ECONOMICS PROJECT
TOPIC:
SELF HELP GROUP
MADE BY: SHREYA YADAV
CLASS: XII F
ROLLNO. : 17
INDEX
1. What is SHG
2. Objectives of SHG
3. Need of SHG
4. Functions of SHG
5. Rules of an SHG
6. Advantages of SHG
7. How did SHG started in India
8. Initiative by NABARD
9. Weakness of SHG
10. How to form bank linkage
11. How to make SHG more efficient
12. Women empowerment in India.
13. Impact of SHG in Economy.
14. Analysis
15. Conclusion
1. INTRODUCTION
A self-help group (SHG) is a financial intermediary
committee usually composed of 10-20 local women or
men. Most self-help group are located in India, though
SHG can be found in other countries, especially in
South Asia & Southeast Asia. SHG is nothing but a
group of people daily wages, they form a group and
from that group one person collects the money and
gives the: money who are on to the person who is in
need. Members also make small regular savings
contributions over a few months until there is enough
money to begin lending. In the group Funds may then
be lent back to the members or to others. In the village
for any purpose. In India, many SHGs are linked to
banks for micro-credit.
Microfinance can help families to generate sufficient
income to send their children to school rather than
work. Microfinance institutions can support poor
people in managing their savings. They offer loans to
poor people either for business purposes or to deal
with financial emergencies caused by illness, accidents,
funerals or otherwise. The vast majority of families of
child workers, however, doesn’t have access to the
services of microfinance institutions. They don’t meet
the requirements, or are excluded from loan groups,
because they don’t have collateral, because they are
indebted or because they are no permanent residents
in the place of work.
2. OBJECTIVES OF SHG
1. Promote savings among members.
2. Encourage financial inclusion and access to credit.
3. Foster entrepreneurship and income generation.
4. Facilitate skill development and vocational training.
5. Enhance financial literacy and management skills.
6. Improve access to healthcare and promote health
awareness.
7. Create a platform for collective decision-making and
problem-solving.
8. Empower women and promote gender equality.
9. Provide support for education and educational
opportunities.
10. Facilitate access to government schemes and
programs.
11. Encourage sustainable agriculture practices and
agricultural diversification.
12. Promote environmental awareness and
conservation.
13. Strengthen community bonds and social cohesion.
14. Encourage the adoption of technology for better
productivity.
15. Enhance awareness and utilization of government
welfare programs.
16. Facilitate networking and collaboration with other
SHGs and organizations.
17. Provide a platform for sharing experiences and
learning from each other.
18. Support disaster preparedness and resilience.
19. Promote responsible and ethical business practices.
20. Facilitate access to markets and marketing support
for products and services.
21. Empower members to negotiate better prices for
their products.
22. Encourage the formation of cooperatives and
producer groups.
23. Support members in accessing legal services and
addressing legal issues.
24. Promote women's rights and empowerment.
25. Advocate for social justice and equality.
26. Enhance access to clean water and sanitation
facilities.
27. Promote sustainable energy practices and
renewable energy solutions.
28. Provide mentorship and guidance for personal and
professional development.
29. Support members in accessing government
entitlements and subsidies.
30. Improve the overall standard of living for members
and their families.
3. NEED OF SELF HELP GROUP
Self-help corporations (SHGs) play a critical function in
empowering folks and communities by fostering self-
reliance, social cohesion, and financial development.
These groups, typically consisting of men and
women with similar socio-economic backgrounds,
come collectively to tackle frequent troubles and enha
nce their lives collectively. Here are some
key factors highlighting the importance of self-
help groups:
Empowerment: SHGs grant a platform for marginalized
individuals, specifically women, to voice their concerns,
share experiences, and collectively find options to their
problems. Through ordinary conferences and
discussions, members reap self-confidence, decision-
making skills, and an experience of empowerment.
Financial Inclusion: SHGs
promote economic literacy, financial savings habits,
and get entry to to credit. Members pool their financial
savings and create a common fund, which can be
utilized for character or group-based income-
generating activities.
