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Poverty has many dimensions and stems from several factors – economic, social and cultural. Although lack of opportunities for livelihood and denial of opportunities are largely seen as major casual factors for poverty, they are aggravated in the Indian context by lack of access to timely and affordable credit. In India, the informal financing systems have been the predominant source of credit for rural poor and in many cases have perpetuated the poverty cycle. Currently, the approaches to address poverty are being increasingly focused enhancing the access to affordable credit to the groups formed at the grass root level.


Self-help group by their very name suggest the strength of the collective. The key purpose of SHG is to bring together people especially the women and rural poor, to form small groups of 11 to 25-30 members, be a source of strength to the members. High level of dependence of the rural poor and households in the lower asset groups for credit on non-institutional sources with exuberant interest rates continues till date. Self-help groups are designed to address the problem of exploitation by moneylenders, limited accessibility of credit and limited source of income other than agriculture.
The objective of SHG formation is to:  

  • Groom the groups to be cohesive and participative.
  • Enable the members to pool their savings regularly.
  • Empower the women to participate in society and be a participant in sustainable development
  • Motivate members to make interest bearing small loans to one another.
  • Reach Microfinance services to the poor, through an organized and systematic use of homogeneous groups as base level units.


Initiated as an entry point activity within the Integrated Watershed Development Program, SHGs have grown from strength to strength and are the bedrock for other development programs in the rural areas. Members of SHGs are key drivers of development.
The process involved in the formation of SHGs includes:

  • Creating awareness about SHGs and their benefits
  • Formation of Self Help Group by formally adopting a MOA.
  • Facilitating the process of linkage of self help groups with banks
  • Capacity and knowledge building of the group members (training in account keeping, leadership, knowledge about bank loans, lending and savings)
  • Knowledge of various ways to generate income
  • Helping them to enhance  income and include social empowerment activities
  • Formation of clusters/ federation of self help groups at Taluka /block level
  • Active involvement of the federation in the key development programs of the block/ taluka.

Key activities of self-help groups includes organising regular meetings, savings and credit, discussion on social and development concerns and income generation( IG) activities
Some IG activities started by SHGs are (includes the ones supported by the Rural Entrepreneur Development Program (REDP)

  • Animal Husbandry, Dairy and related activities
  • Establishment of general stores
  • Shuttering work
  • Cycle repairing
  • Tent house
  • Catering services
  • Honey Production
  • Paper Plate Production
  • Paper Envelope Production
  • Incense sticks production

A self help group federation “Dwarkesh” has been formed at the block/taluka Level in the Mithapur area. The federation has been formed with the objective to address the social and economic development issues at the regional level. The federation comprises of around 160 SHGs members that are grouped into four clusters.
At Babrala, Sevarthi cluster, an apex body of thirteen SHGs has been formed with the purpose to sustain the SHGs by building their capacity and linking them with government bodies.  The cluster aims to provide an effective dynamic path for inducing competitiveness by ensuring inter- firm cooperation through networking and trust. It looks at holistic development including marketing and skill up gradation. Annual General Meeting of Sevarthi Cluster is conducted once a year where audit findings of thirteen SHGs members are shared.


In TCSRD’s area of intervention, 365 groups have been formed having approximately 5000 members Total saving with these group is Rs. 117.71 lakhs approx and Rs.183 lakhs of loan have been sourced from banks.   
There is clear empirical evidence of impact of Self Help Groups in the lives of the poor. The intervention has made significant change in the behavior to save, and on the other hand the SHGs have been able to mobilize a considerable quantum of credit with repeated support from formal financing institutions. The findings reveal that the SHGs have broken the age old myths of ‘poor cannot save and they are not bankable’.
Financing through SHGs has resulted in improvement in asset status and increase in family income. Contextual influence on change in the family income while extending services through SHGs is also conspicuous. Availability of multiple opportunities and better exposure greatly complement the microfinance services and spur the development processes. There has been a substantial decline in the debt burden of the poor families with unscrupulous moneylenders due to the services of SHGs.

Empowerment of women is another distinct impact and the some of the findings shows that organizing the women through SHGs and their networks has paved an excellent platform to improve leadership skills and self confidence of women from poor communities. In a nutshell potential of SHGs in organizing poor and addressing development issues is quite evident. But it should be understood that it is just an entry point and these women organizations have to go long way in achieving overall development taking up multiple development agenda and should evolve into civic institutions. Women members linked to SHGs have marked their presence in the community in the face of male domination and the general inhibition. They are now united to look beyond every day realities.

The beginning has been small yet incisive. The small steps have soon turned into big strides and have transformed the way the group is looked at by others.

Way Forward:

The way forward is to continue the process of getting more people into the “self-help group” process. TCSRD would continue to:

  • Provide follow-up support and facilitate linkage for restoring/ rehabilitating their economic livelihood.
  • Initiate more economic activities in clusters like milk collection, bhadhani and block printing etc.
  • Build their capacity so that they become independent and are able to run the federation on their own without any support.
  • Strengthening the federation so that it could start with some economic viable projects befitting its members, develop micro-finance systems and provide loans to the prospective entrepreneurs.
  • Impart more training programs to the group in order to build up their knowledge as well as their capacity.
  • To create a sustainable, scalable, replicable model of income enhancement through formation of SHGs.
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