Promotion of Self Help Groups Under the SHG Bank Linkage Programme in India

This paper examines the different ways in which Self Help Promotion Institutions (SHPIs) in India promote Self Help Groups (SHGs). It has two main objectives:

• To determine ways of enhancing the efficiency and quality of the SHG poromotion process;
• To identify means of improving the extent and level of financial services to people who do not have access to formal financial services.

The ideal SHPIs should have the following features:

• It should promte SHGs at at low cost in a short time;
• The SHGs promoted should include the poor and its benefits should be equatibly distributed. They should be durable, sustainable, able to keep good records and member friendly.

Some of the recommendations from the study are:

• Banks, particularly co-operatives, should support, and eventually be replaced by, initiatives of SHG members;
• Extent and quality of member-promoted SHGs should be monitored;
• A regular national SHG sample survey should be put in place, to enable SHG quality monitoring;
• Non-management bank staff should be encouraged to promote SHG;
• Training should include hands-on SHG record keeping and SHG promotion. Training should emphasize on the importance of access versus the cost of finance.