Question

explain about d role of SHGs?

Answer 1

A Self-Help Group (SHG) is a village-based financial intermediary usually composed of 10-20 local women. Most self-help groups are located in India, though SHGs can also be found in other countries, especially in South Asia and Southeast Asia.

Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the members or to others in the village for any purpose. In India, many SHGs are ‘linked’ to banks for the delivery of micro-credit. Micro-credit in common parlance refers to small loans that help the poor women to meet their immediate credit needs.

A major rethinking on the existing strategies of rural development in general and women empowerment, in particular, led to the realisation that a new approach is needed to ‘help the women to help themselves’. Such an approach, particularly known as promotion of Self-Help Group (SHG) formation, was stated with the objective of meeting the micro-credit needs of the poor women.

A Self-Help Group may be registered or unregistered. It typically comprises a group of micro-entrepreneurs having homogenous social and economic backgrounds, all voluntarily coming together to save regular small sums of money, mutually agreeing to contribute to a common fund and to meet their emergency needs on the basis of mutual help. They pool their resources to become financially stable, taking loans from the money collected by that group and by making everybody in that group self- employed.