SHG

SHG is a development group for the poor and marginalized.

It is self-governed, peer controlled information group of people with similar socio-economic background and having a desire to collectively perform common purpose.
It is recognized by the government and does not require any formal registration
The purpose of the SHG is to build the functional capacity of the poor and the marginalized in the field of employment and income generating activities
The 9th five year plan of the government of India had given due recognition to the importance and the relevance of the Self-help groups in implementing developmental schemes at the grassroots level.

Features of SHGs

Some of the characteristic features of SHGs are given below:

An SHG is generally an economically homogeneous group formed through a process of self-selection based upon the affinity of its members.
Most SHGs are women’s groups with membership ranging between 10 and 20.
SHGs have well-defined rules and by-laws, hold regular meetings and maintain records and savings and credit discipline.
SHGs are self-managed institutions characterized by participatory and collective decision making.

Benefits of SHG

Credit Accessibility: Self-Help Groups have emerged to fill the gap in the formal credit system which is characterized by requirement of collateral; inadequacy and incomplete integration into the overall rural social and community development.
Promote Saving Culture: The SHGs promote thrift in small proportions by a minimum contribution from each member. From the pooled money, credit is given to the needy members to be repayable in small installments at reasonable interest rates.
Women Empowerment: SHGs have helped in the empowerment of women. According to the World Bank report as many as 67 million Indian women are members in six million SHGs. Membership of SHGs has enabled economic empowerment of women through control of resources, political empowerment through participation in decision-making, social empowerment through better social standing obtained by better economic status
Capacity Building: It has also helped in social mobilization, institution building, communization and creation of human resource.
Social Benefits: It helps in poverty alleviation and creates awareness about benefits of education, skills and improved health.
Banking Literacy – It encourages and motivates its members to save and act as a conduit for formal banking services to reach them.

Issues related to SHGs

Inadequate Access to Market: SHGs lack sufficient orders, a proper brand name, attractive packaging, sales promotion measures and a permanent market.
Financial Bottlenecks: Financial institutions do not provide sufficient and timely credit to SHGs due to profit motive and fear of low return and lack of proper documentation by SHGs.
Lack of Technology: SHGs still use traditional and obsolete technology and lack access to modern technology, thus SHG beneficiaries are unable to produce quality products.
Infrastructure Issues:SHGs lack infrastructure like road and rail connectivity, cold storage facilities, electricity and digital connectivity which hamper their growth.
Capacity Building Impediments: The members are not well trained and do not have sufficient skills to make SHGs self-reliant. They lack understanding about core values of business.
Illiteracy: The members are illiterate and lack scientific temper, thus are unaware about functioning of SHGs.
Politicization: Political affiliation and interference hinder the functioning of SHGs.
Concentration on Agricultural Activities: Most of the SHGs working in rural areas are engaged in agricultural activities and those related to non-agricultural activities are minimal.
Socio-cultural Hurdles: Patriarchy, feudalism, poverty and gender stereotyping act as a hurdle to reap the benefits of SHGs.

Possibilities and Prospects

The following efforts can help in successful working of the SHGs: