Role of Self Help Groups (SHGs) in poverty alleviation

Empowerment through "Self Help"

Empowerment through “Self Help”

Self Help Groups (SHGs) evolved through the Grameen Bank model in Bangladesh in the late 1970s. Self Help Group, as the name suggests, was an idea which aimed at women empowerment through “Self Help”. The SHG model focuses on inter-loaning and group savings generally among rural women to increase financial independence and as a measure for poverty alleviation.

There has been a mixed response as far as the success of the SHG model in India is considered. Experienced Social workers feel that the credit linkage schemes run by large banks are the reason for the failure of many of the groups. Banks have set up specialized cells which deal with SHG loans and credits. These cells have annual targets of loan disbursal, and the managers to fulfill their targets generally push loans on to SHGs. Newly created SHGs generally agree to the loans and are seen as defaulting on their loans.

It was envisaged that SHGs would empower women folk by bringing them together and enabling the creation of multiple rural micro-enterprises. The initial few months/years are used as capacity building for the women to work in groups as this is the most challenging aspect of a formation of a SHG. Behavior change, as we know, is the most difficult outcomes to achieve in a development sector programme. Once the women are acquainted with working in groups, and the group dynamics are somewhat stable, then they are taken to the next level of developing a business plan, or are trained in specific trades which act as the foundation for setting up an enterprise.

Many organizations in India have been extensively working in the field of women empowerment through SHGs. The most common observation from these organizations has been that once the women reach the stage of financial stability, they become more confident and aware of their rights. When they become aware, they demand, this demand has seen many a changes in the rural areas of the country wherever SHG model has been a success.

The Self Help Group model for poverty alleviation has been a success wherever it was implemented in a manner as it was envisaged in the beginning, and has been a failure with many lessons wherever it was implemented with an agenda to only alleviate poverty from a region.

By -Vipin Vijayan

Sr. Prog. Manager




2 thoughts on “Role of Self Help Groups (SHGs) in poverty alleviation

  1. Excellent & Motivating Article For An NGO Like Ours , Committed To Bring About A Radical Change & Transformation Into The Livelihood Based Financial Status Of The Marginalized Families,Through The Creation And Incubation Of The Females Belonging To These Families ,As SHGs Operated GLOBALIZED COTTAGE INDUSTRIES,In Chhattisgarh,India…


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