Self-Help Groups (SHGs) have been a significant tool in empowering women across India. These groups aim to enhance the economic and livelihood security of women, particularly in rural areas. The concept of SHGs was initiated by organizations like the Self Employed Women’s Association (SEWA) and has since evolved to become a strategic intervention for financial inclusion and socio-economic development.

Significance

Economic Empowerment
• Income and Savings: Membership in SHGs has led to increased income and savings among women. Members often participate in small businesses, agricultural activities, and other income-generating ventures, which significantly improve their financial status.

• Loans and Credit Access: SHGs provide access to credit, allowing women to take loans for various purposes, including business investments and personal needs. This reduces their dependency on traditional moneylenders who often charge exorbitant interest rates.

Social and Political Empowerment
• Decision-Making: Women in SHGs report enhanced participation in household and community decision-making processes. Their involvement in SHGs boosts their confidence and leadership skills, enabling them to voice their opinions and take on leadership roles within their communities.

• Public Speaking and Awareness: SHG members gain confidence in public speaking and participate more actively in community meetings and local governance. Increased awareness about health, education, and legal rights is also observed.

Health and Education
• Health Awareness: SHGs play a crucial role in spreading health awareness among women, leading to better health practices and access to healthcare facilities. Programs often include training on nutrition, sanitation, and disease prevention.

• Educational Attainment: Membership in SHGs encourages educational pursuits among women and their children. Many SHGs emphasize the importance of education, resulting in higher enrollment rates in schools and literacy programs.

Social Status and Mobility
• Social Recognition: Women in SHGs often gain social recognition and respect in their communities. Their involvement in economic activities and community service elevates their social status.

• Reduced Vulnerability: Participation in SHGs reduces the vulnerability of women to social evils such as domestic violence and gender discrimination. Empowered women are more likely to resist such issues and seek support when needed.

Challenges and Areas for Improvement

1. Sustainability of SHGs: Ensuring the long-term sustainability of SHGs remains a challenge. Continuous training and support are essential for maintaining the momentum and effectiveness of these groups.

2. Financial Inclusion: While SHGs provide access to credit, there is a need for more comprehensive financial inclusion measures, such as linking SHGs with formal banking institutions for better financial products and services.

3. Skill Development: Enhancing the skill set of SHG members through targeted training programs can lead to better economic outcomes. Focus areas include advanced agricultural techniques, business management, and digital literacy.

4. Market Linkages: Improving market access for products made by SHG members can significantly boost their income. Establishing better supply chain networks and facilitating direct market linkages are critical steps.

Models of SHGs

SHG-Bank Linkage Model

The Self Help Group-Bank Linkage Programme (SBLP) was started in 1992 at the initiative of NABARD. The basic idea of the SBLP is to link the unorganized sector of our population to the formal banking sector.

SHG-Corporate Model

• They have played a major role in promoting women empowerment through SHG. For eg. ITC,Hindustan Unilever Limited, Amul, Tata Group, ICICI Bank, etc.
• ICICI Bank, India''s largest private sector bank, recently crossed a milestone of supportingone million women beneficiaries through its programme for Self Help Groups (SHG) whichaims at empowering less privileged women to become self-reliant.

SHG NGO Model

• The NGO regularly conducts skills training programs for SHGs to encourage leadership abilities and income-generating activities. These types of training carry SHGs, for their creation and work, close to NGOs.
• Technical expertise, skills training, and marketing strategies offer to women to help develop a sustainable business.

Shortcomings of SHGs:

1] Mostly engaged in Agricultural Activities:  SHGs in rural areas should be introduced to non-agricultural businesses too and should be provided with state-of-the art machinery.

2] Credit Mobilization: A study has shown that about 48% of the members had to borrow from local money lenders, relatives and neighbors because they were getting inadequate loans from groups. In the absence of any documentary proof, this class of people do not have access to organized financial services.

3] Self-Help Groups are Developed in Rural Area only.

4] Poor Infrastructure: Most of these SHGs are situated in rural and far-reaching areas that lack connectivity via road or railways. Access to electricity remains an issue.

5] Politicization: Political affiliation and interference has become a serious problem with SHGs. Political affiliation is also a major reason for group conflicts.

6] Lack of Technology: Most of the SHGs work with rudimentary or no technology.

7] Access to market: Also the goods produced by SHGs do not have access to larger market places.

Success Story

Kudumbashree in Kerala:

• It was launched in Kerala in 1998 to wipe out absolute poverty through community action.
• It is the largest women empowering project in the country. It has three components i.e., microcredit, entrepreneurship and empowerment.
• Kudumbashree training courses are also quite comprehensive, and include women’s rights knowledge of constitutional and legal provisions training in banking practices training in skills to set up micro-enterprises.
• It has thus made a huge contribution in socially empowering the women of Kerala.

2. Other famous SHGs: Lijjat papad from Maharashtra; Mahila Arthik Vikas Mahamandal (MAVIM) in Maharashtra, “BHAI BHAUNI, Odisha; Social Saheli - Uttar Pradesh, etc. 

Measures Taken by the Government to Promote the SHGs:

1] On the recommendations of SK Kalia Committee, the SHG-Bank linkage programme was started at the initiative of NABARD in 1992 to link the unorganized sector with the formal banking sector.

2] Banks were allowed to open savings accounts for Self-Help Groups (SHGs). Banks provided loans to the SHGs. 

3] GOI has included SHG as a priority sector lending group to mandate and enhance banks focus on them. 

4] SHG, have been allowed to run grain banks to secure food security in food & care regions.

5] Priyadarshini scheme: With NABARD as the nodal agency, it has aimed at women empowerment and livelihood enhancement through SHGs.

6] Mahila Kisan Sashaktikaran Pariyojana: In order to promote agro-ecological practices that increase women farmers’ income and reduce their input costs and risks, the DAY-NRLM Mission has been implementing the Mahila Kisan Sashaktikaran Pariyojana (MKSP).As of March 2018, more than 33 lakh women farmers were being supported under this scheme.

Suggestions to Improve the Working of SHGs: 

1] Simplify the process of giving loans - ease the access to credit.

2] An integrated approach is required for meeting the backward linkages with technology and forward linkages with processing and marketing organizations.

3] The delivery system has to be proactive and should respond to the financial needs of the farmers.

4] Training programmes relating to management of finances, maintaining accounts, production and marketing activities etc. should be given.

5] Provide gender sensitization training to bank staff so that they are sensitized to the needs of rural clients especially women.

6] Adequate insurance coverage should be provided to the business units promoted by SHG against the financial losses to safeguard the interest of the entrepreneurs.

SHGs have had a profound impact on the socio-economic status of women in India, providing them with opportunities to improve their financial standing, gain social recognition, and participate actively in community life. Despite challenges, the positive outcomes of SHGs underscore their importance as a development strategy for empowering women and promoting inclusive growth.