What are Self Help Groups?


1. SHGs are informal associations of people who choose to come together to find ways to improve their living conditions.

2. They are group formed voluntarily by anyone of the 3 agencies , 1. Bank 2. NGO  3. Government


What are its features?

1. SHG – can be registered / unregistered.

2. Have broad anti-poverty agendas.

What are the objectives of SHGs?

1. To improve the standard of living of people.

2.Eradicate poverty.

3. Improve national economy through financial inclusion.

Who are the Members?

1. Mostly among poor people (i.e) below poverty line.

2.Normally – maximum 10 to 20 people.

3.Weaker section of society (or) physically challenged – 5 to 10 people.

4. Each group consist of same gender only – (exception in special cases).


How they operate?


1)Maintains a  resolution book

2) when should they meet

3) decide minimum savings

Their  Savings will be in a common fund – Corpus Fund – in bank.

Why in bank? – for record purposes.

1.They get loans without security.

2.Get low interest loans.

3. They can invest in businesses.

4. Maintenance of resolution book.

5. Regular meetings.

6. Individual passbook.

7. Discuss social problems.

What are the advantages of SHGs?

1.To mobilize resources towards BPL.

2. To have awareness about life.

3.Timely financial assistance.

4.Making them self-reliant.

5.Entrepreneurial development.

6. Build leadership quality.

7.To uplift living conditions of down trodden people.


What is social Significance of SHG’s?

1. SHG & Politics – discuss the political problems – regarding elections – creates political

awareness among members.

2. SHG & Social Harmony – unite members who may be from different communities.

3.SHG & Social Justice – they raise their support when some injustice occurs to any of their members.

4. SHG & Community Development – down trodden people gets benefited.

5.SHG & Self-reliability – makes the members independent – especially women.

6.SHG & Financial Inclusion – more people are included financially under banking process – improves economy of the nation.


Role Played by Nabard?

1.Gives Rs.5lakhs loan if the transactions goes on for 1 year.

2. Special schemes – Capacity building and loanable funds

Liquidity support to banks for SHGs

1.Waives loans – no repayment of loans.

2. Gives subsidy in loans – Rs.1.25 lakhs out of Rs.5 lakhs no repayment required

(i.e) – it is enough to pay Rs.3.75 lakhs to the bank.

3. Revolving fund account (RFUD) – people can take loan upto ‘minus’ 60000 if there is no balance in their account.

Schemes by the governments for SHGs

1.National rural livelihood mission – brings at least one member, preferably women under SHG.

2.Bharatiya mahila bank – women’s bank – supports women’s SHGs.

3. Swarnjayanti Gram Swarozgar Yojana – anti-poverty program, generate employment – facilitates to form SHGs.

4. Prime Minister’s Rozgar Yojana – provide employment to educated unemployed youths – SHGs are also considered.

5.Mahalir thitam – by Tamil Nadu

What are their problems?

1. Misappropriation of funds.

2.No awareness of government schemes.

3. No homogeneous society.

4. Lacks training among rural people.

5. Drop outs – some people enjoy the benefits and migrate outside the village.

6.Financial difficulties.

7.Doesn’t cover urban areas.

8.Relationship between SHGs and the govt. agencies like regional rural banks, etc. should be clearly defined.