History of Self-Help Groups

Self-Help Group or in-short SHG is now a well-known concept. It is now almost two decade old. It is reported that the SHGs have a role in hastening country’s economic development. SHGs have now evolved as a movement. Mainly, members of the SHGs are women. Consequently, participation of women in the country’s economic development is increasing. They also play an important role in elevating the economic status of their families. This has led boost to the process of women’s empowerment. We can trace the origin of the concept of SHGs in Bangladesh.

SHG is a group formed by the community women, which has specific number of members like 15 or 20. In such a group the poorest women would come together for emergency, disaster, social reasons, economic support to each other  have ease of conversation, social interaction and economic interactions.

Historical background

Indian Scenario

India has adopted the Bangladesh’s model in a modified form. To alleviate the poverty and to empower the women, the micro-finance has emerged as a powerful instrument in the new economy. With availability of micro-finance, self-help groups (SHGs) and credit management groups have also started in India. And thus the movement of SHG has spread out in India.

In India, banks are the predominant agency for delivery of micro-credit. In 1970, Ilaben Bhat, founder member of ‘SEWA’ (Self Employed Women’s Association) in Ahmadabad, had developed a concept of ‘women and micro-finance’. The Annapurna Mahila Mandal’ in Maharashtra and ‘Working Women’s Forum’ in Tamilnadu and many National Bank for Agriculture and Rural Development (NABARD)-sponsored groups have followed the path laid down by ‘SEWA’. ‘SEWA’ is a trade union of poor, self-employed women workers.

In 1991-92 NABARD started promoting self-help groups on a large scale. And it was the real take-off point for the ‘SHG movement’. In 1993, the Reserve Bank of India also allowed SHGs to open saving accounts in banks. Facility of availing bank services was a major boost to the movement.

The movement of SHG was nourished in nourished in the states of Gujarat, Maharashtra, Andhra Pradesh, Rajasthan, Tamilnadu and Kerala. Now nearly 560 banks like NABARD, Bank of Maharashtra, State Bank of India, Cooperative Banks, Regional rural banks, the Government institutions like Maharashtra Arthik Vikas Mahamandal (MAVIM), District Rural Development Agency (DRDA), Municipal corporations and more than 3,024 NGOs are collectively and actively involved in the promotion of SHG movement.

SHG model in India

In India three different models of linkage of SHGs to the financial institutions have emerged. They are Banks, themselves, form and finance the SHGs. SHGs are Formed by NGOs and other agencies but financed by banks. Banks finance SHGs with NGOs and other agencies as financial intermediaries.

The second model is the most popular model. Almost three-fourths of all the SHGs come under this model. Only 20% of the SHGs are covered under the first and 8% under the third model respectively.

The SHG Movement in Maharashtra

The concept of SHG was not new to Maharashtra. Beginning with a tiny amount of Only 25 paise, the women of Maharashtra from Amaravati District had established one SHG long back in 1947.

Further in 1988, ‘Chaitanya’ Gramin Mahila Bal Yuvak Sanstha started promoting SHGs in Pune District, informally.In Southern part of India, ‘SADHAN’, ‘DHAN’ foundation and ‘ASA’ worked to promote SHGs. But their thrust was on economic aspects only. Whereas in Maharashtra, the NGOs not only have catered to the economic needs of the participants, but also involved in the process of social development. Aim of ‘Chaitanya’ is also the same to empower the women in both ways, economically and socially. Presently, numerous NGOs and governmental institutions promote SHGs on a large scale.