Self Help Groups in India:

GS II

      Context:

·      The National Rural Livelihood Mission (NRLM), which aims to increase each woman’s yearly income in self-help groups (SHGs) to Rs 1 lakh by 2024, has already been given priority by the government, but it is also actively encouraging entrepreneurship and economies of scale among them. Not only that, but it also wants to support its efforts at handholding by making loans easier and facilitating access to markets rather than relying on a grant-based economy.

·      Introduction:

·      The idea of women’s empowerment has evolved over the past few decades from a welfare to an equity approach, where the weak take charge of their lives and resources to overcome internal obstacles like self-awareness and confidence while also overcoming external obstacles like poor health, mobility, education, and awareness. In this approach, the socioeconomic development of any society undergoing transformation now requires the empowerment of women.

·      The process of empowering disadvantaged people involves giving them access to fundamental opportunities, either directly by the marginalised individuals themselves or with the assistance of others who are not marginalised but share their access. Empowering women entails utilising their strength by highlighting their enormous potential and motivating them to strive for a respectable and fulfilling way of life through competence and self-assurance.

·      For the country to thrive, women must be given more influence. The development of women entrepreneurs is extremely relevant and important in India, because the population maintains an equal gender distribution. Otherwise, it would be equivalent to ignoring 50% of the entrepreneurial talent in the nation. For this reason, self-help groups stand for a distinctive method of financial intermediation. Self-help groups are a fresh and creative organisational setup for the welfare and uplift of women in India.

·      History of the Self-Help Groups in India:

·      Self-help groups can be traced back to Mohamed Yunus’ founding of the Grameen Bank in Bangladesh.

·      In 1975, SGHs were established and started.

·      NABARD was started in India in 1986–1987.

·      SHGs were created as a result of the lack of institutional financing available in rural areas.

·      Self-help organisations have developed as an idea to organise the rural poor in order to meet their consumption and production needs using their savings. Modified versions of the Bangladeshi model have been adopted by India. to help the poor and give women more influence. In the new economy, microfinance has become a potent tool. In India, SHGs and credit management groups have also begun as a result of the availability of microfinance. As a result, the SHG movement has grown throughout India. Nabard began heavily pushing self-help groups in 1991–1992. And it served as the SHGs movement’s actual launchpad. The Reserve Bank of India also permitted SHGs to open savings accounts in banks in 1993, which gave the movement a significant boost.

·      Swarn Jayanti Gram Swarozgar Yojana (SGSY), launched by the Indian government in 1999, aims to encourage rural residents to work for themselves by forming and empowering SHGs. In 2011, the initiative transformed into a national movement known as the National Rural Livelihoods Mission (NRLM), the largest programme in the world to combat poverty. In existence today are State Rural Livelihood Missions (SRLMs) in 29 states and 5 UTs (except Delhi and Chandigarh). The NRLM assisted the poor’s access to affordable, trustworthy financial services such bank accounts, savings accounts, credit, insurance, remittances, pensions, and financial services counselling.

·      Self-help Groups (SHGs): What Are They?

·      Self-help Groups (SHGs) are voluntary, self-managed associations of low-income women from related socioeconomic backgrounds who pool their savings into a pool from which small loans are made to the members to cover productive and urgent needs. This model was developed in the 1980s and 1990s with the help of the Indian government, state governments, National Bank of Agriculture and Rural Development (NABARD), the banking industry, and non-governmental organisations. It has since spread throughout the entire nation, but especially in rural areas where 70 percent of India’s 1.2 billion people live in poverty, lack access to financial resources, and have poor health and limited access to social services.

·      The goals of SHGs

·      The SHGs provide a substantial contribution to poor people’s empowerment.

·      To educate locals on the importance of SHGs and their role in the empowerment process.

·      To foster a sense of community among participants.

·      To boost members’ capacities and confidence.

·      To encourage group decision-making among the participants.

·      To promote the members’ saving habits and make it easier for them to build up their own capital resource base.

·      To inspire participants to take on societal obligations, especially those pertaining to development.

·      SHGs are necessary for rural development.

·      India has a sizable rural poor population, and the lack of access to credit and financial services is the cause of this poverty.

·      They assist the underprivileged, particularly women, in obtaining loans. Women are empowered by this and are given more societal voice.

·      Self-employment provides several positive externalities, including higher levels of literacy, greater access to healthcare, and even better family planning.