[Yojana September Summary] SHG-led Women Empowerment – Explained, pointwise

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Gender equality and gender empowerment have been two primary objectives of various government policy measures since the beginning. One of such prominent policy measures is the promotion and economic activation of Self-Help groups (SHGs).

Tangible progress in gender equality and empowerment not only helps proliferate women welfare, but also contributes towards the achievement of the Sustainable Development Goal (SDG)-5 target.

What is a Self-Help Group (SHG)?

SHG is a voluntary association of the economically poor, usually drawn from the same socio-economic background, and who resolve to come together for a common purpose of solving their issues and problems through self-help and community action.

History of SHG-led women empowerment in India

Grameen Bank model: In 1984, for the first time, the concept of social mobilisation and business development through the organising of SHGs was introduced based on Prof. Yunus’s ‘Grameen Bank’ model.

SHGs-Bank linkage programme: Initially, the National Bank for Agriculture and Rural Development (NABARD), along with empanelled Non-Government Organisations (NGOs) designed and developed the SHGs-Bank linkage programme.

Recognition by RBI: In the year 1990, the Reserve Bank of India recognised SHGs as an alternate credit flow model. Thus, there was a paradigm shift in the development of banking in India. Now, SHGs were accepted as group-based clients of banks for both deposit and credit linkages, collateral-free lending, and lending to groups without specification of purpose/ project.

Prof. S. R. Hashim (1997) committee reviewed the poverty alleviation and employment generation programmes of the Ministry of Rural Development, and recommended shifting focus from an individual beneficiary approach to a group-based business development approach. Hence, Integrated Rural Development Programme (IRDP) and its associated schemes were merged and a new scheme called ‘Swamjayanti Gram Swarozgar Yojana’ (SGSY).

SGSY was launched to provide self-employment to below the poverty line households through the formation of SHGs to bring them out of poverty during 1999 to 20II.

Prof. R. Radhakrishna (2009) Committee reviewed the performance of SGSY and suggested changes in its design from a ‘top-down poverty alleviation’ approach to a ‘community-managed livelihood’ approach.

National Rural Livelihood Mission (NRLM): Thus, based on the Prof. Radhakrishna Committee recommendation, SGSY was restructured into National Rural Livelihood Mission (NRLM) by the Ministry of Rural Development to provide a sharper and greater focus as well as momentum for poverty elimination in 2010. Later, the NRLM has been renamed as Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY- NRLM).

How is DAY-NRLM contributing towards SHG-led women empowerment?

DAY- NRLM, is working with twin objectives of

(a) Organizing rural poor women into SHGs: Under this, the focus is on scaling-up and institutionalization of SHGs across various states.

(b) Constant nurturing and assistance to take up economic activities, resulting in a reduction of poverty via gainful self-employment and skilled wage employment opportunities.

Since 2013-14, women SHGs have cumulatively leveraged a credit of Rs. 3.56 lakh crores from banks to take up income-generating activities.

The programme aims to ensure that at least one woman member from each rural poor household (about 9 crores) is brought into women SHGs and their federations within a definite time frame.

What is the institutional structure of SHGs?

The institutional structure of SHGs under DAY-NRLM follow a 3-tier structure –

i).  SHGs at the ward level

ii). Village Organisations (VOs) at the village level

iii). Cluster Level Federations (CLFs) at the cluster/ block level

Institutional Structure of SHGs

What are the ten principles of the SHG movement?

The SHG movement follows five principles or ‘Panchasutra’ viz.

i). Regular Meetings ii). Regular Savings iii). Regular Inter Loaning iv). Timely Repayment of Loans v). Up-to-date books of Accounts.

In addition, five additional principles now followed by SHGs are

vi). Health, Nutrition, and Sanitation vii). Education viii). Active involvement in Panchayati Raj Institutions (PRIs) ix). Access to Entitlements and Schemes x). Creating Opportunities for Sustainable Livelihoods.

These taken together are called – ‘Dashasutras‘ under DAY-NRLM.

What are the four pillars of SHG-led women empowerment?

Women entrepreneurship development at the community level relies on how socio-economically empowered they are. The empowerment of women in collectives like SHGs stands on four strong pillars of:

i). Social mobilisation

ii). Universal financial inclusion

iii). Livelihoods capable of dealing with vulnerabilities like debt, food security and health crisis

iv). Social inclusion

What are the issues and challenges?

Lack of conceptual clarity on the legal framework of the federations, deviations in the perceived role and forms of CLFs.

Low competency of CLF board members in managing business activities

Lack of appropriate training plans, quality training materials, and availability of expert training institutions have impacted SHGs’ capacity-building initiatives.

Lack of uniform financial management systems at all tiers of SHGs has impacted growth in the bank accounts, improvement in the financial literacy, and absorption capacity of community financial members.

What needs to be done?

The need is to have a proper evaluation of proposed economic ventures under women-led SHGs and a rigorous analysis of the financial and physical viability of the occupation along with exploration of innovative business pathways.

We need to implement steps for attracting and retaining skilled and trained management staff/ human resources at VO and CLF levels.

Assessments by expert agencies, timely training and capacity building of SHGs, their leaders, their community resource persons, and service providers can sensitize and orient stakeholders, including Panchayati Raj Institutions on the potential of SHGs in the community empowerment with business growth.

There’s also a need to focus on both demand and supply sides of financial inclusion, promote financial literacy and provide capital support, set up linkages with financial institutions, and promote business correspondence and community facilitators/Bank Mitra to ensure universal coverage of micro-insurance services.

We need to improve the capacities of women in farm and non-farm activities to access public and market institutions and schemes. This would transform rural unemployed youths into self-employed entrepreneurs.

Way forward

The community business entities owned and operated by women SHGs can ensure jobs and opportunities. They can do so by effectively utilizing available local resources and transforming them into profitable products as per the local need and the acceptability of consumers.

Hence, the SHG-led village entrepreneurship model based on the DAY-NRLM can truly usher in women empowerment in India.

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