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SHGs in India Mbfi Unit 2

The document discusses self-help groups (SHGs) in India, which are small village-based financial intermediary committees consisting of 10-20 local women or men. SHGs come together for common purposes like investments and credit. They promote savings, financial skills, and access to loans. SHGs have positive economic and social objectives, including improving living standards, building skills, and providing community support. Key features include voluntary membership of those in the same socioeconomic class, rotating leadership, and jointly managed savings and lending. SHGs empower women and support rural development through activities like training, entrepreneurship, and collective problem solving.

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Yenkee Adarsh Arora
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652 views32 pages

SHGs in India Mbfi Unit 2

The document discusses self-help groups (SHGs) in India, which are small village-based financial intermediary committees consisting of 10-20 local women or men. SHGs come together for common purposes like investments and credit. They promote savings, financial skills, and access to loans. SHGs have positive economic and social objectives, including improving living standards, building skills, and providing community support. Key features include voluntary membership of those in the same socioeconomic class, rotating leadership, and jointly managed savings and lending. SHGs empower women and support rural development through activities like training, entrepreneurship, and collective problem solving.

Uploaded by

Yenkee Adarsh Arora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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You are on page 1/ 32

INSTITUTE- University School of

Business
DEPARTMENT - MBA
Master of Business Administration
Managing Banks and Financial Statements
Self Help Group (SHGs) in India

ATUL SHIVA DISCOVER . LEARN . EMPOWER


Assistant Professor, USB-MBA, CU
Financial
Statements of
Banks in India
Course Outcome

CO No Title Level
Sources and Application of
Bank Funds
CO1 Brief History of Banking System in Remember
India

CO2 Financial Statements of Banks in Understand


India and their Lending functions

CO3 Risk Management in Banks Critical


review and
analysis
2
Role of SHGs
• A self-help group, abbreviated as (SHG) is a village-based financial
intermediary committee normally consist of 10–20 local women or
men.
• Self-help group is basically group of individual members who by free
alliance come together for a common communal purpose.
• Practically, self-help group include individual members recognized to
each other and belong to the same village, community and even
marketing area.
• They are homogeneous and have certain pre group social binding
factors.
• In the context of micro-finance, self-help group are made around
the theme of investments and credit. 3
• Most self-help groups are situated in India but these
groups are also found in other countries, particularly in
South Asia and Southeast Asia.
• Self-help group are unique and pioneering
organizational establishment in India for the
enhancement of women and welfare.
• All women in India are encouraged to join any one of
SHGs for training and development, so as to become
potential entrepreneur and skilled worker.
• Self-help group are promoted by the Government as if
women in India may not be ingenious enough to be
entrepreneurs. 4
• The Self Help Groups Guiding Principle emphasizes on
organizing the rural poor into small groups through a
process of social mobilization, training and providing
bank credit and government subsidy.
• Self-help group are to be drawn from the BPL list
permitted by the Gram Sabha in which about ten
persons are selected one each from a family and focus
on the skill development training based on the local
requirement.
• Self-help group movement has gathered pace in country
and is directly or indirectly supporting towards the
monetary development of countryside areas.
5
Self help group mechanism

6
• Self help group as a “self-governed, peer controlled
information group of people with similar socio-
economic background and having a desire to jointly
perform common purpose."
• According to The Tamil Nadu Corporation for
Development of Women Ltd. (TNCDW), “self help group
is a small economically homogenous affinity group of
rural poor, voluntarily formed to save and contribute to
a common fund to be lent to its members as per group
decision and for working together for social and
economic uplift of their family and community".
7
Mission of SHGs
Mission: of self help group:

• To promote saving amongst the poor women of country.

• To help the poor realise their entrepreneurial and business


management skills through training and access to capital.

8
• Major objective of SHG is to augment the economic
development of women and create supportive environment
for their social transformation in the lift of gender
discrimination in work and the household.

• Other purpose of the self help group is to build the


functional capacity of the poor and the marginalized in the
field of employment and income generating activities.

9
Economic Objectives
• To promote saving and teach financial management skills.
• To improve access to saving and credit services.
• To improve living standards.
• To reduce vulnerability to poverty in times of crisis
(sickness, death etc)
• To further economic self-reliance.

10
Social Objectives
• To encourage community coherence.
• To offer a forum for the sharing of ideas and knowledge.
• To provide support for members in difficulty.
• To help the community in identifying and resolving their
own problems.

11
Self help group are small and economically homogenous
resemblance groups of rural poor, they voluntarily join to
accomplish the following task.

• To save small amount of money regularly.


