“The emergence of the Self-Help Groups (SHGs) in contemporary times points to the slow but steady withdrawal of the State from development activities.”Examine the role of SHGs in development activities and the measures taken by the Government of India to promote SHGs.

A self-help group is a type of financial mediator committee. It consists of a group of about 10 to 20 members, women or men of the age group of 18 to 40 years. Most of the self-help groups are found in India. One person is associated with collecting the money and gives the money to the person who needs it. The members gather money over a few months to store adequate money in the group to start the lending. Many SHGs in India are ‘linked’ to the banks for the delivery of micro-credit.

Development activities

  • Economically poor people gain support as part of a group.
  • It has empowered poor people, especially the women group, in rural areas.
  • It has reduced the influence of informal lenders in rural areas.
  • It helps the borrowers to overcome the problem of lack of collateral and the women can address their problems to find solutions.
  • It promotes gender equality.
  • It ensures social justice by becoming the voice of the needy people and improving the efficiency of various government schemes.
  • It can prevent diseases by providing better nutrition, housing, and health to women and children.


  • The government should introduce SHGs to the credit deficient areas in India.
  • Nationwide extension of SHGs focusing the financially weaker section of urban people.
  • Setting up a regulatory body for smooth functioning.
  • Setting up collaboration with NABARD for an innovative approach to promotion.

Considering the points and taking special care of the issues faced by the SHGs, the overall objective of the organization will definitely be achieved.


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