The emergence of Self-Help Groups (SHGs) in contemporary times reflects a noteworthy shift in the landscape of developmental initiatives, indicating a gradual retreat of the State from direct involvement in such activities. These groups, typically comprising individuals with common socio-economic interests, have become instrumental in fostering community-driven development, empowering marginalized sections of society, and addressing local challenges. The role of SHGs in developmental activities is multifaceted, encompassing areas such as women’s empowerment, poverty alleviation, and rural development. By pooling resources and leveraging collective strength, SHGs create a platform for financial inclusion through microfinance, skill development, and entrepreneurship, thereby contributing to sustainable socio-economic progress.
Tag: Governance.
Decoding the Question:
- In the Introduction, try to briefly write about the Self-Help Groups (SHGs).
- In Body,
- Write the positive role of SHGs in developmental activities.
- Write about the challenges faced by SHGs and various measures taken by the Government of India to address the problems and promote the SHGs.
- In Conclusion, try to write about the overall significance of SHGs and suggest measures to improve their role.
Answer:
Self-Help Groups (SHGs) are informal associations of people who choose to come together to find ways to improve their living conditions. Such groups work as a collective guarantee system for members who propose to borrow from organized sources. The poor collect their savings and save it in banks. In return they receive easy access to loans with a small rate of interest to start their micro unit enterprise. . At present SHGs are growing at a rapid pace with an eye to helping women and marginalized communities to change their position within the society.
Positive Role of SHGs:
- Financial inclusion: It provides cheap collateral free loans, promotes saving and teaches financial management to people. It also helps in recovery of loans.
- Delivery of essential services: SHGs are effective delivery channels for various government schemes and programs. These also help in reducing corruption by conducting social audits.
- Women empowerment: It provides economic benefits to the women by providing income-generating activities. Economic independence facilitates in bringing about sexual equality and an increase in women’s income translates more directly into family wellbeing.
- Political empowerment: SHGs are self-governing in nature, which improves the decision-making power, and develops leadership and teamwork of people. These also highlight various social issues & influence decisions of the government.
- Rural development: It plays a significant role in self-employment by raising the level of income and standard of living among rural people.
- Create awareness: It creates awareness about rights, policies, and schemes of government among people and acts as a powerful vehicle for socio-economic development.
- Economic empowerment: It provides skill and training to people for gainful employment and to involve the poor in productive activities
- Social development: It increases community participation, and social cohesion, creates strong bonds of sympathy, provides a forum for sharing ideas, and works as a collective guarantee facility for people.
Measures Taken by the Government to Promote the SHGs:
- As part of the National Rural Livelihood Mission (NRLM) or Aajeevika, the government facilitates women-led self-help groups (SHGs) by giving them bank loans at easy interest rates. This interest subvention provision has been further extended to more districts.
- The government has promoted the Self-Help Group (SHG)-Bank Linkage Programme to be implemented by commercial banks, regional rural banks and cooperative banks for providing micro-finance to SHGs.
- NABARD promotes SHGs by providing grant support for training, capacity building, skill upgradation, exposure visits etc.
- The scheme for promotion and financing of Women Self Help Groups (WSHG) is being implemented by NABARD across backward and Left Wing Extremism (LWE) affected districts.
- A fund called “Women SHGs Development Fund” with a corpus of Rs.500 crore to empower women-led SHGs has been set up. It is to be operated by NABARD.
- Rashtriya Mahila Kosh provides loans to intermediary organizations which further lend it to SHGs.
Challenges Faced by the SHGs:
- Weak Financial Management: There is the diversion of funds in other activities like Marriages, household activities, etc.
- Lack of Finances: Many public sector banks and micro-finance institutions are not willing to provide financial services to the poor due to the high cost of services.
- There is meager income from various enterprises, poor management practices, poor scientific practices, and a lack of specialized training in taking up income-generating activities.
- Lack of awareness: The majority of the group is unaware of the schemes of assistance offered to them.
- There is a lack of social mobility because of restrictions in the family as their social problem.
SHGs have evolved as a movement for marginalized communities, the poor, and women. It provides self-confidence and social, economic, and political empowerment to people. However, some shortfalls can be addressed by capacity building, financial empowerment, and proper monitoring systems.
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