Title of the paper

Role Of The Self Help Group

In
Empowerment Of Women

Abstract :

Introduction :
The origin of Self Help Groups (SHGs) is the brainchild of Grameen Bank of
Bangladesh, founded by Prof. Mohammed Yunus in 1975, who tried out a new approach to
rural credit in Bangladesh. Grameen gave loans without asking borrowers either to provide
collateral or engage in paper work. In India NABARD initiated SHGs in the year 1986-87
But the real effort was taken after 1991-92 from the linkage of SHGs with the banks. A SHG
is a small economically homogeneous affinity group of the rural poor voluntarily coming
forward to save a small amount of money regularly, which is deposited in a common fund to
meet the members emergency needs and to provide collateral free loans decided by the
group. The SHGs have been recognized as useful tool to help the poor and as an alternative
mechanism to meet the urgent credit needs of poor through thrift.
Women empowerment is a process in which women challenge the existing
norms and culture, to effectively promote their well being. The participation of women in
Self Help Groups (SHGs) made a significant impact on their empowerment both in social
and economical aspects. Women constitute around fifty percent of the total human resources
in our economy. Yet women are the more poor and under privileged than me as they are
subject to many socio-economic and cultural constraints. The situation is more severe in the
rural and backward areas. Women development activities must be given importance to
eradicate poverty, increase the economic growth and for better standard of living.
Self Help Group(SHGs)-Bank Linkage Programme is emerging as a cost effective
mechanism for providing financial services to the Unreached Poor which has been
successful not only in meeting financial needs of the rural poor women but also strengthen
collective self help capacities of the poor ,leading to their empowerment. Rapid progress in
SHG formation has now turned into an empowerment movement among women cross the
country. Investing in women brings about a multiplier effect. Stories of women who not only
are better off economically as a result of access to financial services, but who are empowered
as well. Simply getting cash into the hands of women can lead to increased self-esteem,
control and empowerment by helping them achieve greater economic independence and
security, which in turn gives them the chance to contribute financially to their households and
communities because women tend to keep nothing back for themselves they contribute
decisively tothe well-being of their families. SHG by mobilizing women around thrift and
credit activities have resulted in economic self reliance there by changing their social attitude
and status in the family and society SHG has emerged as a key programming strategy for
most of the women development activities inculcated a great confidence in the mind
of majority of women to succeed in day to day life. Positive change was found in the attitude
of relatives and friends towards the women in self help groups.

REVIEW OF LITERATURE
According to B.Yuvaraja Reddy in his article (impact of SHG- Bank linkage
programme) in Banking and Finance journal, SHG is an association of poor people which is
voluntary in nature. Member of SHGs generally have the same economic background. They
form the voluntary association with a view to solve their common problems with mutual help.
SHG promotes small savings among the member which enables them to save some of their
earnings and increase the standard of living. In other words, SHG provides plat form to
savings mechanism and it contributes to the empowerment of poor women. The number of
member in each SHG should not exceed twenty.
NABARD developed the SHG-bank linkage approach as the core strategy that could
use by the banking system in India for increasing their outreach to the poor. The strategy
involved forming SHGs of the poor, encouraging them to pool thrift regularly, using the
pooled thrift to make small interest bearing loans to member and in the process, learning the
nuances of financial discipline.
According to Gladis Mary John (2008) found that membership in SHG inculcated a
great confidence in the mind of majority of people to succeed in day to day life. Positive
change was found in the attitude of relatives and friends towards the people in Self Help
Groups.

RESEARCH METHODOLOGY
In this research, we has used both primary and secondary data. The primary data has
been collected through personal interactions with the SHGs and their entrepreneurs by
preparing a questionnaire. Secondary data is being collected from various books, journals,
magazines, websites as well as newspapers.

LIMITATIONS TO THE STUDY

1. The study is restricted to Mumbai city only.
2. The number of people interviewed is limited to only 20.
3. The number of SHGs is limited to 05.

OBJECTIVE OF THE STUDY

The study is being conducted with the following objectives in mind:

To understand the concept of SHG.

To study the function of SHG in urban area.
To study the structure, conduct and performance of Self Help Groups.
To know the impact after becoming a member of SHG.

 To know how SHG play role in women empowerment.

