Economics Class 12 Project on Self Help Group

Acknowledgement
I would like to convey my sincere thanks to ……… (Teachers name), my
Economics teacher who always gave me valuable suggestions and
guidance during the project. She/he has a source of inspiration and helped
me understand and remember important details of the project. She/he gave
me an amazing opportunity to do this wonderful project ‘(name of the
project)’.
I also thank my parents and friends for their help and support in finalizing
this project within the limited time frame.

…………………. (Name of the student)

 Economics Class 12 Project on Self Help Group

Certificate
This is to certify that..................................(Name of the student) of class 12
has successfully completed the Economics Project on
…………………………………………….. (Name of the project) as per the
guidelines of class 12 Board examination conducted by CBSE.

Teacher’s Signature:
Teacher’s Name:

An Example is given below the topic being discussed here is

“Self Help Group”

List of Content

S. No. Topic Page

No.
1 Meaning of Self Help Groups X
2 Explanation of Self Help Groups X
3 Evolution of Self Help Groups In India X
4 The emergence of Self Help Groups – Origin and Development in X
India
5 Functions of Self Help Group X
6 Need for Self Help Group X
7 Advantages of Self Help Groups X
8 Problems faced by Self Help Groups X
9 Self Help Groups in India X
10 Bibliography X
 Economics Class 12 Project on Self Help Group

Meaning of Self Help Groups

SHG is a holistic programme of micro-enterprises covering all aspects of self-employment,
organization of the rural poor into self help groups and their capacity building, planning of
activity clusters, infrastructure build up, technology, credit and marketing.

It lays emphasis on activity clusters based on the resources and the occupational skills of the
people and availability of markets.
 Economics Class 12 Project on Self Help Group

Explanation of Self Help Groups

Self-Help Group refers to a self-governed, peer controlled, informal group of people with the
same socio-economic background and having a desire to collectively perform common
purposes. Here poor people voluntarily come together to save whatever amount they can save
conveniently out of their earnings, to mutually agree to contribute to a common fund and to
lend to the members for meeting their productive and emergent needs.

SHGs have been able to mobilize small savings either on a weekly or monthly basis from
persons who were not expected to have any savings. They have been able to effectively
recycle the resources generated among the members for meeting the emergent credit needs
of members of the group.

SHG is a group formed by the community of women, which has a specific number of members
like 15 or 20. In such a group the poorest women would come together for emergency,
disaster, social reasons, economic support to each other, have ease of conversation, social
interaction and economic interaction.

A SHG is an informal association to enhance the member’s financial security as primary focus
and other common interest of members such as area development, awareness, motivation,
leadership, training and associating in other social inter-mediation programmes for the benefit
of the entire community.

Evolution of Self Help Groups In India

Every Self-help group usually goes through 3 stages of evolution stated below:

1. Formation of group
2. Funding or Formation of Capital
3. Development of required skills to boost income generation for the group

Many self-help groups are formed with the assistance of Self- help to promote agencies.

The various types of Self-help promoting agencies are stated below:

1. Non-governmental agencies
2. Government
3. Poverty management programmes
4. State & commercial banks
5. Microfinance institutions
6. SHG Federations
7. SHG leaders/Entrepreneurs
 Economics Class 12 Project on Self Help Group

The emergence of Self Help Groups – Origin and Development in

India

1. The origin of SHGs in India can be traced back to the establishment of the Self-
Employed Women’s Association (SEWA) in 1972.
2. Even before, there were small efforts at self-organising. For example, in 1954, the
Textile Labour Association (TLA) of Ahmedabad formed its women’s wing in order to
train the women belonging to families of mill workers in skills such as sewing, knitting,
etc.
3. Ela Bhatt, who formed SEWA, organised poor and self-employed women workers such
as weavers, potters, hawkers, and others in the unorganised sector, with the objective
of enhancing their incomes.
4. NABARD, in 1992, formed the SHG Bank Linkage Project, which is today the
world’s largest microfinance project.
5. From 1993 onwards, NABARD, along with the Reserve Bank of India, allowed SHGs
to open savings bank accounts in banks.
6. The Swarn Jayanti Gram Swarozgar Yojana was introduced in 1999 by GOI with the
intention of promoting self-employment in rural areas through formation and skilling of
such groups. This evolved into the National Rural Livelihoods Mission (NRLM) in
2011.

