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Self-Help Groups (SHGs) represent collectives or community-based organisations,
wherein individuals unite voluntarily with the aim of addressing common socio-economic issues, improving their livelihoods and enhancing their quality of life. Typically originating
as small assemblies of rural individuals, SHGs emerge when community members,
recognizing shared challenges, opt to unite voluntarily to uplift their socio-economic
circumstances. These groups may take on either a formal, registered structure or remain
informal. As defined by NABARD, SHGs consist of 20 or fewer individuals from
similar socio-economic backgrounds who converge to tackle common issues by
forming their own support networks. Presently, India boasts approximately 83 lakh
SHGs, primarily comprising members from local villages.
The idea encompasses the values of saving, lending, and mutual assistance, with SHGs
typically operating under self-regulation and peer oversight, promoting financial
inclusivity. These groups play a significant role in institutionalizing women’s economic
autonomy. Typically, SHGs operate informally and voluntarily. In the early 1990s,
banks were authorized to establish savings accounts for SHGs, facilitating economic
empowerment.
Self-Help Groups are voluntary assemblies aimed at achieving shared objectives, uniting
individuals of similar social and economic backgrounds, or traditional occupations to
pool and administer resources for mutual benefit. The existence of robust community
networks within Indian villages is a key factor in facilitating credit connections in rural
regions, fostering the growth of SHGs. These groups serve as pivotal avenues for
providing financial access to impoverished communities, thus significantly contributing
to poverty reduction efforts. Additionally, SHGs play a pivotal role in empowering
women from financially disadvantaged backgrounds by facilitating the development of
social capital. Enhancing financial freedom through self-employment arenas not only
contributes to economic empowerment but also leads to advancements in other
developmental aspects, including literacy rates, healthcare quality, and family planning
initiatives.