Self help groups (SHGs) are small groups of 10-15 people, typically women, typically from similar socio economic and religious backgrounds, who are come together and meet on a weekly/bi-weekly basis to resolve problems in their lives. Through the SHG, the collective of women undertake activities of savings and borrowing and build skills for their enterprises. There are primarily three actors in the organisation of an SHG, the members of the SHG, the bank disbursing the credit and the NGO that mobilizes the SHG and facilitates the disbursal. Currently, approximately 8.7 Million SHGs have an outstanding loan balance of Rs. 755 Billion and hold deposits of Rs. 195 Billion*.
SHGs are crucial to the eradication of poverty and the empowerment of women. They are principally support groups for women to share their problems and develop skills to effectively utilize the credit they are able to mobilize.
Pradan or Professional Assistance for Development Action, has mobilized over 46,416 SHGs, 90 federations and USD 6.4 Million in credit. The Pradan team at Southern Rajasthan was kind enough to allow the Ladee Foundation to study its well functioning and defunct SHGs to understand what makes some SHGs and JLGs successful and what causes some of them to become defunct. Through this study, the Ladee Foundation intends to list out best practises and develop solutions to help SHGs and JLGs regroup and thereby enable greater access to credit.
*Nabard Report on the Status of Microfinance in India-2017-18.