Functions of Self Help Groups

1. They try to build the functional capacity of poor and marginalised sections of society in
the domain of employment and income-generating activities.
2. They offer collateral-free loans to sections of people that generally find it hard to
get loans from banks.
3. They also resolve conflicts via mutual discussions and collective leadership.
4. They are an important source of microfinance services to the poor.
5. They act as a go-through for formal banking services to reach the poor, especially
in rural areas.
6. They also encourage the habit of saving among the poor.
 Economics Class 12 Project on Self Help Group

Need for Self Help Groups

1. One of the chief reasons for rural poverty is the lack of access or limited access
to credit and financial services.
2. The Rangarajan Committee Report highlighted four major reasons for lack
of financial inclusion in India. They are:
a. Inability to give collateral security
b. Weak credit absorption capacity
c. The insufficient reach of institutions
d. Weak community network
3. It is being recognised that one of the most important elements of credit linkage
in rural areas is the prevalence of sound community networks in Indian villages.
4. SHGs play a vital role in giving credit access to the poor and this is extremely
crucial in poverty alleviation.
5. They also play a great role in empowering women because SHGs help women
from economically weaker sections build social capital.
6. Financial independence through self-employment opportunities also helps improve
other development factors such as literacy levels, improved healthcare and better
family planning.

Advantages of Self Help Groups

1. Financial Inclusion – SHGs incentivise banks to lend to poor and marginalised sections
of society because of the assurance of returns.
2. Voice to marginalised – SHGs have given a voice to the otherwise underrepresented
and voiceless sections of society.
 Economics Class 12 Project on Self Help Group

3. Social Integrity – SHGs help eradicate many social ills such as dowry, alcoholism,
early marriage, etc.
4. Gender Equality – By empowering women SHGs help steer the nation towards
true gender equality.
5. Pressure Groups – SHGs act as pressure groups through which pressure can be
mounted on the government to act on important issues.
6. Enhancing the efficiency of government schemes – SHGs help implement and improve
the efficiency of government schemes. They also help reduce corruption through social
audits.
7. Alternate source of livelihood/employment – SHGa help people earn their livelihood by
providing vocational training, and also help improve their existing source of livelihood
by offering tools, etc. They also help ease the dependency on agriculture.
8. Impact on healthcare and housing – Financial inclusion due to SHGs has led to
better family planning, reduced rates of child mortality, enhanced maternal health and
also helped people fight diseases better by way of better nutrition, healthcare
facilities and housing.
9. Banking literacy – SHGs encourage people to save and promote banking
literacy among the rural segment.

Problems of Self Help Groups (SHGs)

1. Need for extending this idea into the poorest families, which is not necessarily the
case at present.
2. Patriarchal mindset prevailing which prevents many women from coming forward.
3. There are about 1.2 lakh branches of banks in rural areas as opposed to 6 lakh
villages in the country. There is a need to expand banking amenities further.
4. Sustainability and the quality of operations of such groups have been questionable.
5. There is a need for monitoring cells to be established for SHGs across the country.
6. The SHGs work on mutual trust. The deposits are not safe or secure.
 Economics Class 12 Project on Self Help Group

Self Help Groups in India

1. Kudumbashree in Kerala

The Kudumbashree project was started in Kerala in 1999, as a community action to eradicate
poverty. It has become the largest women-empowering project in India. There are 3
components namely, microcredit, entrepreneurship and empowerment. Kudumbashree is a
government agency.
 Economics Class 12 Project on Self Help Group

2. Mahila Aarthik Vikas Mahamandal (MAVIM) in Maharashtra

SHGs in Maharashtra were unable to cope with the growing volume and financial transactions
and needed professional help. Community managed resource centre (CMRC) under MAVIM
was launched to provide financial and livelihood services to SHGs. CMRC is self-sustaining
and provides need-based services.

Bibliography
Government and other websites
Online links
News paper, magazines.