‘The Self Help Groups (SHGs)Guiding Principle stresses onorganizing the rural poor intosmall groups through aprocess of social mobilization,training and providing bankcredit and governmentsubsidy’
SHG is a registered or unregistered groupof micro entrepreneurs havinghomogeneous social and economicbackground, voluntarily coming togetherto save small amount regularly, tocontribute a common fund and to meettheir emergency needs on mutual helpbasis. Ten persons are selected, one eachfrom a BPL family to form a group whichis expected to implement following codeof conduct like Assigning name to theSHG, Regular meetings in a Democraticway, Open exchange of thoughts in thesemeetings, Participation in the DecisionMaking process, Bank Account in thename of the SHG and Selecting aPresident and Secretary from the SHG.
The groups’ total fund is to be depositedin the bank account so created. SHGsthat are in existence for about six monthsand have demonstrated the potential of aviable group enters the 3rd stage, whereinit receives a ‘Revolving Fund’from DRDA and Bank as a cash-creditfacility. This money may be utilized forinternal lending among the members. Ifgroup is found to be regular in its internallending and successfully utilizes thisrevolving fund; proposal for bank loanmay be forwarded for sanctioning.
In India, self employment has been recognized as anessential force of development in rural areas. It hasemerged as a strategy designed to improve thesocio-economic life and mainly focuses on extendingthe benefits of development to the poorest in therural areas improving their standard of living and self-realization.
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