Introduction
Self-help Groups (SHGs) are small, voluntary groups of people, usually from similar socio-economic backgrounds, who come together to solve common problems, especially related to finance, empowerment, and development. These groups, mostly formed by women in rural areas, play a vital role in promoting financial independence and social change.
Definition of Self-help Groups
A Self-help Group is a group of 10 to 20 individuals who save regularly and use pooled funds to give small loans to members for income-generating activities or emergency needs. Over time, they become eligible for bank loans, helping members become financially self-reliant.
Objectives of SHGs
- Promote financial inclusion among marginalized sections, especially women.
- Encourage saving habits and credit discipline.
- Improve access to credit for small businesses or personal needs.
- Empower women socially, economically, and politically.
How SHGs Function
- Each member contributes a fixed amount every month.
- The money is saved in a bank account under the group’s name.
- Members can borrow from the fund at low interest.
- Regular meetings are held to discuss issues, maintain records, and ensure transparency.
Importance of SHGs
- They improve women’s confidence and leadership skills.
- Help women start small businesses like tailoring, farming, or food processing.
- Increase awareness about rights, health, education, and legal support.
- Support community development and local decision-making.
Government Support
- The Indian government supports SHGs through schemes like National Rural Livelihood Mission (NRLM).
- Banks offer loans to SHGs without collateral.
Conclusion
Self-help Groups are powerful tools for grassroots development and women’s empowerment. They enable members to support each other financially and socially, leading to better livelihoods and stronger communities. SHGs are a key part of India’s development strategy for inclusive growth.