This allows individuals to start or extend businesses,
make investments in education, healthcare,
and impenetrable their economic future.
Social Support: SHGs foster a strong sense of
social aid and unity among members.
They grant a secure house for humans to share their
challenges, seek advice, and acquire emotional
support. This network of believe and cooperation now
not only enhances individual well-being however addi
tionally strengthens community ties.
Skill Development: Self-
help organizations regularly prepare skill-building
workshops, coaching programs,
and recognition campaigns.
Members gather new capabilities and knowledge, such
as entrepreneurship, vocational training, healthcare
practices, and sustainable farming techniques. This
equips them with the tools to improve their livelihoods
and make contributions to
the neighbourhood economy.
Women's Empowerment: SHGs have
been specifically advantageous in
empowering ladies and promoting gender equality.
By imparting female with a platform to participate in
decision-making processes, get right of entry
to resources, and generate income,
SHGs assignment ordinary gender roles and foster
women's leadership and agency.
4. FUNCTIONS OF SELF HELP GROUP
Mutual Support: SHGs create a platform for individuals
facing similar challenges or circumstances to come
together and support each other. Members share their
experiences, exchange knowledge and information,
and provide emotional support. This function helps
build resilience, confidence, and a sense of belonging
among the members.
Savings and Credit: SHGs encourage regular savings
among their members. Members contribute a fixed
amount to a common fund, which is then used to
provide loans to members. This function promotes
financial discipline, access to credit at reasonable
interest rates, and helps members meet their financial
needs, such as starting or expanding businesses,
education, healthcare, or emergencies.
Income Generation: SHGs facilitate income-generating
activities among their members. They provide
guidance, technical assistance, and access to resources
such as credit, market information, and networks. This
function enables members to start small businesses,
engage in farming or handicrafts, or undertake other
income-generating ventures. By generating income,
members improve their financial situation and
contribute to local economic development.
Advocacy and Collective Action: SHGs advocate for the
rights and interests of their members at the
community and policy levels. They raise awareness
about social issues, address common challenges faced
by their communities, and work towards improving
services, policies, and infrastructure. This function
empowers members to actively participate in decision-
making processes and bring about positive change in
their communities.
Social and Cultural Activities: SHGs often organize
social and cultural activities to foster a sense of
community, celebrate achievements, and promote
local traditions and values. These activities include
festivals, group outings, community events, and
cultural performances. This function strengthens social
bonds, promotes inclusivity, and preserves cultural
heritage.
5. RULES OF AN SELF HELP GROUP
The ideal size of an SHG is 10 to 20 members. The
group need not be registered.
For Membership:
From one family, only one person can become a
member of an SHG. (More families can join SHGs
this way.)
The group normally consists of either only men or
of only women. Mixed groups are generally not
preferred. Women’s groups are generally found to
perform better. (They are better in savings and
they usually ensure proper use of loans.)
Members should have the same social and
financial background. (Advantage: This makes it
easier for the members to interact freely with each
other. If members are both from rich as well as
poor class, the poor may hardly get an opportunity
to express themselves.)
Some Common factors for Membership in an SHG
o Women/men from very poor households.
o Those who depend on moneylenders even for
daily necessities.
o Those with a per capita income not exceeding
Rs. 250 per month.
o Those having dry land holding not exceeding
2.5 acres.
Common living conditions for the Group
Members eg. Living in hut houses, Having no
access to safe drinking water, Presence of
illiterate adults in the family.
o The group should meet regularly. Ideally,
the conferences ought to be weekly or at
least monthly. (Advantage: They end
up closer, if they meet regularly. This helps
them to recognize each other’s difficulties
better.)
Compulsory attendance: Full attendance in all
the team conferences will make it handy for
the SHG to stabilise and start working to
the satisfaction of all.
Membership register, minutes register etc.,
are to be saved up to date by
using the team by means of making the
entries regularly. (Advantage: This helps you
to be aware of about the SHG easily.
