By : Bilal Ahmad
The self Help Group growth which has almost assumed the form of a movement represents a massive grassroot level mobilization of poor rural population into small informal associations capable of forging links with formal systems to help access financial and other services needed for their socio economic advancement.Basically Self Help Groups (SHG) are being promoted as apart of the micro finance interventions aimed at helping the poor to obtain easily financial services like savings, credits and insurances.
The promotion of SHGs in india began more formally in 1992 with the launch of the Self Help Group( SHG) Bank linkage programme by National Bank for Agriculture and Rural Development ( NABARD).The main aim of this programme was to improve rural poor’s access to formal credit system in sustainable manner by making use of SHGs.
A self Help Group ( SHG) is basically an informal and a small association of poor having preferably similiar socio economic background and who have come together to realize some common goals based on the principles of collective responsibilities and Self Help.
First , a Self Help Group ( SHG) working on the principle of solidarity helps the poor to come together to pool their savings and access credit facilities.A SHG by tapping social capital like trust and reciprocation helps in replacing physical , collateral, a major hurdle faced by the poor in obtaining formal credit.Then through the principles of Joint liability and peer pressure , a SHG ensure prompt loan recovery from the members. In this process, a SHG helps the poor especially women to establish their creditworthiness.
The second major role of SHGs is seen in terms of their potential to empower the woman members.The Participation in SHG and the access obtained to savings and credit can play a transformational role for woman socially and economically.The access to savings and credit helps a woman member to take care of her family’s financial needs.This ability to meet such needs of the family would enhance the standing of the woman in the family leading to better gender relations.Self Help Groups ( SHGs) is further likely to enhance the awareness,skills and other liabilities of the woman resulting in building of individual self esteem and in getting due social recognition.
Registered or un registered group of micro entrepreneurs having homogenous social and economic background voluntarily coming together to save small amounts regularly and for eradication of poverty of members.They mutually agree to contribute to a common fund and to meet their emergency needs on mutual help basis.An economically poor individual gains strength as apart of a group. Further financing through SHG reduces taxation costs for both lenders and borrowers. Thus leads to inclusive and equitable development.
Author is a Research Scholar of Public Administration. He can be reached at Umarbilal201556@gmail.com