Women

The National Bank for Agriculture and Rural Development (NABARD) defines SHGs as economically homogeneous and affinity groups which work for social and economic empowerment of people in a way of democratic functioning. In India, there are approximately 69 million women members of around 6.3 million Self Help Groups (SHGs) formed under the Ministry of Rural Development’s Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM).

Promoting The Growth Of Rural Women

1. SHGs push employment generation as it promotes savings and making credit linkage with credit institutions to perform income-generating opportunities. This is the first step in the economic self-reliance of women.
2. Economic empowerment equips women with autonomy and decision making, therefore increased agency within their families. It also reduces physical, economic violence against women within households.
3. SHGs also act as hubs for skill development of women which therefore builds human capital. For example, NABARD’s Micro-Enterprise Development Programme provides need-based skill development to SHG members. Skill development increases income-generating capabilities of women.
4. SHGs have not only economically empowered women but also take up their cause at different levels. One of them is combating violence against women; for example, Self Help groups in Madhya Pradesh form Shaurya Dals (courage brigades) to combat VAW.

How SHGs Boost Socio-economic Growth In Rural Areas

1. SHGs further also promote rural economic growth through capacity building, value addition and convergence of schemes. For example, through the Van Dhan Kalyan Yojana, SHGs play a central role in marketing tribal products and enabling sustainable livelihood sources for them.
2. SHG loans have the potential to facilitate and boost investment or spending. They also provide a safety net to improve resilience during a critical time of need.
3. SHGs also play a critical role in the agricultural value chain. They can be equipped to strengthen and reinforce the supply chains, in turn increasing farmer income. For example, Budget 2020 provided for Women SHG led Village storage scheme to enable storage facilities and restore women’s role as Dhaanya Lakshmi.
4. Further, Self-help groups by bringing together traditionally disempowered women, provide a voice to the voiceless.
5. It helps build social capital and therefore social cohesion and harmony.
6. It also helps develop local leadership, as seen for example in the case of Kudumbashree members in Kerala. Kudumbashree members have been at the forefront of local development in Kerala, whether it is post-flood response and rehabilitation or response during the Covid pandemic.
7. SHGs also work to promote human development and fill developmental gaps where government reach has been limited. For example members of SHGs in Tamil Nadu to be trained as mental health workers under Manam Inidhu Scheme to bridge the mental health gap in the region.
8. Beyond the financial scope of SHGs’ outreach, an equally essential dimension to the groups’ importance is the psycho-sociological support that is shared amongst the group members. For instance, in the 2014 Ebola Virus Disease outbreak, the members’ social cohesion was reinforced within the Village Savings and Loan Associations (VSLA) or SHG and the network at large. The group promoted harmony and solidarity amongst VSLA members.

However, SHGs Also Suffer From Multiple Limitations Like

1. Financial independence and self-sustaining economic models are not a normalised fact with reference to SHGs. They are often mired by economic mismanagement and irregularities.
2. Further, successful SHGs often become victims of political capture, they suffer from politicisation and serve local political interests rather than the interests of poor members.
3. This in turn adds to the fact that SHGs have been unable to serve the poorest of the poor, those at the bottom of the ladder and most excluded from the economy.
4. Lastly, SHGs suffer from a systemic crisis of low awareness, information flow and capacity building. They are often reduced to randomly formed informal groups without adequate knowledge or organisational structures.

SHGS Must Be Empowered By Making Concrete Interventions

1. Swift operationalisation of Social Stock exchange: allowing social enterprises to list themselves on the exchange and raise capital.
2. Bridging implementation deficits of the SHG Bank Linkage programme.
3. SHG fairs for mission mode efforts at credit linkage for SHGs.
4. Efforts must be made to improve its participatory character and address shortcomings, all in the spirit of enabling shared prosperity.

SHGs have proven to be unique stakeholders during the pandemic crisis. There is an urgent need for economic reconstruction in the post-lockdown period. SHG loans have the potential to facilitate and boost investment or spending. They also provide a safety net to improve resilience during a critical time of need. Such loans enable women to avoid high-interest rates and harsh conditions placed on borrowers by banks. It has been observed that women SHGs have a gross NPA ratio of 4.5 percent, much lower than the industry average. Therefore, it is necessary to keep the SHGs solvent and recapitalise them so that they have adequate liquidity to lend and play their vital role in the recovery process.