It additionally helps to build have
faith amongst the SHG members.)
6. ADVANTAGES OF SELF HELP GROUP
1. Empowerment of Marginalized Groups: SHGs,
particularly for women and marginalized communities,
enable them to voice their concerns, participate in
decision-making, challenge social norms, and improve
their socio-economic status.
2. Collective Action: SHGs empower members to
advocate for their rights, address common issues, and
drive positive change in their communities through
collective action.
3. Poverty elimination: By generating income, SHGs
help members improve their livelihoods, reduce
vulnerability to poverty, and contribute to local
economic development.
4. Social Cohesion: SHGs foster a sense of belonging,
social bonds, and community solidarity, promoting
social cohesion and inclusivity.
5. Knowledge Sharing: SHGs provide a platform for
sharing information, best practices, and innovative
ideas, enabling members to learn from each other and
enhance their knowledge.
7. HOW DID SELF HELP GROUP START IN INDIA
Self-help groups (SHGs) have a rich history in India,
with their origins dating back to the 1970s. The
concept of SHGs was first introduced as part of the
integrated rural development program, initiated by
NGOs and government agencies to address poverty
and empower marginalized communities. Here is a
brief overview of the beginnings of SHGs in India:
1970s-1980s: The SHG movement in India started
gaining popularity during this period. NGOs like
MYRADA (Mysore Resettlement and Development
Agency) and SEWA (Self-Employed Women's
Association) started the formation of small groups to
address the needs of the rural poor and women in
particular. These early initiatives focused on creating
savings and credit-based groups.
Bank-Linkage Model: The Bank-Linkage model emerged
as a significant development in the SHG movement.
Under this model, SHGs were linked with banks,
enabling members to access formal credit and other
financial services. NABARD played a crucial role in
training and capacity building of SHGs and facilitating
linkages with banks
8. INITIATIVE BY NABARD
National Bank of Agriculture and Rural Development
was established on the recommendation of B. Shiva
Raman committee, (by Act 61,1981 of Parliament) on
12th July 1982 to implement the National Bank for
Agriculture and Rural Development Act 1981.It is one
of the Premier agencies providing development credit
in rural areas. Its main focus was to uplift rural
community
Steps taken by NABARD:
1. Bank-Linkage Program: NABARD started the Bank-
Linkage program, which involves linking SHGs with
formal banking institutions. Under this program, SHGs
can open savings accounts, access credit, and avail
other financial services from banks. NABARD has
facilitated the formation of Self-Help Promoting
Institutions (SHPIs) as intermediaries to assist SHGs in
the bank-linkage process.
2. Monitoring and Support: NABARD and banks closely
monitor the performance of SHGs and provide
guidance and support as needed. Regular interactions,
reviews, and audits help ensure transparency,
accountability, and adherence to program guidelines.
Major Challenges and Issues faced by NABARD in
Implementing SHG- Bank Linkage Programme :-
1. Sensitization of bankers for acceptance of the
linkage programme.
2. Ensuring formation of quality SHGs.
3. NABARD also had to extend 100% refinance
assistance to banks for lending to SHGs.
4. Provide capacity building support on continuous
basis to SHG members, banks etc.
9. WEAKNESS OF SHG:
1. Lacks up-gradation of skills:
Most SHGs are not making use of new technological
innovations and skills. This is because there is limited
knowledge of new technologies and they do not have
the necessary skills to make use of the same.
2. Weak Financial Management:
It is also found that in certain group the return from
the business is not properly invested further in the
groups and the funds are used for other personal and
domestic purposes like marriage, construction of house
etc.
3. Insufficient Training Facilities:
The training facilities given to the members of SHGs in
the specific areas of product selection, quality of
products, production techniques, managerial ability,
packing, other technical knowledge are not adequate
to compete with that of strong units. Lacks security:
SHGs are mostly not registered. They are run based on
the trust between the members. The savings made by
the SHG members may not be safe, which brings in
mistrust between the members.
