Self Help Groups in India: A Study of the Lights and Shades

This study assesses the social role of Self Help Groups (SHGs) in India, their outreach and sustainability.SHGs combine access to low-cost financial services with self-management and development for their members. They are formed and supported by NGOs or government agencies, and are linked to banks and wider development programs. Conferring both economic and social benefits on members, SHGs help members grow their savings and access bank credit. They also serve as community platforms for women to become active in village affairs. The study was undertaken in four states of India, namely, Andhra Pradesh, Karnataka, Orissa and Rajasthan. It examined data from district administration officers, government programs, the National Bank of Agriculture and Rural Development (NABARD), local banks, NGOs, SHG members, non-members and dropouts. Although most stakeholders view SHGs as financially sound instruments and worry about the social and political implications, this study indicates that there are lights and shades on both sides. There are more social lights beginning to appear and more financial shades. Progress on either will require greater clarity of vision and a systematic approach to building capacity and providing guidance.