Why Do People Not Join or Drop Out of SHGs?

This study examines reasons for women not joining or dropping out from SHGs in Andhra Pradesh, India. It provides recommendations to financial service providers to address the issues and concerns of clients by devising appropriate solutions. Several eligible families do not join the SHG movement and a considerable number of SHG members dropout from the SHG movement. The study revealed a variety of reasons for not joining SHGs, including:

• Villagers were not approached by staff of SHG promoting institutions;
• Newly-wed women did not have the documentation to open bank accounts or were prohibited from joining an SHG by their husband or his family;
• Others were not able join any SHG because they were not aware of the process to do so;
• Existing SHG members often did not allow others to join their groups for fear of spreading the benefits of membership too thin.

Reasons that drive dropout from SHGs included migration for work or marriage, poor bookkeeping, and finding the group meetings and rules inconvenient. The study concludes by suggesting how government, banks, and SHG promoting organizations can address these challenges.