Self-help groups (SHGs) are groups of 10-20 local women or men that come together for financial services. SHGs are very common in India and other parts of Asia. There are different models for how SHGs are linked to financial institutions in India, with the most popular being where NGOs help form SHGs that are then financed by banks. SHGs aim to organize and empower women, promote savings, and improve socioeconomic status by providing access to loans and resources. One example is an SHG in India called READ that formed over 1300 groups covering two districts to help over 60,000 impoverished women gain financial independence through collective savings and small loans.

1. SELF HELP GROUPS IN INDIA
BY
D.MANIMALA
K.JAYASRI
Introduction
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.
What is a Self Help Group?
A self-help group (SHG) is a village-based financial intermediary usually composed of 10–20
local women or men. Most self-help groups are located in India, though SHGs can also be found
in other countries, especially in South Asia and Southeast Asia.
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.
Why SHGs?
To Organize Women
Enhance Participation Level
To inculcate saving habits
Suitable Platform for women
Enhance capacities of Women
Successful base
Objectives of SHGs
To create an appropriate & sensitive forum for addressing the need of people
To inculcate saving habits in the community
To generate the sense of collective action
To improve socio-economic status
To access the outside resources
The history of the self-help group READ:
 In 1997, READ was the first organization in its area to introduce the concept of women
self-help groups, and 5 women self-help groups were formed in Andimadam Block of
Ariyalur District (in the villages of Periyakrishnapuram, Thanjavooranchavai, Vilandai,
Vilandai Colony and Keelnaduvai).

2.  Since then, the program has expanded a lot. With financial support from the Mahalir
Thittam project of the Tamilnadu Corporation for the Development of Women Ltd.,
(TNCDW), The Council for Advancement of People`s Action and Rural Technology
(CAPART) and Sahaya International, READ has currently organized more than 1300
groups, each with 10-15 members. READ's SHG program currently covers three blocks
in two districts (Ariyalur and Cuddalore district). To operate these programs, READ has
extablished four branch offices (Andimadam, Sendurai, Variyangkaval and
Srimushunam)
The READ staffs gave basic training to each of the Self-Help Groups on a variety of topics:
 Rules and regulations of SHG
 Animators training
 Accounts training
 Leadership development Training
 Capacity building training
 Entrepreneurs Training
 Self employment Training
 Self Help Group
Self Help Group in Ariyalur District organized and managed by READ
The need for Self-Help Group:
 More than 60,000 women spread in 2 Blocks of Ariyalur District belong to the
‘Below poverty line’ category (ie. their annual income is less than Rs. 24000
(=$500)). These women are from different caste groups such as Scheduled Caste
(SC), Scheduled Tribes (ST), most backward Caste (MBC) backward caste (BC) and
minority groups (Muslims).
 Most of them are illiterates/semi-literates. Only 15 percent of this population own
economic assets, such as weaving looms, cows and goats, or a petty shop business.
 If they need money, they cannot go to a bank to get a loan, so often their only choice
is to get a loan from a local money-lender, who usually charges outrages interest rates
(sometimes more than 100%!).
 Often such debts cannot be paid off in time, and the individual or the family gets in
deeper poverty, and sometimes leads to suicide.

3.  The situation is especially poor for women, because they have often little or no
economic status, and especially when their husband is working elsewhere, they have
to face severe financial hardship.
 Occupation-wise they are landless laborers, agricultural laborers, construction
workers, weavers and contract weavers and daily wage labor (coolie workers). The
job availability in the agricultural sectors is roughly for 3-4 months a year and the rest
of the period they travel usually to nearby areas for coolie work. They try to support
their families with their little income.
Motive
This can lead to a strong and permanent improvement of their socio-economic
Conditions in a number of ways:
 Initiation of savings and credit activities and promotion of income generating
programs in these self-help groups will bring more economic development and
independence to these women and their families.
 For the first time in their life, these disadvantaged rural women and men become
organized into groups. The formation of these self-help groups will facilitate
discussion of many issues pertaining to their socio-economic, educational and health
status.
 This process will also lead to increased confidence and social status, especially for
women, in their communities. This will encourage these women to participate and
contribute in general social and political matters in their respective villages, including
women's rights.
Advantages of SHGs
 Initiative
 Responsibility
 Ownership
 Capacity Building
 Self confidence $ self esteem
 Mutual help
 Access to larger pool of resources
 Channel of functioning
Case story of self-help group member
Before Kolanchiammal got involved with a self-help group, her family suffered a lot from
money lenders and it was very difficult for her to maintain her family. She came to know
about the importance of Self Help Groups and made herself a member in the Vanavil Self-
help Group which is being looked after by READ. After getting a loan from READ, she
bought four goats and takes care of them well. Now she is having a habit of saving the
amount for future use. Thus the total family benefited from this. One of the goats has yielded
two offspring.
CONCLUSION
Now women in INDIA do not have to approach money lenders, as they can get credit at a
low rate of interest that they could never get before from other banks or credit institutions.
The main outcome is they have gained confidence—they have vision for their future, which
results in planning for their future. Women are respected by their families and communities
and have become financial advisers. ”Now we have started thinking about ourselves and
giving importance to us!” women have said.