Self Help Groups
A self-help group refers to a financial group usually made up of 10 to 25 local women, who are aged between 18 to 40. Most of the self-help groups are situated in India, however, can be found in other countries as well, but concentrated in South and South-East Asia.
What are Self Help Groups?
Self Help Groups refer to those types of informal groups of people who come together to find ways to improve their condition life. They are mostly self-governed.
Usually, groups of people with similar social and economic backgrounds come together with the help of NGOs or other government agencies and try to resolve their issues and also improve the conditions of their living conditions.
Emergence of Self Help Groups- Origin and Development
The development of SHGs in India started with the establishment of the Self-Employed Women’s Association in 1972. Even before the institutionalization of the concept of self-help groups, small steps and efforts were taken for self-organizing like that in 1954, the Textile Labour Association of Ahmedabad, formed a part of the women’s wing for women who belonged to families of mill workers.
NABARD, formed in 1992, formed the SHG Bank Linkage Project, which is one of the biggest microfinance projects of the times. From 1993 onwards, NABARD, with the Reserve Bank of India, allowed SHGs to open bank accounts in their banks. The introduction of the Swarn Jayanti Gram Swarozgar Yojana was for the promotion of self-employment by forming and spreading the skills of such groups.
Evolution of Self Help Groups in India
There are mostly three stages In the evolution of self-help groups:
- Formation of the groups
- Funding of the groups
- Required skills development for boosting income generation for the group
Self-Help group promoting agencies are mostly listed below:
- Non-government agencies
- Poverty management
- Commercial banks
- Microfinance institutions
Functions of the Self Help Groups
- One of the important functions is to build the capacity of the poor and also the marginalized groups of society, in the areas of employment and also income generation.
- Collateral-free loans are offered to people who find it difficult to take loans from banks.
- Conflicts are resolved with the help of mutual discussions and also leadership.
- Microfinance services to the poor are provided essentially by these groups.
- They are an intermediate group for formal banking services for the poor in rural areas.
- They encourage habits of saving among the poor.
Need for Self Help Groups
- Rural poverty is mostly due to a lack of access or limited access to credit and also financial services.
- They act as an important element of credit linkage in rural areas and act as a system of a community network.
- Rangarajan Committee Report has mostly highlighted reasons for the lack of financial inclusion in India:
- Weak credit absorption.
- Lack of collateral security
- The insufficient reach of institutions.
- They provide credit for the poor and are extremely vital for poverty alleviation.
- Empowering women and awakening the economically weaker sections to build social capital.
- Other developmental factors can also be improved with financial independence like that as healthcare, literacy, family planning, etc.
Significance of SHGs
SHGs help to empower women and also improve their leadership skills among them. They empowered the active participation of females in village panchayats and also gram sabha elections. Evidence also points out that the SHGs have helped to improve the status of women manyfold in society and family leading to improvement in the socio-economic conditions of women.
Help for Marginalised Groups
Most of the important beneficiary schemes by the government are for the weaker and also the marginalized communities and hence SHGs in many ways help in ensuring social justice.
Social evils like dowry, early marriages, etc. can be dealt with in a more holistic way because of the role and contribution of the SHGS.
SHGs linkage program which was headed by NABARD had made access to credit easier and also reduced the dependence on money lenders and other non-formal institutions.
Impact on Healthcare and Housing
Financial inclusion which occurred due to the SHGs has helped in better family planning, reduced child mortality, enhanced maternal health, and helped people to be provided with better healthcare facilities.
Issues with SHGs
Weak Financial Management
Certain businesses couldn’t properly invest in the units and the funds got diverted to more domestic purposes.
Lack of degradation of technology
Most SHGs were not making use of new technological skills and innovations. This is due to limited awareness and also a lack of necessary skills for using the same.
Lack of Stability and Unity Among the Women
SHGs are mostly dominated by women, but the stability of the units is seemed to be missing as many married women are not able to associate with the groups due to the shift of places of residence.
Lack of Financial Assistance
The assistance provided to them financially is not adequate to meet their actual requirements and adequate subsidies are not able to meet the labor cost requirements.
Self Help Groups in India
Mahila Arthik Vikas Mahamandal in Maharashtra (MAVIM)
The presence of SHGs in the case of Maharashtra were not able to cope with the volume and financial transactions and were in need of professional help. MAVIM was launched to provide financial and also livelihood services for SHGs. They provide for need-based requirements.
Kudumbashree of Kerala
Kudumbashree was launched in the state of Kerala in the year 1998 to help eradicate poverty through community action. It was one of the largest women-empowering group projects in the country; with three components of microcredit, entrepreneurship, and also empowerment.
It was a Non-profit and Non-Governmental organization for service to mankind, established in 2018, and currently works in Punjab, Haryana, Himachal Pradesh, Uttarakhand, and Uttar Pradesh. To date, they have done 20 events, which include health checkups, school uniforms, and books for students from economically weaker sections.
Way Forward for SHGs
- Government should act as both a facilitator and also promoter of SHGs and also create a supportive environment for the development of the SHG movement.
- More SHGs facilities should be provided in the states of Madhya Pradesh, Rajasthan, and North-East India.
- IT-enabled communication should be expanded and also capacity-building measures of the states, with the improvement of financial infrastructure.
- Efforts to increase income generation for the urban poor as there is the rapid rise of urbanization always result in financial exclusion.
- SHG monitoring cells should be incorporated in every state and both qualitative and quantitative information to be collected.
FAQs on Self Help Groups
Question 1: What are self-help groups?
Self-help groups refer to informal associations of people who gather together to find ways to improve living conditions.
Question 2: Are Self-Help groups free?
Mostly, the self-help groups are free and also informal, and very nominal donation is taken to cover the expenses.
Question 3: How many members are there in the Self-Help group?
Mostly about 20 members are present in the SHG group.
Question 4: Why Self-Help groups are growing in popularity?
There is no requirement for collateral to get loans. If regularisation of a person is present in the group, he becomes eligible for taking loans from banks.
Question 5: What are the benefits of self-help groups?
SHGs from the weaker sections of the economy are given the opportunity to build social capital. They also help in promoting inclusion and integrity among marginalized groups of people.
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