Exam Time Synopsis:
| What are SHGs? | The informal group of 10-20 individuals, grouped voluntarily to promote a common interest. |
| Historical Background- | Began in 1985 with MYRADA. Then in 1992, NABARD started promoting it through SHG Bank Linkage Programme. |
| Characteristics- | Homogenous background, common interest, active existence for at least last 6 months, savings and credit operations, maintains records, democratic working |
| Principles- | Mutual trust, group approach, the spirit of thrift, demand-based lending, collateral-free, poor friendly lending, skill training, capacity building, empowerment, peer pressure for repayment. |
| Formation- | Begin without any external support, member contributions, lending from this small sum, after 6 months of proper and efficient functioning eligible for bank finances |
| Objective- | Saving and banking habits, financial and technical strength, economic prosperity, women empowerment, availing loans, capacity building, community development |
| Benefits- | Social integrity, women empowerment, pressure groups, voice to marginalized sections, financial inclusion, easy access to government schemes, changes in consumption patterns, banking literacy, saving and financial decision making, access to credit, employment, participation in local government, decision making within the household, self-confidence among members, change in household violence, community participation. |
| Opportunities- | Rural poverty alleviation, economic empowerment, resources utilization, community development initiatives, leadership skill development, cultural advancement, promoting rural arts, rural culture revival. |
| Challenges- | Dependence on government and NGOs, lack of knowledge and training, patriarchal mindset and social stigma, diversion of money, regional disparities, sustainability, rural banking, lack of supporting infrastructure, lacks security. |
| Government response- | SHG-Bank Linkage Programme, Swarna Jayanti Swarojgar Yojana, NRLM, Deendayal Antyodaya Yojana, MUDRA loan. |
| Recent Development- | Covid-19 compacting through masks production, sanitizers and PPE kit productions, Sanitary Pad ‘Asmita Plus’ in Maharashtra, Disposable carry bags to replace plastic bags, promotion of One District-One Product scheme |
| Way forward- | Government as facilitator and promoter, reducing regional disparities, expansion of financial infrastructure, an extension of SHGs to urban areas, monitoring and reporting, need-based approach. |
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