Professional Documents
Culture Documents
Economics Project - Arpit Jain
Economics Project - Arpit Jain
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ARPIT JAIN
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SIGNATURE OF PRINCIPAL
SIGNATURE OF TEACHER
INTRODUCTION
EVOLUTION
CONCEPT OF SHGs
HOW TO FORM SHGs
WORKING OF SHGs
OBJECTIVES OF SHGs
FEATURES OF SHGs
ADVANTAGES OF SHGs
CHARACTERISTICS OF SHGs
CONCLUSION
BIBLIOGRAPHY
INTRODUCTION
A self-help group (commonly abbreviated SHG) is a financial
intermediary committee usually composed of 10 to 25 local women between the
ages of 18 and 40. Most self-help groups are in India, though they can be found in
other countries, especially in South Asia and Southeast Asia. A SHG is generally a
group of people who work on daily wages who form a loose grouping or union.
Money is collected from those who are able to donate and given to members in
need.
Members may also make small regular savings contributions over a few months until
there is enough money in the group to begin lending. Funds may then be lent back
to the members or to others in the village for any purpose. In India, many SHGs are
linked with banks for the delivery of micro-credit.
The SHG movement as provider of social capital has taken centre stage in the last
twenty years of India's rural development. The grassroots rural institutions have
played key role in the capacity building of SHGs. The SHG as organisational
mechanism has the potentials to contribute to the poverty eradication initiatives as
initiated by Government and Non Government Organisations in rural India. The
savings and credit mechanism has also reached grassroot level through SHG
movement. The growth stories of Indian economy have given the Indian government
the challenges and responsibilities to pull its 400 million of rural population out of
poverty. The institutional initiatives include running micro finance, interacting with
the government to help poor people access different poverty eradication programs
and in implementing small livelihood based programs for the poor and
disadvantaged community. The present book captures the evolution of SHGs as
triggered by public sector organisation, peoples' organisations and NGOs in the rural
ambience of West Bengal, India through Case Study approaches.
CONCEPT OF SHGs
Self help groups are voluntary association of people formed to attain certain
collective goals, both economic and social goals. Self help groups are normally
formed of the poor coming from rural or semi-urban areas. Each group consists of
10 to 20 members of small and marginal farmers, landless agriculture laborers, rural
artisans, women folk, and micro-entrepreneurs. A group could be exclusively male
or female, or even mixed. However, majority self help groups are female groups.
This handbook has been prepared for local animators or group promoters for
helping the poor to form self-help groups (SHGs) that can be linked to a local bank.
It has been written by the National Bank for Agriculture and Rural Development in
India and is thus particularly focused on the Indian context. However, it provides
excellent advice for the creation and function of SHGs, which can be applied in any
environment where the establishment of SHGs are legally and culturally appropriate.
All self-help groups are based on the fundamental principles of “helping each other”
and “unity is strength”. You can use this handbook to develop questions to ask
potential SHG members in order to gain a sense of the feasibility of establishing a
SHG in the area; and the methods to use in promoting SHGs. The handbook will
help you assist the members in defining the division of responsibilities within their
SHG. It will also help you to explain the purposes and different types of books that
an SHG must learn to keep. Example pages from savings and loan account
registers and a cash book are provided in an annex.
1. The opening of a bank account. The SHG presents the bank with a resolution
stating its intent to open a bank account, the authorisation of at least three
members to jointly operate upon their account, and a copy of the rules and
regulations of the SHG if available.
2. Internal lending. The handbook stresses how it is important for the SHG to
practice internal lending before opening a bank account, as it is through
internal lending that the SHG will learn to properly manage, utilise and repay
their SHG loans.
3. Assessment of the SHG. A clear and simple checklist is provided for a bank
manager to use to determine whether an SHG is functioning well and is
creditworthy. Example values for each criterion in the checklist are given under
the heading of very good, good and unsatisfactory.
4. Sanction of credit facility to the SHG. The group is collectively responsible for
the repayment of the loan. NABARD accepts this as security, instead of the
traditional collateral.
WORKING OF SHGs
(i)A typical SHG has 15-20 members, usually belonging to one neighbourhood, who
meet and save regularly.
(ii)Saving per member varies from Rs 25 to Rs 100 or more, depending on the ability
of the people to save. Members can take small loans from the group itself to meet
their needs.
(iii)The group charges interest on these loans but this is still less than what the
moneylender charges. After a year or two, if the group is regular in savings, it
becomes eligible for availing loan from the bank.
(iv)Loan is sanctioned in the name of the group and is meant to create self
employment opportunities for the members.
(v)Most of the important decisions regarding the savings and loan activities are
taken by the group members. The group decides as regards the loans to be granted
— the purpose, amount, interest to be charged, repayment schedule etc. Also, it is
the group which is responsible for the repayment of the loan.
OBJECTIVES OF SHGs
Self-help groups work to achieve several objectives collectively as well for its
members individually which are as follows:-
3. The ideal size of a Self Help Group ranges between 10 and 20 members.
6. Each group should have only one member from one single family.
8. Self Help Group holds weekly meetings mostly during non-working hours,
and full attendance is made mandatory for better participation.
10. Every group provides a platform to its members for exchange of their views
and ideas freely.
ADVANTAGES OF SHGs
Self-help groups are informal and voluntary associations. They need not be
registered under any Act or law of the government.
Only one member from each family shall join. This ensures the participation of
families in the groups.
Self-help groups either consist of men or women. The mixed group are not
given preference. This owes to the mindset of individuals in rural areas where
women participation is restricted.
The members of the group conduct meetings and meet regularly. Generally,
they should meet weekly or monthly. This helps the member in understanding
each other better and form better relations.
There are mutual trust and confidence among the members of the group. This
is the key to successful and prolonged functioning of the groups.
CONCLUSION
https://www.drishtiias.com/to-the-points/Paper2/self-help-groups-shgs
https://vikaspedia.in/social-welfare/rural-poverty-alleviation-1/self-help-
groups/overview-of-shgs
https://shodhgangotri.inflibnet.ac.in/bitstream/123456789/1261/2/02_introd
uction.pdf