Self Help Groups (SHGs) are community-based organizations that consist of small groups of people, primarily women, who come together to address common social and economic needs. SHGs play a significant role in empowering individuals, particularly women, and promoting financial inclusion and community development. Here are the key details and features of Self Help Groups:
- Formation and Composition: SHGs are formed at the grassroots level with the support of non-governmental organizations (NGOs), banks, or government agencies. Typically, 10 to 20 individuals from the same village or locality voluntarily join an SHG. Most SHGs comprise exclusively of women, though some may include men as well. The group members share a common bond, such as belonging to a similar socio-economic background or having similar livelihood interests.
- Objective: The primary objective of SHGs is to create a platform for its members to pool their resources, access financial services, and undertake income-generating activities collectively. SHGs encourage a culture of savings, self-reliance, and mutual support among members.
- Savings and Microcredit: One of the fundamental activities of SHGs is collective savings. Members contribute a fixed amount regularly into a common pool, and these savings are then used to provide microcredit to group members in times of need. The availability of microcredit within the group eliminates the need to approach moneylenders who often charge exorbitant interest rates.
- Social and Economic Empowerment: SHGs serve as a forum for discussing and resolving various social and economic issues affecting the community. They create a platform for women to voice their opinions, build confidence, and participate actively in decision-making processes. Through capacity-building programs, SHGs empower members with knowledge and skills to improve their livelihoods and enhance their socio-economic status.
- Access to Formal Financial Services: SHGs act as intermediaries between their members and formal financial institutions like banks. These groups help their members open bank accounts and facilitate access to credit from banks. SHGs have proven to be effective in increasing financial inclusion, especially among marginalized sections of society.
- Livelihood Promotion: SHGs engage in various income-generating activities, such as livestock rearing, small-scale enterprises, handicrafts, agriculture, and more. Group members collectively invest the savings and microcredit received to initiate and expand these livelihood activities, leading to improved household incomes.
- Government Support and Linkages: The Indian government, along with various state governments, has been actively supporting the SHG movement through various programs and schemes. SHGs are often linked to government-sponsored livelihood programs and social welfare schemes to enhance their reach and impact.
- Impact on Poverty Alleviation: The SHG movement has shown significant potential in poverty alleviation and reducing income inequality. By providing financial access, promoting entrepreneurship, and encouraging social inclusion, SHGs contribute to the economic upliftment of their members and the overall community.
- Replication and Scaling Up: Successful SHGs often form federations or higher-level organizations to strengthen their collective voice and increase bargaining power. These federations enable resource-sharing, capacity-building, and replication of best practices across a wider geographical area.
In conclusion, Self Help Groups have emerged as powerful tools for community empowerment, financial inclusion, and poverty alleviation. By promoting collective action, encouraging savings, and facilitating access to credit and resources, SHGs have proven to be effective instruments in empowering women and marginalized communities, fostering economic growth, and driving sustainable development.