IAS Economy Practice Question . 17

What are the features of Self Help Groups in India:
1. They are made up of homogenous social and economic backgrounds
2. They are voluntary in participation
3. They are registered as a society in India
Choose the correct option:
[A]Only 1
[B]1 & 2
[C]2 & 3
[D]1, 2 & 3


Answer: 1 & 2
A self-help group is for the people, of the people and by the people, who save and contribute to a common fund which is used to lend to the members. SHG primarily comprises members with homogenous social and economic backgrounds. It is a voluntarily formed group consisting of women, rural laborers, small farmers and micro-enterprises. The concept
is akin to the concept of democracy. SHGs are formed by the members, for the members and of the members. The number of members could be as less as five and could even go up to 20. They save and contribute to a common fund which is used to lend to the members. Since they know each other, members do not seek collateral from each other. An SHG is seen as an instrument for achieving a variety of goals, including empowering women. Data from Nabard, which pioneered the concept, shows that90% of members in the SHG are women and most of them do not have any assets. It also helps in developing leadership abilities among the poor, increasing school enrolments, improving nutrition and in birth control. An SHG is generally started by non-profit organizations, such as an NGO with broad anti-poverty agendas. It is also a popular channel of micro-lending by commercial banks, particularly government-run banks.

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