Women SHGs in India
[A Rural View]


N. Kavitha
MBA, M.PhiL, (Ph.D)
Lecturer-MBA Department
SSM College of Engineering
Komarapalayam-638 183, Namakkal-Dist.
Dr. A. Ramachandran
M.com., M.Phil, Grad CWA, Ph.D
Reader in Commerce
SNR Sons College


It has been realized in many parts of the world that an effective way to tackle poverty and to enable communities to improve the quality of life is through social mobilization of disadvantaged people, especially into Self Help Groups (SHGs). The concept of Self Help Groups is based on the idea of community participation, as sustainable community development requires the active participation of the entire community. 'Popular participation ensures that the benefits of development are equitably distributed. To further this, proposals are made for the decentralization of the authority so as to ensure redistribution of wealth, improved access to education and other social services. Consequently the focus of self-help groups is to develop the capacity of the disadvantaged, particularly women, and to organize them, so that they can deal with socio-political and socio-economic issues that affect their lives.

Self Help Groups have been formed in almost all the villages adopted in the three districts of Uttarkashi, Tehri & Jaunsar. The women have been mobilized to form small groups for savings & credit for improving the economic conditions of the individual women. Inter-loaning for meeting their day-to-day needs has increased their confidence in themselves. Micro-capital assistance has raised their hopes for starting small enterprises for generating more money thus improving their overall economic condition. Apart from IGA the groups have been instrumental in tackling the village issues such as water problem and negotiating with the pradhan for getting the drinking water scheme for the village. The women's collective strength has improved the Public Distribution System as far as dry ration is concerned or the functioning of Anganwari or Balwari's activities are concerned. Claming the Scholarships for the school students from the Pradhan or getting the old age scheme/widow pension scheme for the beneficiaries activated are some of the activities taken on by the SHG's. Anti-liquor movement has strongly taken on in all the three regions initiated by the women in these SHG's. Trainings received in Health & Hygiene thus improvement in the intermediary service such as first-aid and cleanliness campaign resulting in cleaner villages has been because of the efforts of the SHG group women.

Self-Help Groups

The primary focus of self-help groups is to provide emotional and practical support and an exchange of information. Such groups use participatory processes to provide opportunities for people to share knowledge, common experiences, and problems. Through their participation, members help themselves and others by gaining knowledge and information, and by obtaining and providing emotional and practical support. These groups have been particularly useful in helping people with chronic health conditions and physical and mental disabilities. Traumatic life events such as death and divorce are also the basis for groups. Self-help groups are voluntary, and they are mostly led by members. Generally, groups meet on a regular basis, are open to new members, and do not cost money to join. Traditionally, self-help groups have been in-person meetings, but recently Internet self-help groups have become popular.

self-help group, nonprofessional organization formed by people with a common problem or situation, for the purpose of pooling resources, gathering information, and offering mutual support, services, or care.

The group should maintain simple basic records such as Minutes book, Attendance register, Loan ledger, General ledger, Cash book, Bank passbook and individual passbooks. The sample proforma for maintenance of above records by the group is in the Annexure II for guidance. These could be used with necessary changes/ modifications wherever required.

Team Development:

  • A survey is made to get the number of helpless women from each family in a particular village.
  • Next step is to make aware of this team to the rest of the villages
  • Illiterates of the village are also made aware of this team
  • A team consist f 12 women and remembers from one team are restricted to join other teams.
  • Ladies from families poor in income, education , job and assets are only eligible to be the member of this self helping group
  • If this team is success in their job they are free to introduce one more teams

Eligibility for membership:

  • Belonging to poor family
  • Residing in same village
  • The teams in mainly meant fro unmarried women but those women abandoned by their husbands can also be included.
  • The age limit for women is between 16-60 yrs
  • Annual income for the family should not exceed above Rs12000 per year.
  • First preference is given to handicapped, widows and women abandoned by husbands.

Points to be noted in developing the teams:

  • Team should not be farmed with making false offerings of loans
  • Only one person from each family can be included in teams.

Team administration:

  • Two representatives are to be selected from each teams for mere guiding purpose. Every members are equal. They are elected to continue for 2 years.
  • Initial expenses of the team for 3 years would be undertaken by government and later they have to manage with their profit.
  • A proper financial records of the team has to be kept and maintained by the member of the team and if they are illiterate some other ladies can be kept after being paid, but not any gents.
  • They have to maintain a joint account in the name of their team in any of the banks.
  • The main of this project is that they develop and flourish by making other sub units under them and taking up its administration all by themselves.

