Self Help Groups
Rural development is one of the main pillars of progress of India. It has lagged behind in many aspects of development even after six decades of the independence of India. According to 2011 population census, rural and urban India accounts for 33.8 per cent and 20.09 per cent of people below the poverty line respectively. Self Help Group has emerged as a new model for combating poverty.
This concept mainly demonstrates the significance of togetherness. The Self Help Group represents an association of people formed to attain certain common goals.
Self Help Groupis a small informal voluntary association created for the purpose of enabling members to reap economic benefit out of mutual help, solidarity, and joint responsibility. The benefits include mobilization of savings and credit facilities for the pursuit of group enterprise activity.
National Bank for Agricultural & Rural Development (NABARD) has defined Self Help Group as “a homogenous group of rural poor voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group to be lent to the members for meeting their productive and emergent credit needs”
Following are the objectives of Self Help Groups
1. Focusing on empowerment of women.
2. Saving people from the clutches of money lenders
3. Building capacity of women and to enable them to participate in generating activities.
4. Creating the habit of saving in the minds of the people who are economically backward.
5. Promoting entrepreneurship skills among women.
6. Creating awareness aboutthe importance of credit circle or revolving credit and the payment of the circle.
7. Elevating the economic standard of the member’s families.
8. Developing skills and facilitating credit linkages for eventual economic empowerment.
9. Promoting awareness among the members about finding solutions for their economic problems.
10. Identifying the common interest of the group members and carrying out their operations in the most efficient and economic way.
11. Enabling the members to overcome all social and economic barriers.
12. Promising and ensuring human rights to women at all stages of their life cycle.
1. The motto of every group members should be “saving first – credit latter”
2. Self Help Group is homogeneous in terms of economic status.
3. The ideal size of a Self Help Group ranges between 10 and 20 members.
4. The groups need not be registered.
5. Groups are non-political, voluntary associations and follow a democratic culture.
6. Each group should have only one member from one single family.
7. A group is to be formed with only men or only with women.
8. Self Help Group holds weekly meetings mostly during non-working hours, and full attendance is made mandatory for better participation.
9. The groups have transparency among themselves and they have collective accountability in respect of financial transactions.
10. Every group provides a platform to its members for exchange of their views and ideas freely.
The Functions of Self Help Groups are listed below.
1. Developing and enhancing the decision making capacity of members.
2. Increasing general awareness on literacy among members.
3. Equipping the poor with basic skills for understanding monetary transactions.
4. Maintaining books and registers to ensure proper accounts.
5. Providing necessary training in the chosen field.
6. Submitting the accounts for annual audit by a qualified auditor.
7. Deciding the loan amount to be sanctioned to the group members.
There are three distinct modes of credit to SHGs. Under the first mode, banks lend directly to the SHGs. In the second mode, banks provide loans to the NGOs for onward lending to the SHGs and ultimately to micro entrepreneurs. Under the third mode, banks extend credit to the SHGs with the NGOs serving as facilitators. Out of these three methods, the last method of direct lending by bank with NGOs facilitation is widely practised.
In December 2017 there were 45,67,090 SHGs in India. The total number of members in SHGs during the same period stood at 5,02,65,933 at all India level.
The five year plans of the government of India has given due recognition to the relevance of the Self-help group concept to implement developmental schemes at the grassroots level.
In Tamil Nadu, Tamil Nadu Corporation for Development of Women Limited (TNCDW) was established in the year 1983 with the prime objective of socio economic development and empowerment of rural women. The Government of Tamil Nadu spearheaded the Self Help Group concept in the country by forming SHGs in Dharmapuri district with the assistance of International Fund for Agricultural Development (IFAD) in September 1989. The success of the IFAD project paved way for the now popularly called “Mahalir Thittam” project, which was launched during 1997-98 with the State Government funding and was progressively extended to all the 30 districts. The SHG movement has now emerged as a powerful and vibrant movement illuminating the lives of many poor women in the state.