This document discusses the history and development of self-help groups (SHGs) in India. It notes that SHGs first emerged in the 1970s to provide microfinance and empower women. Major organizations like NABARD, MYRADA, and SEWA promoted SHG models. By the 1990s, NABARD began large-scale promotion of SHGs and banks started allowing SHG savings accounts. SHGs are now widespread across India, with millions of members, providing financial services and livelihood support to rural communities while empowering women. The most common model involves NGOs forming SHGs that are then linked to banks for credit.

1. Presented By-
Rekha Tiwari

3.  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.
 ‘Working Women’s Forum’ in Tamilnadu.
 Since 1987 ‘Mysore Resettlement and Development Agency’
(MYRADA) has promoted Credit Management Groups (CMGs).
CMGs are similar to self-help groups.
 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.

4. Why SHGs….?
 More than 27% of rural population lives below
poverty line.
 Most of them have no access to banking system.
 Formal credit system not able to reach unreached.
 Gender issues needed to be addressed.

6. SHG’s Group (SHG) is a
A Self-Help
registered or unregistered
group of micro entrepreneurs
having homogenous social and
economic
backgrounds, voluntarily
coming together to save
regular small sums of
money, equally agreeing to
contribute to a common fund
and to meet their emergency
needs on the basis of joint
help.

7. BASIC FEATURES OF SHG
 Small- homogenous group of 10-20 peoples.
 Registered or unregistered.
 Has a code of conduct rules and regulations for
effective administration.
 Maintenance of simple books.
 Participatory Decision making Process.
 Mobilises Local Resources through regular savings.
 Plans own Programme with own Resources.

8. PRINCIPLES OF SHG
 1. Interaction / Meetings /
Reflection / Analysis and
Action.
 2. Regular Savings.
 3. Trust in one’s self and among
members in the group.
 5. Records.
 6. Access to Funds.
 7. Team management of
Resources.

9. Objective of SHG’s
* Sustainable access to financial services
* Stronger livelihood support systems
* Enhancement of collective bargaining power
* Self reliance and sense of dignity
* Improvement in overall standard of living and
empowerment

10. 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.

11. SHG BANK LINKAGE MODEL
FORMING AND NURTURING
SAVINGS SHG
BANK
CREDIT LINKED TO SAVINGS
MEMBERS
11

12. SHG BANK LINKAGE MODEL
NGO, GO,
Federation FORMING,
of SHGs DEVELOPING
MONITORING
BANK CREDIT LINKED TO SAVINGS
SHG
SAVINGS
MEMBERS
12

13. SHG BANK LINKAGE MODELS
NGO, Federation FORMING,
COMMON of SHGs PROMOTING,
CREDIT MONITORING
CREDIT
SAVINGS
BANK ?
SHG
SAVINGS ?
MEMBERS
13

14. Indian scenario
 India has adopted the Bangladesh’s model in a
modified form.
 To improve the poverty and to empower the women,
the micro-finance has emerged as a powerful
instrument.
 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
increase out in India.

15.  The movement of SHG was nourished in the states of
Gujarat, Maharashtra, Andhra
Pradesh, Rajasthan, Tamilnadu and Kerala.
 Now many banks are provide help 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
 & also 3,024 NGOs are collectively and actively involved in the
promotion of SHG movement.

16. Number of new SHGs financed by banks during
last five years
Chart Title
600,000
5,39,365
500,000
400,000
361,731
300,000
255,882
200,000 197,653
149,050
100,000
0
1 2 3 4 5 6

17. Success
State Nos. in Lakh
 Andhra Pradesh = 48.5
 Tamil Nadu = 12.5
 Uttar Pradesh = 6.6
 Orissa = 4.1
 Maharashtra = 3.9

18. Creating rural infrastructure
through bridge communication
(Meghalaya)

19. BALSRIGITTIM WOMEN’S SELF-HELP GROUP
UNDER SAMANDA DEVELOPMENT BLOCK, EAST GARO
HILLS, MEGHALAYA

20. Advantages of SHGs
1.To the group:
 Access to large resources
 Up gradation in skill and technology
 Exposure
2.To the bank:
 Externalization of work
 Reduction in transaction cost
 Better margin
 Wider coverage
 Larger smaller savings
 Improvement in general credit

23. Conclusion:
If we join our hands together to support
SHGs we will start talking about rural prosperity
instead of rural poverty.
…………..

24. Thanks…………………