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The full form of SHG is Self-Help Group. Self-Help Groups (SHGs) are a type of microfinance organisation comprised of a small group of people who come together to financially and emotionally help one another. They are usually made up of persons from similar economic, social, and cultural backgrounds who want to improve their financial status and way of living. SHGs are frequently founded with the objective of providing members with financing as well as financial literacy and entrepreneurship training and support. They are typically informal groups that are not technically established as enterprises or organisations, and they are frequently backed by non-governmental organisations (NGOs) or other external organisations that give technical assistance and guidance. SHGs are a popular and effective means for people in developing countries to have access to financial services and enhance their economic well-being, and they have been proven to reduce poverty and promote economic development.
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What is a Self-Help Group (SHG)?
A self-help group is generally a voluntary group of 10–20 members who regularly save small amounts of money. These savings are pooled together and used to provide loans to members at low interest rates.
SHGs are especially popular in rural areas and play a major role in:
- Women empowerment
- Poverty reduction
- Financial inclusion
Objectives of SHG
The main objectives of Self Help Groups include:
- Encouraging regular savings habits
- Providing easy access to credit without collateral
- Promoting self-employment and entrepreneurship
- Improving financial literacy
- Empowering women and the weaker sections of society
- Reducing dependency on moneylenders
Key Features of SHG
Some important features of Self Help Groups are:
- Small group of 10–20 members
- Members usually belong to similar economic backgrounds
- Regular meetings and savings
- Democratic decision-making
- Internal lending system
- Linked with banks under government schemes
Importance of SHG in India
Self-help groups play a crucial role in India’s socio-economic development, especially in rural and semi-urban areas. Why SHGs Are Important:
- Help in women’s empowerment
- Create income-generating opportunities
- Promote financial independence
- Support rural development
- Reduce poverty and unemployment
- SHGs are strongly supported by institutions like NABARD, NGOs, and state governments.
SHG and Government Schemes
In India, SHGs are connected with several government initiatives, such as:
- National Rural Livelihood Mission (NRLM)
- Deendayal Antyodaya Yojana
- SHG–Bank Linkage Programme
- Mudra Yojana (indirectly through group enterprises)
These schemes provide training, financial assistance, and market exposure to SHG members.
Goals of SHG
The goals of self-help groups vary based on the group’s unique focus, but some typical goals include:
- Self-help groups can provide a sense of belonging and a secure space for people to express their experiences and thoughts without fear of judgment.
- Members of self-help groups can offer practical advice and solutions for dealing with and overcoming difficulties.
- Encourage personal growth and self-improvement: Self-help groups can assist individuals in identifying and working towards their goals, as well as providing accountability and encouragement.
- Some self-help groups may focus on promoting healthy behaviours such as exercise and nutrition, or they may give resources for individuals to make positive changes in their lives.
- Some self-help organisations may also seek to advocate for social change or to meet community needs.
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