• UGI USER
  • Jul 25, 2023
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Q. While various government initiatives and policies have created opportunities for Self Help Groups (SHGs), there are challenges that still persist. Discuss.

Approach:

  • Briefly define Self Help Groups (SHGs).
  • Mention opportunities created by government initiatives and policies in this context.
  • Explain the challenges, which still persist in this regard.
  • Conclude on the basis of above points.

Answer:

Self Help Groups are voluntary associations of people with common interests formed to achieve collective social and economic goals. Such groups are organized for mutual help and benefit. It is formed democratically without any political affiliations.

Initiatives taken by government, which have created opportunities for SHGs include:

  • Self Help Group- Bank Linkage Program (SHG-BLP):

It is the world’s largest micro-finance project introduced by the Ministry of Finance through NABARD in 1992 to empower rural and specially women SHGs.

  • Deen Dayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM):

Formation and skilling of SHGs was first promoted through SGSY. This program evolved into DAY-NRLM and is presently one of the largest poverty alleviation programs around the world by the Ministry of

  • Digitalization of SHGS- ‘EShakti’:

The project aims to bring SHG members under the fold of financial inclusion thereby helping them access a wider range of financial services together with increasing the bankers’ comfort in credit appraisal.

  • Women SHG Development Fund:

With a corpus of Rs 500 crore, NABARD provides grants to women SHGs and funds their training and capacity building initiatives.

  • Saras Collection Initiative:

Under this, rural SHGs can display their products on the Government e-MarketPlace (GeM) portal for the government buyers. Other than that, almost all the states and UTs are running their State Rural Livelihood Mission, which includes support towards SHGs. However, following challenges still exist:

  • Problems in marketing:

Most SHGs face issues related to lack of adequate sales promotion measures, lack of permanent marker for their products, absence of proper brand name, etc.

  • Problem of infrastructure:

Due to lack of infrastructures like roads and railways, cold storage, vending zones, SEZ, regulated markets and krushak Bazar etc., the output which is produced, is not brought to the market.

  • Lack of skills:

Many of the activities undertaken by the SHGs are still based on primitive skills related mostly to primary sector enterprises. With poor value addition per worker and prevalence of subsistence level wages, such activities often do not lead to any substantial increase in the income of group members.

  • Problem of facilitators’ support:

Because of illiteracy and ignorance, many of them do not know how to get bank loans, maintain records, cash books and ledger.

  • Lack of stability and unity among SHGS:

Stability issue arises as many married women have to shift their place of residence. Further, male counterparts in taking loans, distracterized won are found to be influenced by their loans and subsidies.

  • Corruption:

It is reported by the members that there is corruption at the selection procedure of SHG, sanction of loan and provision of subsidy.

In a nutshell, SHGs have potential to boost rural production and consumption. Other than resolving the persistent challenges, there would be an imperative need for their economic revival and reconstruction in the post-pandemic times.