Self Help Groups (SHGS)

1. Self-Help Group (SHG) – Definition
   SHG is a voluntary association of 10–20 rural poor individuals, primarily women, for mutual support and financial empowerment.
2. Objectives of SHGs
   SHGs aim to promote savings, credit access, entrepreneurship, and social development.
3. Composition of SHGs
   Typically formed by women from similar socio-economic backgrounds to ensure trust and cohesion.
4. Savings Mobilization
   Members contribute regularly to a common fund, which forms the basis for internal lending.
5. Credit Linkage
   SHGs are linked to banks for external credit to support income-generating activities.
6. Role in Financial Inclusion
   SHGs provide access to banking services for the rural poor, reducing reliance on informal moneylenders.
7. Internal Lending
   SHGs provide short-term loans from the group corpus at reasonable interest rates.
8. Group Meetings
   Regular meetings strengthen accountability, transparency, and decision-making.
9. Capacity Building
   Training and workshops improve financial literacy, entrepreneurship, and leadership skills.
10. Role of NGOs
    NGOs facilitate formation, capacity building, and bank linkage for SHGs.
11. Panchayats and SHGs
    PRIs support SHG activities and integrate them with development programmes.
12. Income-Generating Activities
    SHG members engage in small-scale enterprises, agriculture, dairy, and handicrafts.
13. Women Empowerment
    SHGs enhance women’s decision-making, confidence, and social status.
14. Social Development
    SHGs promote awareness on health, education, sanitation, and gender equality.
15. Role in Poverty Reduction
    SHGs enable sustainable livelihoods, reducing vulnerability and poverty.
16. Group Dynamics
    Mutual trust, cohesion, and transparency ensure the smooth functioning of SHGs.
17. Monitoring and Evaluation
    Regular assessment ensures SHG sustainability and financial discipline.
18. Bank Linkage Programmes
    NABARD promotes the SHG-Bank Linkage Programme to enhance credit access.
19. Repayment Discipline
    Internal monitoring ensures timely repayment of loans and financial sustainability.
20. Networking of SHGs
    SHGs form federations to increase bargaining power and access larger resources.
21. Government Support Schemes
    Schemes like DAY-NRLM provide training, credit, and infrastructure support.
22. Impact on Rural Economy
    SHGs contribute to employment generation, income enhancement, and community development.
23. Technology in SHGs
    Digital platforms improve savings, loan tracking, and capacity building.
24. Challenges in SHGs
    Lack of literacy, internal conflicts, and irregular meetings affect sustainability.
25. SHGs and NABARD
    NABARD provides financial, technical, and capacity-building support to promote SHGs nationwide.