Self-Help Groups

Self-Help Groups

News: Government is aiming at raising the annual income of each woman in Self-Help Groups (SHGs) to Rs 1 lakh by 2024.

About:
• Self-Help Groups (SHGs) are informal associations of people (primarily women) who voluntarily come together to find ways to improve their living conditions. They are driven by a desire to collectively perform for a common goal.
• SHG rely on the notion of “Self Help” to encourage self-employment and poverty alleviation.

Objectives:
• Encourage to start Micro-enterprises
• Resolve conflicts through collective Leadership
• Provide Collateral Free Loans
• Capacity Building of poor and marginalized
• Work as collective guarantee system for members

Significance of SHG’s:
• Financial Inclusion - Priority Sector Lending norms and assurance of returns incentivize banks to lend to SHGs. The SHG-Bank linkage programme pioneered by NABARD has made access to credit easier and reduced the dependence on traditional money lenders and other non-institutional sources.
• Voice for Weaker sections - Most of the beneficiaries of government schemes have been from weaker and marginalized communities and hence their participation through SHGs ensures social justice.
• Bridges Gender Equity Gap - SHGs empowers women and inculcates leadership skill among them. Empowered women participate more actively in gram sabha and elections. This not only improves their confidence but also has impact on improving their status in society and builds their self-esteem.
• Additional source of Employment – It gives options to village dwellers as it helps reduce dependence on agriculture. Loans can be availed at no cost to set-up their own micro-enterprises. For example, tailor shops, grocery stores, ancillary shops for local industries.
• Women are now working in diverse sectors with roles of Business correspondent, Bank Sakhis, Kisan Sakhis and Pashu Sakhis.

Challenges faced by SHG’s:
• Averse to Technological upgradation - Most SHGs are not making use of new technological innovations and skills. This is because there is limited awareness with regards to new technologies and they do not have the necessary skills to make use of the same.
• Improper Training - 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 are not adequate to compete with that of strong units.
• Poor Financial Management – Returns from business in certain SHG’s are not further invested in business units. Funds are transferred for personal usage such as marriage, construction of homes.
• Financial Assistance – The financial assistance provided by agencies to SHG’s is inadequate and does not meet their actual requirements.