In the heart of Rural India, a silent and powerful transformation is taking root beyond the glare of urban development and towering skylines. Since ages, women being regarded as passive participants in the household economy are now stepping forward as Decision Makers and Entrepreneurs. Self-Help Group (SHG) movement is one of the instrument that played the key role in this transformation. In layman context, we think Self-Help Groups are just about pooling savings and accessing small loans, but in the broader view they are about building Confidence, Collective Strength and Changing the Narrative around rural women's economic capabilities. SHGs have revolutionized in the past 2 decades on how women participate in their local economies, impacting livelihoods and their communities.
What Are SHGs
Wondering what are SHGs and never heard about it? Let me explain, A Self-Help Group (SHG) is a small, voluntary association of women, who come together and address common problems through mutual support. These groups made up of 10 members, in some places 20, from similar socio-economic backgrounds. They start by contributing small savings regularly, over a period of time, the pooled funds are utilized to provide loans to members which helps them to meet urgent needs, invest in business and support their children's education. Here, the concept may sound simple but it leads to Ripple Effect which empowers women Socially and Financially. It creates a sense of community, encouragement, decision making and building leadership skills. Women those who hesitated once to speak up in public are now managing accounts, negotiating with banks and leading village level federations.
A Government-Backed Movement With Local Impact
Institutional support is one of the main reason for the success of SHGs in India. There are programs like National Rural Livelihood Mission (NRLM) launched by the Ministry of Rural Development has taken SHGs to scale. Now NRLM is Deendayal Antyodaya Yojana, aims at building strong grassroot institution of power to reduce the rural poverty. As per government data, there are more than 90 lakh SHGs are formed across India. Now, the government is under mission to bring 10 crore women together. These groups are now in the process of linking with the formal financial Institutions which allows the members to access larger loans at subsidized interest rates and gaining financial literacy.
The states like Odisha, Andhra Pradesh, Uttar Pradesh and Tamil Nadu are emerged as frontliners in SHGs implementation. "Mission Shakti" model in Odisha and SERP (Society for Elimination of Rural Poverty) in Andhra Pradesh have demonstrated the potential of SHGs in inclusive development.
SHGs and Financial Independence
How exactly the Rural Women's Finances are transformed by SHGs?
1. Easy Access to Credit
Basically, the rural women are considered too risky by banks to grant the loans due to lack of collateral or formal income. SHGs bypassed this problem by offering peer-backed lending. A woman, from setting up a tailoring unit to buying goats or investing in seed for farming, can borrow from her group's savings. Many SHGs developed good credit discipline over period of time and now become eligible for bank linkage programs where they receive loans of ₹5 to ₹10 lakh at subsidized rate of interest.
2. Entrepreneurship and Small Businesses
From SHG network there are thousands of women-led ventures have emerged. Over 2.85 lakh women from Prayagraj district, Uttar Pradesh have taken up entrepreneurship engaging activities such as Banana Farming, Running Canteens and Selling Eco-Friendly Sanitary pads. SHG women are operating The Prerna Canteens in UP, generating a steady income and recognition by serving nutritious meals to government employees.
3. Financial Literacy and Management
Women are learning basic financial skills like how to budget, save, maintain accounts and planning for the future as a part of SHG activities. This often leads to better household management, reduced reliance on moneylender and also increased their ability to invest in the children's education and health.
Case Study: The Lakhpati Didi Initiative
Lakhpati Didi is a scheme introduced by the Indian Government aiming to create at least 2crore "Lakhpati Didis", in simple terms it is about women who earn more than ₹1 lakh per year through SHG livelihood activities. This program encouraged women to diversify into higher income sectors like Poultry Farming, Beekeeping, Handicrafts and services. Nearly 17 Lakh SHG women have already crossed the ₹1 lakh annual income mark in the state Odisha. Here in this state, exhibitions like Subhadra Shakti Mela are organized regularly to showcase and sell SHG products leading to Visibility, Market Access and Confidence. They also avail interest free loans up to ₹10 lakh.
The Role of SEWA
Challenges and Sustainability
There are certain challenges faced by the SHGs that need to address to ensure their long-tern success:
1. Quality Over Quantity
There should be proper training and cohesion in the group because of this rapid expansion comes with the cost. All SHGs are not function effectively or transparently. So, first the focus must be on strengthening the existing SHGs rather than merely creating new ones.
2. Market Linkages
There should be a equation between producing goods and finding stable markets with fair prices. Many SHG enterprises has suffering from lack of branding, packaging and marketing which limiting their earnings. They need support in e-commerce, trade fairs and B2B partnerships for the real success in long term.
3. Loan Repayment
It is critical to maintain discipline in repayment of loan as SHGs are moving to more formal credit systems. Even though the instances of defaults are still relatively low but can jeopardize the group credibility and restriction in access to future funding.
4. Digital Divide
Now in this digital world the SHG members need digital literacy to access banking apps, online marketplaces and mobile wallets. Without digital literacy they might risking the exclusion from the new opportunities in the Digital World.
Social and Emotional Empowerment
The power of SHGs are beyond money and economics. Women building bonds of trust and mutual support by meeting together regularly. This platform is also acting as a place where domestic issues, health concerns, child education, legal awareness are discussed. These SHGs are also played important roles in local governance, sanitation campaigns and anti alcohol movement.
The SHGs are building self esteem in women and turning homemakers into entrepreneurs, consumers into producers and dependents into decision makers forming part of development of nation. Looking forward for more initiatives to develop SHGs more effectively and efficiently.
Credits & Sources:
- Ministry of Rural Development, Government of India: rural.gov.in
- Times of India reports (Bhubaneswar, Ranchi, Prayagraj, Lucknow)
- SEWA India: Wikipedia - SEWA