Structure of self help group:

Self Help Group, non-professional organisation formed by people with a common
problem or situation, for the purpose of pooling resources, gathering information, and
offering mutual support, service, or care. A SHG in a group of about 10 to 20 people, from a
similar class and region, who come together to form saving and credit organisation.
They pooled financial resources to make small interest bearing loan to their members.
This process creates an ethic that focuses on saving first. The setting of terms and conditions
and accounting of the loan are done in the group by designated member.
A small group (15 to 20 members), voluntarily formed and related by affinity for
specific purpose, it is a group whose member use savings, credit and social involvement as
instrument of empowerment.
SHG services are
Thrift and credit activities
Participatory monitoring of the groups
Group level poverty reduction plans
The SHGs provide the benefits of economies of scale reducing costs in certain areas of the
production process which the members may decide to undertake as a common action. The
group also provides a cost effective credit delivery system, as the transaction costs of lending
decrease sharply both to the banks and the borrowers.
Self Help Group (SHGs)-Bank Linkage Programme is emerging as a cost effective
mechanism for providing financial services to the Unreached Poor which has been
successful not only in meeting financial needs of the poor but also strengthen collective selfhelp capacities of the poor ,leading to their empowerment.

CHARACTERISTICS OF SHG

Small- homogenous group for face to face interaction and relationship. The
membership of a group may range from 10-20. Ideal number of members would be
between 15 -20.
Has a code of conduct bye- laws / rules and regulations for effective administration
and management of the group.
Participatory Decision making Process.
Mobilizes Local Resources through regular savings.
Plans own Programme with own Resources.

 FUNCTIONING OF THE SHG

1. The group functions democratically with 2-3 office bearers elected by a consensus
of the group. Two office bearers viz. the President and Secretary are essential, while
a third office bearer i.e. a Treasurer is optional. Better to restrict the office bearers to
just two- President and Secretary.
2. Office bearers should rotate at least once in two years. Ideal rotation would be once
every year, depending on availability of educated members to act as Secretary.
3. Group meets periodically at fixed intervals for the following purpose:
a) To discuss, reflect on and find solutions to socio-economic issues/problems of
members, the group and of the community.
b) To transact business.
4. All members attendance and active participation at meetings is essential.
5. Decisions are taken at meetings by a consensus of the group and not by the
President and Secretary alone. The President and Secretary manage the administration
of group as per the bye-laws and group consensus.
6. All business is transacted at meetings and not privately with the President or
Secretary at their residence. The following business is transacted at meetings:
a) Collecting savings, fines, interest on loans, installment of refund of loans, and
contribution for nominal administrative expenses.
b) Decision on loan applications, and the amount to be sanctioned.
c) Decision to take up a common economic activity to build up the groups corpus
d) Decision to participate in any SHG meeting or training programme organized by
the
Government or by any NGO.

APPLICATION OF SHG
Management of the SHG

SHG elect a member as a chairman and Secretary of the group for a period of one
year.
The chairman acts as the representative of the groups and chairs group meeting while
the Secretary maintain records
Every decision of the group must be shares consulted and agreed by everyone
The group frames rules and regulations
The group must open an account with a bank
They must meet at least once a month
Maintenance of records. The following books are maintained by SHG
- Register of Minutes
- Register of accounts (Cash Book/ ledger/ vouchers/ receipts etc.)
- Admission register
- Attendance register
SHGs will close the annual account on the 31st march every year and the secretary
will present the annual reports related to savings loans activities etc.
The agenda of each group meeting shall consist of te following
- Monthly savings accounts reports and bank account reports
- Monthly savings

Other matters

Process in SHG Programme:

There must be awareness building in the community about the importance and role of
Self Help Groups.
Formation of Self Help Groups and imparting of training to group members and
leaders
Fixing the savings amount with members participation.
Formation of rules and regulations by facilitating the participation of all of the
members.
Fixing an amount for the rate of interest as per the general consensus of the SHG
members.
Motivating members to take loans for essential needs and then for CBL activities.
There should be regular monitoring and evaluation of the groups. After six months to
one year the SHG will be prepared for bank linkage. There should also be an
assessment of the groups maturity.
Making the SHGs self-reliant in book-keeping and banking work. Regular interaction
of group members with bankers, NABARD officials, and other stakeholders through
visits to groups.
Participation of group members in different workshops and meals organized by NGOs
and banks.
Motivating the groups members in different workshops and meals organized by
NGOs and banks.
Assisting the groups to ensure 100% repayment of loans, within the group and to the
banks.
Helping individuals within groups requiring larger loans after the initial bank linkages
to access individual loans through SHGs and CORD sponsorship.

