finances, approve loans, and provide
mutual support. Additionally, seek training in financial management and entrepreneurship from
NGOs or government agencies to help the SHG thrive and support community development.

Source- chatgpt

PRINCIPLES OF SELF HELP GROUP:-

Self-Help Groups (SHGs) operate on several key principles that promote financial and social
empowerment. These principles are essential for creating a sustainable and supportive
environment for members.

1. Voluntary Membership: Membership in an SHG is entirely voluntary, which ensures

that all members are committed to the group’s objectives.
 2. Equality and Mutual Respect: Every member’s voice is valued equally, fostering a
sense of belonging and cooperation. This mutual respect strengthens the group’s unity
and trust.
3. Regular Savings and Pooled Resources: Members contribute a fixed amount regularly
to build a common fund. This pooled resource is used to provide internal loans, helping
members meet their financial needs without relying on high-interest credit sources.
4. Democratic Decision-Making: SHGs are democratically run, with leaders elected by
members and decisions made collectively. This transparency ensures that all voices are
heard, and decisions reflect the group’s interests.
5. Transparency and Accountability: Clear records of savings, loans, and repayments are
maintained, accessible to all members. This builds trust and minimizes the risk of
mismanagement.
6. Self-Reliance and Independence: SHGs operate independently, encouraging members
to take charge of their finances and development without external control.
7. Mutual Support and Solidarity: Members support each other emotionally and
financially, building a strong community network that fosters resilience.
8. Inclusivity and Non-Discrimination: SHGs welcome members from diverse
backgrounds, promoting equal opportunities and diverse perspectives.
9. Capacity Building: SHGs often provide members with training in financial literacy and
entrepreneurship, enhancing their skills and confidence.

By adhering to these principles, SHGs empower members to achieve financial independence,

support each other, and foster positive community change. These values create a foundation for a
sustainable, impactful, and self-sustaining organization.

SOURCE – CHATGPT

Importance of self help group:-

Self-Help Groups (SHGs) are essential for fostering financial independence, social
empowerment, and community development, especially in rural and marginalized areas. Their
importance can be understood through various dimensions:
 1. Financial Inclusion: SHGs provide access to savings and credit for individuals who
often lack formal banking access. By pooling resources, members can secure loans at low
interest rates, reducing dependency on high-interest moneylenders.
2. Poverty Alleviation: SHGs enable members to invest in income-generating activities,
such as small businesses, agriculture, or livestock. These efforts improve household
income, contributing to poverty reduction and economic stability.
3. Women’s Empowerment: SHGs predominantly consist of women, offering them a
platform to save, borrow, and participate in decision-making. This fosters financial
independence, builds confidence, and enhances their status within families and
communities.
4. Skill Development: Through training programs in financial literacy, bookkeeping, and
entrepreneurship, SHGs equip members with essential skills to manage finances and
explore livelihood opportunities.
5. Social Empowerment: SHGs address social issues such as education, healthcare, and
gender inequality. Members work collectively to raise awareness and take initiatives for
community welfare.
6. Community Development: SHGs promote collective efforts for sanitation, health
awareness, education, and environmental conservation. They strengthen community ties
and encourage collaborative problem-solving.
7. Savings Habits: SHGs instill a culture of regular savings, encouraging financial
discipline and long-term planning among members.
8. Access to Government Schemes: SHGs act as intermediaries for members to avail of
government welfare programs, subsidies, and microfinance schemes.
9. Social Capital: SHGs build trust, cooperation, and solidarity among members, enhancing
their ability to tackle shared challenges.

In conclusion, SHGs play a transformative role in uplifting individuals and communities,

empowering them to achieve financial security, social equality, and sustainable development.

SOURCE - CHATGPT