1 What is a Self-Help Group ? Self-Help Group (SHG) is a small voluntary association of poor people, preferably from the same socio-economic background. They come together for the purpose of solving their common problems through self-help and mutual help. The SHG promotes small savings among its members. The savings are kept with a bank. This common fund is in the name of the SHG. Usually, the number of members in one SHG does not exceed twenty. 2 What are the objectives of Self-Help Groups ? The SHGs comprise very poor people who do not have access to formal financial institutions. They act as the forum for the members to provide space and support to each other. It also enables the members to learn to cooperate and work in a group environment. The SHGs provide savings mechanism, which suits the needs of the members. It also provides a cost effective delivery mechanism for small credit to its members. The SHGs significantly contribute to the empowerment of poor women. 3 Who helps in the formation of SHGs ? Non Governmental Organizations (NGOs) Social Workers, health workers, village level workers, etc Informal Associations of local people Development oriented government departments, Banks, Bank personnel, Mahila Mandals, Yuvak Mandals, Facilitators, other individuals (in their personal capacities) Farmers Clubs under the Vikas Volunteer Vahini ( VVV ) Programme of NABARD and Other development institutions. 4 Should SHG members comprise only poor people? The SHG-bank linkage programme is targeted to reach the poorest sections, which are bypassed by the formal banking system. Therefore, it is essential that only the very poor be considered as the target group for the SHG -bank linkage programme. 5 Should the SHG comprise only women members? An SHG can be all-women group, all-men group, or even a mixed Group. However, it has been the experience that womens groups perform better in all the important activities of SHGs. Mixed group is not preferred in many of the places, due to the presence of conflicting interests. 6 What is the importance of training in the success of SHG strategy? Training can contribute significantly to the success of the SHG bank linkage programme. Appropriate training (formal or informal) at each stage of SHGs growth is one of the essential inputs required. 7 What are the types of training programmes that would be necessary in promoting SHGs? Training is essential for all partner agencies who participate in the SHG bank linking programme. The details regarding the different types of training needs, organisational facilities, modules,etc are presented in Section 4 - Capacity Building of Partner Institutions in microFinance. 8 What could be considered as indicators of a good SHG? Homogeneous membership As far as possible, the membership of an SHG may comprise people from comparable socio-economic background. Though difficult to define in clear terms, a major indicator of homogeneity in membership is absence of conflicting interests among members. No discrimination There should not be any discrimination among members based on caste, religion or political affiliations. Small membership Ideally, the group size may be between 15 and 20, so that the members are participative in all activities of the SHG. In a smaller group, members get opportunity to speak openly and freely. However, the membership may not be too small that its financial transactions turn out to be insignificant. . Regular Attendance Total participation in regular group meetings lends strength to the effectiveness of SHGs. To achieve this, the SHGs should place strong emphasis on regular attendance in the group meetings. Transparency in functioning It is important that all financial and non-financial transactions are transparent in an SHG. This promotes trust, mutual faith and confidence among its members. Maintenance of books of accounts as also other records like the minutes book, attendance register, etc., are important. Set of Byelaws The SHG may discuss and finalise a set of byelaws, indicating rules and regulations for the SHGs functioning and also roles and responsibilities of members. It is better to have a written set of byelaws. The Self Help Promoting Institution (SHPI) and bank may guide the SHGs in this. Thrift The habit of thrift (small savings) is fundamental to the SHG and helps in building up a strong common fund. Utilising savings for loaning Once an SHG has accumulated sizeable amount in the form of savings say for a period of about 3-6 months, the members may be allowed to avail loans against their savings for emergent consumption and supplementary income generating credit needs.
Posted on: Wed, 12 Nov 2014 16:15:50 +0000
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