Self Help Group and Women Empowerment

Introduction:-
Women constitute around fifty percent of the total population in our country. In our economy
women are the more poor and under privileged section of the population as they are subject to
many socio-economic and cultural constraints. The situation is more severe in the rural and
backward region of the country. So to upgrade the economic condition and standard of living,
importance should be given on women empowerment. Women empowerment is a process in
which women challenge the existing norms and culture of the society to promote their well-being.
Self Help Group is very much important for promoting the economic condition of the poor. The
participation of women both in social and economic aspects. Self Help Group (SHGs) Bank Linkage
Programme is emerged as a cost effective mechanism for providing financial services to the
“unreached poor” which has been successful not only in meeting financial needs of the rural poor
women but also strengthen collective self help capacities of the poor leading to their
empowerment. Rapid progress in the formation of Self Help Group has now turned an
empowerment movement among women across the country.

Origin and Concept of Self Help Group:-

The origin of SHGs comes from the idea of Grameen Bank of Bangladesh, founded by Prof.
Muhammad Yunus in 1975, who tried out a new approach to rural credit in [Link]
Bank gave loans without asking borrowers either to provide collateral or engage in paper work. In
India NABARD initiated SHGs in the year 1986-87. But the real effort was taken after 1991-92. Self
Help Group is a small economically homogeneous affinity group of the rural poor people.
Voluntarily coming forward to save a small amount of money regularly, which is deposited in a
common fund meet the member’s emergency needs and to provide collateral tree loans decided by
the group. Self Help Group have been recognized as useful tool to help the poor and as an
alternative mechanism to meet the urgent credit needs of poor.

Self Help Group in India:-

Self Help Group (SHGs) is the group of rural poor who have volunteered to organize
themselves into a group for eradication of poverty of the members. SHG function on the basis of
co-operative principles a function for members to extent support to each other. It is considered as a
means of empowerment. SHG organize very poor people who do not have access to financial
system in the organized sectors. This scheme mobilizes the poor rural people especially women to
from groups for mutual benefits. SHGs play a crucial role in improving the saving and credit and also
in reducing poverty and social inequalities. Generally, a self help group may consist of 10 to 20
persons. The members should build a fund through their regular savings. The group should be able
to collect the minimum voluntary saving amount from their members to build a fund. This fund
should be used to advance loans to the members. The members agree to use this common fund
and such other funds (like grants and loans from banks), which they may receive as a group to give
small loans to needy members as per the decision of the group.

The Self Help Groups in India are small, informal and homogeneous groups of not more than
twenty members each. Among them a member is selected as an “animator” and two members are

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selected as representatives. The animator is selected for a period of two years. Members of the
group meet every week to discuss. They discuss about social and community programmes, group
savings, rotation of funds, bank loans and repayment of loans. The group members are encouraged
to make voluntary thrift on a regular basis. These pooled resources are used to make small interest
bearing loans to their members. This gradually builds financial discipline among the members of the
group. Once the groups show this mature financial behaviour, banks are encouraged to make loans
to the Self Help Group in certain multiples of the accumulated savings of the SHG. The bank loans
are given without any collateral and at market interest rates. In India, the emergence of rapid
expansion of Self Help Groups (SHGs) based on micro credit is a phenomenon and it is gaining
increasing importance in the development scenario. Till now there are more than seven million Self
Help Group in India.

YEAR NUMBER OF SHGs GROWTH RATE

2005-06 2238565 109.47

2006-07 2924973 30.66

2007-08 5009794 71.28

2008-09 6121147 22.2

2009-10 6959250 13.6

Importance of Self Help Groups in India:-

1) To mobilize the resources of the individual members for their collective economic
development.
2) To uplift the living conditions of the poor.
3) To create a habit of savings.
4) Utilization of local resources.
5) To mobilize individual skills for group’s interest.
6) To assist the members financially at the time of need.
7) To act as a media for socio-economic development of the village.
8) To gain mutual understanding, develop trust and self confidence.
9) To build up team work.
10) To develop leadership qualities.
11) To use as an effective delivery channel for rural credit.

Objective of Self Help Group and Women Empowerment:-

There are certain objectives of SHGs to ensure women empowerment which are as follows:-

1) To sensitize women of the targeted area for the need of SHG and its relevance in
empowerment process.
2) To create group feeling among women.
3) To enhance the confidence and capabilities of women.

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 4) To develop collective decision making among women.
5) To encourage the habit of saving among women.
6) To motivate the women for taking up social responsibilities, particularly related to women
development.

Women participation in SHGs have obviously created tremendous impact upon the life pattern and
style of poor women and have empowered them at various levels not only as individuals but also as
members of the family members of the community and the society as whole. They come together
for the purpose of saving their common problems through self help and mutual help. SHGs try to
generate a common fund out of a small savings, promoted on a regular basis among members by
reducing unproductive expenditures. The fund thus created are used for giving loans to its
members. The credit needs of members are usually assessed in group meetings.

Indication of Women Empowerment:-

1) Economic independence.
2) Standard of living has improved.
3) Understand the banking operation and knowledge on credit management.
4) Good public relation and social participation.
5) Self expression-decision making in community, village and households.
6) Breaking social, religious and cultural barriers.
7) Leadership qualities.
8) Skill up grading and better technology.

Function of SHG:-
1) All SHG members regularly save a small amount. The amount may be small, but savings
have to be regular and continuous habit with all the members.
2) “Savings first-credit later” should be the motto of every SHG member.
3) SHG members take a step towards self dependence when they start small savings. They
learn financial discipline through savings and internal lending.
4) The SHG should use the savings amount for giving loans to the members.
5) Proper accounts to be kept by the SHG. Simple and clear books for all transactions to be
maintained.
6) The group should meet regularly. The meetings should be weekly or at last monthly. This
helps them to understand each other’s difficulties better.
7) Savings should be deposited by all the members in the meeting itself.

Major Problems:-
There are certain problems in the successful working of the SHGs in some parts of the country.
These are as follows:-

1) Ignorance of the members of SHG:- Majority of the groups are unaware about the schemes
of assistance offered to them.
2) The training facilities given to the members of SHGs for increasing their productivity and
knowledge are not adequate to complete with that of strong units.
3) High costs of raw materials are also responsible for obstructing successful working of SHGs.

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4) SHGs face different problems in the marketing of products produced by them due to lack of
linkage with the marketing agencies, lack of permanent market for the products of SHGs,
poor quality of products, absence of proper brand name etc.
5) Sometimes the members of the SHGs use the fund for their personal and domestic
purpose--- not for business or productive purpose.
6) The return on investment is not attractive in certain groups due to inefficient management,
high cost of production, absence of quality consciousness etc.
7) It is also found in most of the SHGs that the financial assistance provide to them by the
agencies concerned is not adequate to meet their requirement.