SHG Development in India: An Overview

While the term self-help group or SHG can be used to describe a wide range of financial and
non-financial associations, in India it has come to refer to a form of Accumulating Saving and
Credit Association (ASCA) promoted by government agencies, NGOs or banks. These groups
manage and lend their accumulated savings and externally leveraged funds to their members.
SHGs have varied origins, mostly as part of integrated development programmes run by NGOs
with donor support. The major programme involving financial intermediation by SHGs is the
SHG-bank Linkage Programme. This Programme was launched in 1992 by National Bank for
Agriculture and Rural Development (NABARD), the apex bank for rural development in India.
By March 2002, the programme covered 7.8 million families with 90 per cent women members.
On-time repayment of loans was over 95% for banks participating in the programme. It also
involved 2,155 non-government organizations (NGOs) and other self-help promoting institutions.
NABARDs corporate mission is to make available microfinance services to 20 million poor
households, or one-third of the poor in the country, by 2008. However, there is at present a high
degree of concentration in the southern states, with just two states, Andhra Pradesh and Tamil
Nadu accounting for more than 66% of the SHGs linked to banks.

The Concept Of SHG Is Based On The Following Principles:

Self-help supplemented with mutual help can be a powerful vehicle for the poor in their
socioeconomic development;
Participative financial services management is more responsive and efficient;
Poor need not only credit support, but also savings and other services;
Poor can save and are bankable and SHGs as clients, result in wider out reach, lower transaction
cost and much lower risk costs for the banks;
Creation of a common fund by contributing small savings on a regular basis;
Flexible democratic system of working;
Loaning is done mainly on trust with a bare documentation and without any security;
Amounts loaned are small, frequent and for short duration;
Defaults are rare mainly due to group pressure; and
Periodic meetings non-traditional savings.
MICRO FINANCE PROGRAMMES are currently being promoted as a key strategy for
simultaneously addressing both poverty alleviation and womens empowerment.
Before 1990s, credit schemes for women were almost negligible. There were certain
misconception about the poor people that they need loan at subsidized rates of
interest on soft terms, they lack skills, capacity to save, credit worthiness and
therefore are not bankable. Nevertheless, the experiences of several and SHGs reveal
that rural poor are actually efficient managers of credit and finance. Availability of
timely and adequate credit is essential for them in their enterprises rather than
subsidies. Earlier government efforts through various poverty alleviation schemes
for self-employment by providing credit and subsidy received little success. Since
most of them were target based involving various government agencies and banks.
Meaning of Empowerment
Empowerment is not essentially political alone; it is a process having personal, economic, social and
political dimensions with personal empowerment being the core of the empowerment process. In fact
political empowerment will not succeed in the absence of economic empowerment.
The Scheme of Micro-financing through SHGs create empowerment promoting conditions for
women to move from positions of marginalisation within household decision making process and
exclusion within community, to one of greater centrality, inclusion of voice.
The Social processes of Micro financing programmes strengthens womens self esteem and self
worth, In still a greater sense of awareness of social and political issues leading to increased
mobility and reduced traditional seclusion of women.
Most importantly micro-finance programmes enable women to contribute to the household
economy, increasing their intra-household bargaining power. Thus, micro financing through Selfhelp groups has transferred the real economic power in the hands of women and has considerably
reduced their dependence on men. But the lack of education often comes in the way and many a
times they had to seek help from their husbands or any other educated man/ woman for day-today work. The political as well as economic empowerment will not succeed in the absence of
women education in skills and vocations they require the most. The Governments in developing
countries therefore must take effective steps to enrol the members of SHGs in the Schemes of
open schooling or any other distance mode to impart education. Although it is also true that
economic empowerment alone does not always lead to reversal in gender relationship.1

STRATEGY OF WOMEN EMPOWERMENT

In view of low literacy rate of women and the gigantic task of educating rural women
a suitable strategy will have to be planned. The major task is to identify the areas
where these groups in fact, are facing problems because at this stage only the
problem solving adult learning technique will attract these rural poor to improve
their working and income.
The success of any strategy of women empowerment depends upon the following
factors:
1. Level of education, hard work
2. Social custom
3. Family planning, small family
4. Health, medical services, cleanliness
5. Environment, tree growing, kitchen gardening
.

FINDING

There has been a positive impact of SHGs in raising fund and also the significant increase in
additional monthly income of beneficiaries after joining SHG.
The primary focus of the SHGs is to improve the standard of living of the members.

It inculcates habit of saving and Financial Decision Making.

SHG provides Employment opportunity to the lower middle class people.
It help for decision-making within the household
SHG helps for Self Confidence among Members
SHG focus on per capita-income of people
It helps for increasing national income of our country.
It improves economic condition of India.
It encourages investment in gold, immovable property.
SHG People standard of living also increases.
It improves economic standard of SHG members.