SHG and Challenges

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Preview Self Help Group Strategies of SHG Components of Development in SHGs Women Development indices of SHGs Babu.MT 2


Introduction Poverty and unemployment are the major problems of any under developed countries, to which India is no exception In India along with this issue the women related problems like discrimination ,malnutrition, female infanticide are very high In India, at the end of ninth five year plan 26.1% of the population was living below poverty line.  Same period in the rural area 27.1% of the population was living in poverty The overall unemployment rate is estimated to 7.32%.  The female unemployment rate is 8.5%.  The rate of growth of women unemployment in the rural area is 9.8%. Babu.MT 3

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The more attractive scheme with less effort (finance) is “Self Help Group”.  It is a tool to remove poverty and improve the rural development (Sabyasachi Das. 2003). Babu.MT 4

Self Help Groups (SHGs):

Self Help Groups (SHGs) The origin of SHGs is from the brainchild of Grameen Bank of Bangladesh, which was founded by Mohammed Yunus.  SHGs were started and formed in 1975. In India NABARD is initiated in 1986-87. But the real effort was taken after 1991-92 from the linkage of SHGs with the banks. Babu.MT 5

Defining SHG:

Defining SHG A SHG is a small economically homogeneous affinity group of the rural poor voluntarily coming together to save small amount regularly, which are deposited in a common fund to meet members emergency needs and to provide collateral free loans decided by the group.  (Abhaskumar Jha 2000). Babu.MT 6

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SHGs have been recognized as useful tool to help the poor and as an alternative mechanism to meet the urgent credit needs of poor through thrift (V. M. Rao 2002) SHG is a media for the development of saving habit among the women (S. Rajamohan 2003). SHGs enhance the equality of status of women as participants, decision-makers and beneficiaries in the democratic, economic, social and cultural spheres of life.  (Ritu Jain 2003). Babu.MT 7

Principles of SHG:

Principles of SHG The basic principles of the SHGs are group approach, mutual trust, organization of small and manageable groups, group cohesiveness, sprit of thrift, demand based lending, collateral free, women friendly loan, peer group pressure in repayment, skill training, capacity building and empowerment (N.Lalitha ). Babu.MT 8

Working of SHGs:

Working of SHGs SHGs are working in democratic manner.  The upper limit of members in a group is restricted to 20. Among them a member is selected as an ‘animator’ and two members are selected as the representatives. The group members meet every week. They discuss about the group savings, rotation of sangha funds, bank loan, repayment of loan, social and community action programmes. Babu.MT 9

Functions of  SHGs :

Functions of  SHGs Create a common fund by the members through their regular savings. Flexible working system and pool the resources in a democratic way. Periodical meeting.  The decision making through group meeting Babu.MT 10

Impact of SHG on Women Life:

Impact of SHG on Women Life From the studies related to SHGs, it is clearly understood that the SHGs are tool to promote rural savings and gainful employment. Through this the rural poverty is reduced considerably.  Therefore women members are economically independent and their contribution to household income is also increased. Babu.MT 11

Benefits of SHG models :

Benefits of SHG models SHG movement created an institutional framework. Participation of women in SHGs improved their access to credit. Culture of thrift and disciplined loan repayment Winning confidence of mainstream financial sector as credit worthy institutions. Interest rates in the informal credit sector decreased. Consumption needs and certain production needs met. Babu.MT 12

Problems  :

Problems Low levels of credit absorption, low skill base and low asset base. Interior and tribal villages have not benefited. SCs and women headed households have not benefited. Pressures by Govt: to push sterilization and birth control methods. Babu.MT 13

Challenges Threatening the Sustainability:

Challenges Threatening the Sustainability Damage to ‘credit discipline’ because of high interest rates and political reactions to incidents of coercion High handed recovery of loans Lack of skills/experience for advisory/technical support services to promote livelihoods and build market intervention Internalised notions of vulnerability of women affecting their confidence and performance. Social norms inhibiting women from articulating personal needs. Women experience Invisible barriers to entry in economic & political spheres. Babu.MT 14


Conclusion SHGs are promoting a culture of democracy and providing women with opportunities. It engages women not only in productive economic activities but also in social empowerment and capacity building Many studies says that health education, alternative literacy, agriculture practices are imbibed Babu.MT 15

Thank You …:

Thank You … Babu.MT 16

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