Self-Help Group in India

Self-Help Groups in India are referred to self-governed, peer-controlled and informal groups of people with similar socio-economic backgrounds and having a desire for common good. In a self help group, people come voluntarily together to save whatever amount they can save in a convenient manner out of their earnings, to mutually agree for the contribution to a common fund and lend to the members for meeting their dynamic and emergent needs (Similar to Nidhi Company). There is an immense need for Self-Help Groups in India, everlasting role of government to reduce poverty. SHGs in India have comprehensive objectives and experience a definite evolutionary pattern.

Need of Self-Help Groups in India

The very existence of Self-Help Groups in India is extremely relevant to make the people of below poverty line capable and self-reliant. Self-Help Groups in India enable them to increase their income, improvise their standard of living and improve their status in society.

Functioning of Self-Help Groups

SHGs in India function on the foundations of co-operative principles and enable a forum for members to extent support all within the SHGs. It is considered as a method of empowerment. SHGs organise very poor people into groups who do not have access to financial system in the organised sector. In groups, normally the process of transparency and accountability are obviously lacking.

Nevertheless, in SHGs of India, they are assured empowerment by means of collective action. This scheme related to SHGs in India mobilises the poor rural people particularly women to form self-help groups for the mutual benefits. SHGs in India play a vital role in improvising the savings and credit and also in reduction of poverty and social inequalities.

Objectives of Self-Help Groups

• To inculcate the process of savings and banking habits among the members.
• To empower members financially, economically and socially.
• To enable obtaining of loan for productive purposes.
• To ensure economic prosperity through loan/credit disbursement.
• To gain from the collective wisdom involved in the organisation and management of own finances and distributing the various benefits among themselves.
• To enhance the confidence along with capabilities of women.
• To develop collective saving decisions among women.
• To encourage savings habit among women and make easy the accumulation of their own capital.
• To inspire women taking up various social responsibilities mainly related to women’s all round development.
• It also acts as the forum for members to render space and support to one another.

SHGs in India are considered as one of the most important tools to adopt a group approach for the process of economic empowerment related to women, SHGs in India are a group of people that meet on a regular basis to discuss various issues of interest to them and to look at solutions of commonly experienced problems. The self-help group in India may or may not be promoted by the government or the non-Government institutions. The group of people have volunteered to put in order action for eradication of poverty among them. There is an agreement among SHGs to save on a regular basis and convert their savings into a common fund known as Group Corpus. The members of Self-Help Groups in India use the common fund and other funds by way of common management.