Page 83 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes 6.2 Self-Help Groups

Self-Help Group (SHG) is a group of 12 to 20 women of the same socio-economic background
who come forward voluntarily to work together for their own upliftment. The unique feature of
the SHG is its ability to inculcate among its members sound habits of thrift, savings and banking
Regular savings, periodic meetings, compulsory attendance, and systematic training are the
salient features of the SHG concept. Each group selects one animator and two representatives
from among themselves. The animator is responsible for providing leadership to the group and
to maintain the various registers. The representatives assist the animator and maintain the bank
accounts of the group.
SHG is a small group of rural poor, who have voluntarily come forward to form a group for
improvement of the social and economic status of the members.

(a) It can be formal (registered) or informal (unregistered).
(b) The concept underlines the principle of Thrift, Credit and Self Help.
(c) Members of SHG agree to save regularly and contribute to a common fund.
(d) The members agree to use this common fund and such other funds (like grants and loans
from banks), which they may receive as a group, to give small loans to needy members as
per the decision of the group.

6.2.1 Need for SHGs

The rural poor are incapacitated due to various reasons. Most of them are socially backward,
illiterate, with low motivation and poor economic base. Individually, a poor is not only weak in
socio-economic term but also lacks access to the knowledge and information, which are the
most important components of today’s development process. However, in a group, they are
empowered to overcome many of these weaknesses. Hence, there is need for SHGs, which in
specific terms are as under:
1. To mobilize the resources of the individual members for their collective economic
development.
2. To uplift the living conditions of the poor in rural areas.
3. To create a habit of savings among the poor from their little earnings.
4. Utilization of local resources which are idle through members.

5. To mobilize individual skills for group’s interest.
6. To create awareness about the rights and duties and make people conscious for the same.
7. To assist the members financially at the time of need and make them free from the clutch
of greedy money lenders.
8. To develop Entrepreneurship competencies by utilizing the inherent talent and skill.
9. To identify problems, encountered by the members and finding solutions for feasible
implementation of the same.
10. To act as a media for socio-economic development of the village.
11. To develop linkages with institutions of NGOs for financial and non-financial assistance
and support.
12. To organize training for skill development to generate entrepreneurial ability.

78 LOVELY PROFESSIONAL UNIVERSITY