10. HOW TO FORM A BANK LINKAGE:
1. Opening a Savings Account:
Help the SHG select a suitable bank or financial
institution for opening a savings account. Collect the
required documents, such as identity proofs and
address proofs, from all SHG members. Complete the
necessary paperwork and submit it to the bank.
2. Regular Deposit and Regular Savings:
Ensure that each member contributes an initial deposit
to the SHG's savings account. Encourage regular
savings contributions from all members. Keep track of
individual savings records and maintain transparency
within the group.
3. Creditworthiness:
Help the SHG establish a positive track record by
maintaining regular savings and good financial
discipline. Support the SHG in developing a strong
credit history through prompt repayment of loans and
disciplined financial management.
4. Loan repayment and book keeping: Assist the SHG in
setting up a repayment schedule based on the loan
terms and conditions. Ensure that the SHG members
repay the loan Instalment on time. Maintain proper
records of loan transactions and repayments.
11. HOW TO MAKE SHG MORE EFFICIENT:
The Government play the position of a provider and
promoter, create a
supportive environment for
the growth and improvement of the SHG movement.
Expanding SHG Movement to Credit Deficient Areas of
the Country - such as Madhya
Pradesh, Rajasthan, States of the North-East.
The government plays a crucial role as a facilitator for
the SHGs. There are various government schemes
dedicated to the promotion of the SHGs. Some of them
are as follows:
Swarn Jayanti Gram Swarojgaar Yojana (SGSY): It
seeks to form SHGs and develop the skills of its
members to promote self-employment in rural areas.
This programme evolved to be a national movement in
2011 to become the National Rural Livelihood Mission.
National Rural Livelihood Mission (NRLM) is the
largest poverty alleviation program in the world. This
scheme covers 100 million families through 8.5million
SHGs.
84 million SHGs received collateral-free credit of which
88% are rural women.
In the Union Budget of 2023-2024- Vision for
AmritKaal:
The government will help these SHG’s to advance
to the next level of economic freedom by forming
big producer businesses each with several
thousand members and professionally
administered.
They will be assisted in obtaining basic materials as
well as improving the design, quality, branding,
and promotion of their goods.
12. WOMEN EMPOWERNMENT IN INDIA:
1. Financial Independence: SHGs encourage women to
save money regularly and access credit facilities. By
pooling their savings and accessing loans, women can
start income-generating activities, invest in small
businesses, and meet their financial needs. This
financial independence enables women to contribute
to household income, make independent financial
decisions, and reduce dependence on others.
2. Social Support and Empowerment: SHGs create a
supportive environment for women. Women can share
their experiences, challenges, and successes, thereby
building confidence and self-esteem. This support
network helps women overcome social barriers,
cultural norms, and gender biases, enabling them to
challenge traditional roles and stereotypes.
3. Role in Social Development: Women in SHGs often
undertake community development initiatives. They
work together to address social issues such as health,
sanitation, education, and women's welfare. By
actively participating in community activities, women
contribute to the overall development and well-being
of their communities.
13. IMPACT OF SHG IN ECONOMY:
1. Employment Generation: SHGs promote
entrepreneurship and self-employment among their
members. By engaging in income-generating activities,
such as small-scale businesses, farming, handicrafts, or
services, SHG members contribute to job creation. This
leads to increased employment opportunities.
2. Local Economic Development: SHGs often focus on
local economic activities, such as agriculture, small
industries, and handicrafts, which contribute to the
growth of the local economy. By producing goods and
services, SHGs stimulate local markets, generate
income, and support the livelihoods of both SHG
members and the wider community.
3. Micro finance and poverty: Alleviation: SHGs often
collaborate with microfinance institutions to provide
financial services to their members. Microfinance
programs facilitate small loans and financial services to
low-income individuals who do not have access to
traditional banking systems. This helps lift people out
of poverty, enabling them to invest in productive
assets, start businesses, and improve their overall
economic conditions.
ANALYSIS
CONCLUSION
REFERENCE
