Self Help Groups




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(SHGs) and Civil Society in India

The (SHG) initiative was adopted by India several decades ago in order to alleviate poverty, and improve women’s ability to achieve rights and well-being. At the beginning, SHG was an initiative undertook by NGOs, but later on, due to its success in improving live standards and delivering public goods and services, Indian State engaged in facilitating access to financial resources

SHGs and financial empowerment

Financial empowerment is enabling access to or delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups. Despite encouraging policies and having a wide network of rural banking in India, which implemented specific poverty alleviation programmes though Bank credit, a very large number of poorest of the poor continued to remain outside from the field of formal Banking system. Self help groups programme are intended to reach poor segments of society as they lack access to financial services. Fisher-Sriram (2002) points out that, formal financial sector unsuccessful to recognize the divergence between the hierarchies of credit needs and credit availability.

The Government of India initiatives during seventies and fourth five year plan (1969-74) document focused on small and marginal farmers and agricultural labourers. And now Elevenths fiver year plan (2007-12) not only focused but emphasis and define the importance of financial inclusion for inclusive growth. The major objectives of the eleventh plan are income, generation, poverty alleviation, financial inclusion, education etc. Reserve Bank of India (RBI) issued guidelines for total financial inclusion and credit requirement of self help groups. Member as envisaged in the paragraph 93 of the union budget 2008-09 where in it was stated as under ‘banks will be encouraged to embrance the concept of total financial inclusion’.

Poverty alleviation

Self help groups programme proved that it is an effective tool for poverty alleviation programme. HGs which poor need for their basic requirement is not available in the formal credit system. In these circumstances, HGsservices not only fulfill their productive needs but also satisfy their consumption needs. Overall HGs can help low income people to reduce risk, improve financial activities, raise productivity, increase their income and improve the quality of their lives and empower them for economic growth in India.  SHGs Programmes have become a popular mechanism for poverty alleviation, financial inclusion in many developing countries including India.

Women empowerment

Empowerment of woman is a crucial factor in the eradication of poverty, as the woman are the key contribution to the economic at all levels woman participation combating poverty though both remunerative and un-remunerative work at home and the work place the formation of self help groups has provided a lot of confidence among members of self help groups. A large member of woman in the country is gaining self- reliance with the help of self-help groups. In India, self-help groups represent a unique approach to financial inclusion. Self help groupsMicrofinance activities helps the poor, women is not just obtaining loans but also inculcating in them habits of savings, credit and investing in micro insurance and money transfer services. Members of self help groups participate and improving access to micro credit management, marketing skills, and capacity building to promote financial inclusion, and empowerment.

Role of civil societies in india

Governance is the process by which a society manages itself through the mechanism of the state. The core ingredients of good governance are:  People’s effective participation, transparency, responsiveness, consensus orientation, equity and inclusiveness, the rule of law, effectiveness and efficiency, accountability, and strategic vision.

Governance has three levels:

(A) Internal systems and procedures;

(B) cutting edge systems and procedures; and

(C) check-and-balance systems

At level (A), civil society can influence policy and project formulation through membership of committees, submission of memoranda directly or through elected representatives, and interactive rule-making in the implementation of policies, projects and schemes affecting citizens. The maximum day-to-day interaction between the government and the citizens takes place and the popular image of governance is formed at level (B).  Interactions of civil society with level (C), infrequent but important, will be more of an exposure of irregularities rather than steps for improvement in the quality of governance.

Civil society’s functional contribution to good governance could be:  

  • Watchdog — against violation of human rights and governing deficiencies.  
  • Advocate — of the weaker sections’ point of view.  
  • Agitator — on behalf of aggrieved citizens.  
  • Educator — of citizens on their rights, entitlements and responsibilities and the government about the pulse of the people.  
  • Service provider — to areas and people not reached by official efforts or as government’s agent.  
  • Mobiliser — of public opinion for or against a programme or policy.

Civil society acts through ‘social capital’— the capacity of people to act together willingly in their common long-term interest. Social capital is strong in a homogeneous, egalitarian society.  

Civil society as a whole is, therefore, unable to play its full potential role in enforcing good governance in India except when extraordinary leadership overcomes narrow loyalties, or when an issue is of common, major concern to all sections (like natural calamities). Smaller units of governance and decentralisation of governance are, therefore, indispensable in India.

Individuals cannot take on the huge political-bureaucratic machine that the government is, nor can the entire civil society act on behalf of every citizen. Civil society, therefore, has to operate through compact, focused organisations based on strong social capital.


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