Duties of representatives:

  • As the representatives they have to guide their team members and motivate them to participate actively in the programmes initiated by the team.
  • The representative should take care that all the members opinions are taken or given consideration during their meetings.
  • They have to keep a proper record of all the programmes done and planned by the team. They also have to check the accounts and other records are kept by the team regularly.
  • The representatives should take part in the meetings held in the district and state level. They should convey to team members about the new ideas discussed and adopted there.
  • They are to act as the intermediate between the teams and other external bodies like government, bank & etc.
  • They have to make sure that all the team members have learnt to drive two wheelers and all the team members attend the village meetings held once in 3 months

Issue of Loans:

  • The team starts issuing the loan after 3 months and its upto the team members about fixing the interest rate, repayment, maximum loan and etc.
  • The repayment of installment amount depends upon the loan taken i.e higher the loan, higher the repayment amount. During initial period small loans are issued so that they can be repaid completely within 6 months.
  • The team also issues loan for the medical expenses, education expenses, business investment or any other emergency expenses of the members.
  • They have to maintain certain crucial records such as:
    • o To whom has the team issued?
      o How much to issue?
      o When to repay?
      o Their interest rate etc.

  • The teams can issue loans only to the team members and they have to maintain proper record of the cash repaid by the members and have to give them the correct receipts regularly.


 Training are given to the team members for 2 day, Once in a month and for the representatives its  once in 45 days members are to teach the other members of the teachings to other members too. During the training, they are taught how to record and maintain accounts does and doesn't of the group activities, Social work, etc. all the members are to compulsorily attend the training and would be granted the T.A / D.A for the purpose by the team

  • The training timing is from morning 10.00 am to evening 5.00pm and all the members are to be in the training camps at sharp time or else they would have to pay the fine.
  • Training date and camp place has to be fixed according to the conveience of the team members to achieve 100% attendance.
  • The team members have to discuss about the teachings in the meeting held, immediately after the training.

Sl. No.

Nature of Training


Catering, Motor winding


Tailoring,catering, fashion, driving


Computer,Electrician ,Fitter


Computer,Tailoring, Driving


Tailoring,Rexine leather, Paper plate


Tailoring,Rexine leather, Paper plate


Tailoring,Beautician,Rexine, Coir making


Tailoring,Beautician, Rexine, Coir making




Tailoring,Man.of Bags,tailoring,Baking,Beautician




Candle, appalam, seaweed /Crab culture, Book binding, Horticulture, Coir making, Herbal Products, Palm products & Masonry


Appalam, Jam, seaweed /Crab culture, Vermi culture




Lather products




Terracotta,Greeting card, Ready made,Home appliance




Screen Print,Home App,Note making, Table mat making






Computer,Tailoring, Toys


Computer,Tailoring, Toys






Computer,Coir, Fisheries,Honey


Computer,Coir, Seashore sippies, Panai


Servise Kiask, Lather products, Backery, Napkin, wiring,seaweed /Crab culture, Coir making, Herbal Products, Palm products & Masonry, Fishnet, Tailering, Hollow Block, Tiles, Photography

Sustainability of micro finance self help groups in India: would federating help?

The major form of microfinance in India is that based on women's Self Help Groups (SHGs), which are small groups of 10-20 members. These groups collect savings from their members and provide loans to them. However, unlike most accumulating savings and credit associations (ASCAs) found in several countries, these groups also obtain loans from banks and on-lend them to their members. By 2003, over 700,000 groups had obtained over Rs.20 billion (US$425 million) in loans from banks benefiting more than 10 million people. Delinquencies on these loans are reported to be less than 5 percent. Savings in these groups is estimated to be at least Rs.8billion (US$170 million). Despite these considerable achievements, sustainability of the SHGs has been suspect because several essential services required by the SHGs are provided free or at a significantly subsidized cost by organizations that have developed these groups. A few promoter organizations have, however, developed federations of SHGs that provide these services and others that SHG members need, but which SHGs cannot feasibly provide. Using a case study approach, Nair explores the merits and constraints of federating. Three SHG federations that provide a wide range of services are studied. The findings suggest that federations could help SHGs become institutionally and financially sustainable because they provide the economies of scale that reduce transaction costs and make the provision of these services viable. But their sustainability is constrained by several factors-both internal, related to the federations themselves, and external, related to the other stakeholders


"The self-help group model has been identified as a potential pathway to alleviating poverty. The number of poor women and men who are enrolling in SHGs all over rural India has been increasing remarkably. They are not only active in thrift and credit management but are also taking up other activities, such as natural resource management and development work, literacy, knowledge management, nutritional security etc. SHGs lay the foundation for self- reliance through building up of institutions, which have the capacity to generate employment opportunities for the rural poor, and the poorest, and lead to job-led economic growth."

N. Kavitha
MBA, M.PhiL, (Ph.D)
Lecturer-MBA Department
SSM College of Engineering
Komarapalayam-638 183, Namakkal-Dist.
Dr. A. Ramachandran
M.com., M.Phil, Grad CWA, Ph.D
Reader in Commerce
SNR Sons College


Source: E-mail April 11, 2007


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