• To mutually agree to contribute a common fund.
• To fulfil their emergency requirements.
• To have joint decision making.
• To solve clashes through collective leadership mutual
discussion.
• To provide security free loan with terms decided by the group
at the market driven rates.
• 12
• Self help groups have also amalgamated into big
organizations.
• Typically, about 15 to 50 SHGs make up a Cluster /
voluntary organization with either one or two
representatives from each SHG.
• Depending on geography, several clusters come
together to establish an apex body or an SHG
Federation.
13
14
Features of SHGs
• Perfect self help group comprises 15-20 members
• All the members should belong to the same socio-economic
strata of society specifically poor.
• Group should have strong bond of sympathy.
• Rotational leadership should be encouraged for allocation of
power and to provide leadership opportunities to all the
members.
• Members should attend meetings, save and participate in all
activities voluntarily.
• Aim must be to provide gainful employment and to involve the
poor in productive activities.
15
• Self help group should be socially feasible institution.
• The procedure of decision-making in Self help group should be
self-governing in nature.
• It should be non-partisan in nature.
• The group frame rules and regulations which are necessary for its
effective functioning.
• Self help group must involve women in decision making and to
promote leadership qualities among them.
• It promotes objectives like economic improvement and raising
resources for development and freedom from exploitation.
• The form of such a group could be mostly on an informal basis.
16
Self help group is formed to meet the requirement of
people which are as under:
• To mobilize the resources of the individual members for
their collective economic development.
• To uplift the living conditions of the poor.
• To create a habit of savings, utilization of local resources.
• To mobilize individual skills for group's interest.
• To create awareness about right.
• To assist the members financial requirement at the time
of necessity.
17
Entrepreneurship development
• To identify problems, analysing and finding solutions in the groups.
• To act as a media for socio-economic development of village.
• To develop linkage with institution of NGOs.
• To organize training for skill development.
• To help in recovery of loans.
• To gain mutual understanding, develop trust and self-confidence.
• To build up teamwork.
• To develop leadership qualities.
• To use it as an effective delivery channel for rural credit

18
Five Ps of SHGs
• Thus the SHGs function on the principle of the five 'p's.

• Propagator of voluntarism
• Practitioner of mutual help
• Provider of timely emergency loan
• Promoter of thrift and savings
• Purveyor of credit

19
20
Self help groups and Rural Development
• raising the level of income and standard of living of rural
people
• investment in human capital through training and capacity
building measures
• From dairy to mechanised farming, weaving, poultry, food
processing units, and mushroom cultivation etc
• use collective knowledge and peer pressure to use of funds.
• common cause.
• without depending on external help.
21
Self help groups: Effects and Outcome
• self-employment
• integrating the low income segments with rest of the rural
community.
• offering plenty of jobs and improving the quality of rural life towards
self-reliance.
• industrial skills in all the rural development activities.

22
Self help group is an effective tool to women
empowerment
• Empowerment by way of participation in Self-help group
can bring desirable changes and augmentation in the living
conditions of women in poor and developing nations.

• Through self-help group, large group of women (10 - 20),


with common objectives participate in the development
activities such as saving, credit and income generation
thereby ensuring economic independence.
23
• Self-help group phenomenon definitely brings group
consciousness among women, sense of belongingness and
adequate self-confidence.

• Self-respect and fulfilment in life expands and augments the


quality of status of women as participants, decision makers
and beneficiaries in the self-governing economic social and
cultural spheres of life.
• It can be said that Self-help group is an effectual tool to
empower women socially and economically which finally
contributes in the all-round development of the country.

24
• With the central and state Governments, along with
the National Bank for Agriculture and Rural
Development (NABARD), extending the required
support for women SHGs as a strategy for women
empowerment, the SHGs has taken firm roots in India.
• The movement is eventually expected to reduce
gender inequalities in the country.

25
• Important policy initiatives initiated in this regard
include: promotion of groups under the
Development of Women and Children in Rural
Areas (DWACRA) Programme and adoption of the
model of South Asia Poverty Alleviation
Programme (SAPAP).
• The SAPAP is assisted by United Nations
Development Programme (UNDP) as a response to
the Dhaka declaration of the SAARC summit on
‘Eradication of Poverty and Reduction of Gender
Inequalities’. 26
Case of Kurukshetra
• https://www.clearias.com/self-help-groups-india/

27
Kerala and Maharashtra
• https://www.drishtiias.com/to-the-points/Paper2/self-help-groups-
shgs

28
Case of Nagaland
• http://www.iosrjournals.org/iosr-
jhss/papers/Vol.%2022%20Issue7/Version-5/D2207052731.pdf

29
Rural Development in India- Role of SHGs
• http://ijaret.com/wp-
content/themes/felicity/issues/vol5issue3/mahadev.pdf

30
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