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CEC Assignment 3

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14 views

CEC Assignment 3

Uploaded by

jassuu017
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SELF HELP GROUPS

INTRODUCTION
Self-help Groups (SHGs) are informal associations
of people who come together to find ways to
improve their living conditions. They are generally
self-governed and peer-controlled.
People of similar economic and social
backgrounds associate generally with the help of
any NGO or government agency and try to
resolve their issues, and improve their living
conditions.
Functions of Self Help Groups
• They try to build the functional capacity of poor and marginalized
sections of society in the domain of employment and income-
generating activities.
• They offer collateral-free loans to sections of people that generally find
it hard to get loans from banks.
• They also resolve conflicts via mutual discussions and collective
leadership.
• They are an important source of microfinance services to the poor.
• They act as a go-through for formal banking services to reach the poor,
especially in rural areas.
• They also encourage the habit of saving among the poor.
Need for Self Help Groups
● One of the chief reasons for rural poverty is the lack of access or limited access to credit and
financial services.
● The Rangarajan Committee Report highlighted four major reasons for lack of financial
inclusion in India. They are:
○ Inability to give collateral security
○ Weak credit absorption capacity
○ The insufficient reach of institutions
○ Weak community network
● It is being recognised that one of the most important elements of credit linkage in rural areas
is the prevalence of sound community networks in Indian villages.
● SHGs play a vital role in giving credit access to the poor and this is extremely crucial in poverty
alleviation.
● They also play a great role in empowering women because SHGs help women from
economically weaker sections build social capital.
● Financial independence through self-employment opportunities also helps improve other
development factors such as literacy levels, improved healthcare and better family planning.
Advantages of Self Help Groups
• Financial Inclusion – SHGs incentivise banks to lend to poor and marginalised sections
of society because of the assurance of returns.
• Voice to marginalised – SHGs have given a voice to the otherwise underrepresented
and voiceless sections of society.
• Social Integrity – SHGs help eradicate many social ills such as dowry, alcoholism, early
marriage, etc.
• Gender Equality – By empowering women SHGs help steer the nation towards true
gender equality.
• Pressure Groups – SHGs act as pressure groups through which pressure can be
mounted on the government to act on important issues.
• Enhancing the efficiency of government schemes – SHGs help implement and
improve the efficiency of government schemes. They also help reduce
corruption through social audits.
• Alternate source of livelihood/employment – SHGa help people earn their
livelihood by providing vocational training, and also help improve their existing
source of livelihood by offering tools, etc. They also help ease the dependency
on agriculture.
• Impact on healthcare and housing – Financial inclusion due to SHGs has led to
better family planning, reduced rates of child mortality, enhanced maternal
health and also helped people fight diseases better by way of better nutrition,
healthcare facilities and housing.
• Banking literacy – SHGs encourage people to save and promote banking literacy
among the rural segment.
Problems of Self Help Groups (SHGs)
• Need for extending this idea into the poorest families, which is not
necessarily the case at present.
• Patriarchal mindset prevailing which prevents many women from coming
forward.
• There are about 1.2 lakh branches of banks in rural areas as opposed to 6
lakh villages in the country. There is a need to expand banking amenities
further.
• Sustainability and the quality of operations of such groups have been
questionable.
• There is a need for monitoring cells to be established for SHGs across the
country.
• The SHGs work on mutual trust. The deposits are not safe or secure.
Self Help Groups in India
Kudumbashree in Kerala
The Kudumbashree project was started in Kerala in 1998, as a community
action to eradicate poverty. It has become the largest women-
empowering project in India. There are 3 components namely,
microcredit, entrepreneurship and empowerment. Kudumbashree is a
government agency

Mahila Aarthik Vikas Mahamandal (MAVIM) in Maharashtra


SHGs in Maharashtra were unable to cope with the growing volume and
financial transactions and needed professional help. Community
managed resource centre (CMRC) under MAVIM was launched to
provide financial and livelihood services to SHGs. CMRC is self-sustaining
and provides need-based services.
THANK YOU

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