Context

The Prime Minister hails work done by women SHGs, and says they can connect villages with prosperity.

Background

• Self-help groups are informal groups of people who come together to address their common problems.
• Villages are faced with problems related to poverty, illiteracy, lack of skills, health care etc.
• These are problems that cannot be tackled individually but can be better solved through group e orts.
• Today these groups known as Self-help groups have become the vehicle of change for the poor and marginalized.
• While self-help might imply a focus on the individual, one important characteristic of self-help groups is the idea of mutual support., people helping each other. Self-help groups can serve many different purposes depending on the situation and the need.
• For example, within the development sector, self-help groups have been used as an effective strategy for poverty alleviation,        human  development     and        social empowerment, and are therefore often focused on microcredit programmes and income-generating activities

Characteristics of Self-help group

• Voluntary nature – they are run by and for group members, have regular meetings, and are open to new members.
• Generally being formed in response to a particular issue, e.g. no access to education for children with disabilities, limited income-generating opportunities.
• clear goals, which originate from the needs of group members and are known and shared by all members.
• Informal structure and basic rules, regulations and guidelines to show members how to work e ectively together.
• Participatory nature – involving getting help, sharing knowledge and experience, giving help, and learning to help oneself.
• Shared responsibility among group members – each member has a clear role and contributes his/her share of resources to the group.
• Democratic decision-making.
• Governance by members, using an external facilitator only if necessary in the formation of the group.
• Evolution over time to address a broader range of issues.
• Possibility of joining together to form a federation of groups across a wider area.

Guiding principles in formation of SHGs

• Effort is built on mutual trust and mutual support.
• Every individual is equal and responsible.
• Every individual is committed to the cause of the group
• Decision is based on the principles of consensus.
• Savings is the foundation on which to build the group for collective action.

 

Challenges with SHG:

Ignorance of Members/Participants:

• Even though the authorities take measures for creating awareness among the group members about the schemes beneficial to them, still majority of the group are unaware of the schemes of assistance offered to them.

Inadequate Training Facilities:

• The training facilities given to the members of SHGs in the specific areas of product selection, quality of products, production techniques, managerial ability, packing, other technical knowledge ate are not adequate to compete with that of strong units.

Problems of Marketing:

• Marketing is an important area of functioning of the SHGs. However they face different problems in the marketing of products produced by them.

Exploitation by Strong Members:

• It is also observed that in the case of many SHGs, strong members try to earn a lion’s share of the profit of the group, by exploiting the ignorance and illiterate members.

Weak Financial Management:

• It is also found that in certain units the return from the business is not properly invested further in the units, and the funds diverted for other personal and domestic purposes like marriage, construction of house etc.

Low Return:

• The return on investment is not attractive in certain groups due to inefficient management, high cost of production, absence of quality consciousness etc.

 

Way Forward:

• The Government should play the role of a facilitator and promoter, create a supportive environment for the growth and development of the SHG movement.
• Expanding SHG Movement to Credit Deficient Areas of the Country - such as Madhya Pradesh, Rajasthan, States of the North-East.
• Rapid expansion of financial infrastructure (including that of NABARD) and by adopting extensive IT enabled communication and capacity building measures in these States.
• Extension of Self-Help Groups to Urban/Peri-Urban Areas – efforts should be made to increase income generation abilities of the urban poor as there has been a rapid rise in urbanisation and many people remain financially excluded.
• Positive Attitude – Government functionaries should treat the poor and marginalized as viable and responsible customers and as possible entrepreneurs.
• Monitoring – Need to establish a separate SHG monitoring cell in every state. The cell should have direct links with district and block level monitoring system. The cell should collect both quantitative and qualitative information.
• Need Based Approach – Commercial Banks and NABARD in collaboration with the State Government need to continuously innovate and design new financial products for these groups.