~ Aditi Bhardwaj
Majority of Indians are unaware of India’s holistic program of the 1980s, the Self-Help Group (SHG) system. The self-help group is an integrated program of micro-enterprise covering particular aspects of self employment. They are small voluntary associations formed by unprivileged sections, who come together to solve their common problem by creating such groups. It is a group that usually includes people who are below the poverty line, in lay man’s language.
The term self-help group refers to a self-governed, peer-oriented, informal group of people with the same economic background who desire to accomplish a common purpose collectively. People here come together and collect money voluntarily. The amount they are able to save conveniently out of their earnings, they agree to contribute it for the common fund and lend it to the members to meet their issues and emergency needs. SHGs have successfully mobilised small savings on a weekly or monthly basis from the persons who were not able to save any amount of money, small or big.
A SHG is an informal association to enhance the member’s financial security as the 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.
Non-Governmental Organisations traditionally had a history of promoting SHGs. However, over time, SHGs have come to be linked by Government agencies, banks and also by federations of SHGs themselves. This process helps group members imbibe the essentials of financial intermediation such as prioritising the needs, fixing terms and conditions, and maintaining accounts. They also learn to appreciate that resources are limited and have a cost.
Now that we know the basic concept of what a self-group is, let’s get to the part how it came into existence, why there was a need to have self-help groups in every society in the first place?
History of self-help groups
It dates back to 1985, an organisation called Mysore resettlement, and area development agency (MYRADA) undertook such initiative. The SHGs movement started in the southern States under the leadership of MYRADA. Awareness was raised amongst people, especially women regarding prudence and understanding the importance of low-cost credit. In about two years there were approximately 300 SHGs under MYRADA’s project. MYRADA also trained SHGs in organising meetings, setting agendas, keeping minutes and accounts.Over time several other agencies like the National Bank for Agricultural and Rural Development (NABARD), the Reserve Bank Of India (RBI), leading NGOs, as well as multilateral agencies like International Fund For Agricultural Development (IFAD) helped in the growth of the SHGs. Some other factors also helped in the growth of SHGs such as:
- The Genesis of SHG in India can be traced to the formation of the Self-Employed Women’s Association (SEWA) in 1970.
- The SHG Bank Linkage Project launched by NABARD in 1992 has blossomed into the world’s largest microfinance project.
- NABARD along with RBI permitted SHGs to have a savings account in banks from the year of 1993. This action gave a considerable boost to the SHG movement and paved the way for the SHG-Bank linkage program.
- In 1999, Government of India, introduced Swarn Jayanti Gram Swarozgar Yojana (SGSY) to promote self-employment in rural areas through formation and skilling of SHGs.
- The programme evolved as a national movement in 2011 and became National Rural Livelihoods Mission (NRLM) – world’s largest poverty alleviation programme.
- Today, State Rural Livelihood Missions (SRLMs) are operational in 29 states and 5 UTs (except Delhi and Chandigarh).
Stages of Formation
The SHGs go through 3 stages of evolution such as
- Group formation
- Capital formation
- Lastly , skill development
As SHGs are formed under the swarn Jayanti Gram Swarozgar Yojana, for subsidy would be 50 percent , there is no monetary ceiling on subsidies on minor irrigation projects as well as for self employed people.
The SHGs concept when it first started was very much an innovative step, but over the years passed numerous problems came to be noticed such as lack of continued official support, the education status was below par, regarding actual governance of SHGs , discontinuation and increased work burden. Whereas there have been possible solutions for certain issues:
- The general education is a must especially female education
- Special care and starting of vocational small scale manufacturing units
- General awareness
- Incentive to be provided to the banks so that they could launch branches in rural area
Bank Linkage Programs
The program further gained strength from the National Bank For Agriculture And Rural Development (NABARD), linking the small number of groups with a bank. It was called the Self-help Group Bank Linkage Program (SBLP). This initiative linked group members, many of whom did not have a bank account before to banks. The SBLP has proven to be an excellent medium for social and economic empowerment for rural women. NABARD undertook measures to assist MYRADA through a grant of INR 1 million in 1987. By the year 1994 about 620 SHGs were linked with banks. The success led to the transformation with the ever-increasing number of banks and NGOs participating therein. Such linkage of SHGs spread rapidly and fast that in over a decade they emerged as the single most extensive microfinance programme in the world.
Empowering Women Through Self Help Groups
The question that arises is that , if participating in SHGs, empowers women?
Well to answer that question, a survey was held in 3ie report, providing a periodic commentary on the effect of the economic SHGs program on women empowerment. It stated that SHGs are a promising approach to achieve a positive impact on women’s empowerment. Participating in SHGs led to :
- Women’s higher ability to exert control over resources
- Making decisions about the reproductive health in the household
- Increase mobility
Training held in these SHGs programs showed a massive effect on women’s economic and reproductive empowerment. The Government and NGOs still work towards uplifting women in SHGs in India as well as in other countries.
Role in COVID-19 Response
Women self-help groups have increased to the extraordinary challenge of COVID -19. With 1.3 billion people stuck inside their homes for two months to defeat the virus, women’s self-help groups came forward in over 90 percent of India’s Districts. Away from the limelight the SHGs were and are producing facemasks, running community kitchens, delivering essential supplies, spreading awareness about the issue and how to fight it , sensitizing people about health and hygiene as well as combating misinformation.
Over 19 Million masks have been produced by 20,000 SHGs across india. They have fed the poor and the vulnerable by running community kitchens. They are using social media as a source to raise awareness among people about the situation as well as telling people not to be misdirected by reading false articles on such a vast issue. Women are working as delivery personnel and are running help desks for providing food or essential supplies to the elderly.
Government’s Role
Self Help Groups are usually formed , trained and groomed by an NGO, Bank Branch or a Government agency called as Self-Help Promoting Institution. The SHPI trains the members to maintain simple accounts of the collected thrift and loans given to members.
The regular meetings also provide them a platform to discuss and resolve many social and common issues, thus fortifying their togetherness.
A savings bank account is opened with a bank branch and regular thrift collection and loaning to members build-up the financial discipline among the members to encourage the bank to provide larger loans to the group.
Self-help groups are all about creating healthy habits rather than creating restrictions. It is an innovative step to add the good and subtract the bad.
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