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Hey wife! I am knowledgeable and you are also knowledgeable. If I am Samved then you are Rigved.

-Atharva Ved 14.2.71

Money is the seed of money, and the first guinea is sometimes more difficult to acquire than the second million.

Jean-Jacques Rousseau

Sitting in matching peacock green Paithani saris with gold trim, about ten women are seated inside a small room counting coins after a day’s brisk sales. Women here have been active in Self Help Groups (SHGs) for close to a decade or more, and in this time their participation has extended far beyond the collective savings and loans, that are the most basic elements of microfinance schemes. Bowing my head, I said hello: “Namaskar” Faces lit up. In unison, the women responded “Namaskar” meaning “fine.”   One or two began talking to me in Marathi, Any small effort to communicate on my part elicited gracious appreciation. This was a meeting of a women group which is part of a financial chain of a philosophy called microfinance and it is its primary unit. These units are known as Self Help Groups.

In India the most popular model for empowering village women through financial access and provision of other services is the Self Help Group mechanism. It is in practice for more than two decades and has   transformed the lives of millions of women, several of whom now occupy important positions in village administration. A typical Indian SHG consists of 10-20 poor women from similar socio-economic backgrounds who meet once a month to pool savings and discuss issues of mutual importance. Group members are engaged in livelihood activities such as running a retail shop, cattle rearing, zari work, tailoring jobs, making candles, artificial jeweler. The women cross guarantee each other’s debts. Their collective strength is used as social collateral to avail loans from financial institutions. The undefined code of   consists of informal rules based on the collective wisdom of the group and the traditional norms of proper conduct and behaviour that have become intrinsic values symbolising a particular standard of ethics and morality. The natural process of growth enables the group to evolve its own rules and regulations.

SHGs also have important social functions: they may serve as a platform to address community issues such as the abuse of women, alcohol, the dowry system, educational quality, inadequate infrastructure, etc. What’s most significant about  these groups  is that they are designed to be wholly managed by villagers themselves; by and large, they function as they are intended to function; and they reach impoverished people in remote rural areas who would otherwise go without any financial services, even microfinance. All the money stays with the group, so there’s no question about extracting money off the backs of the poor to run institutions — or to enrich investors — as we’ve seen with some of the worst cases in microfinance .

One of the practices encouraged through SHGs is transparency and accountability. Accountability is often thought of in its vertical relationship, as something citizens seek from power-holders. But this project focuses on developing a sense of accountability within women to themselves and as well as their community. First, accountability is learned. In intensive initial trainings, community resource people (women who are seasoned, successful members of the self-help groups themselves) train new members about the importance of working together to achieve common goals. The day to day management of the group rests on five foundational principles: weekly meetings, weekly savings, internal lending, regular loan repayments, and healthy book keeping) serve as the foundation of the day-to-day management of the groups. Through consistent adherence to these practices, the women reinforce practices that meet the needs of the poorest members as well as strengthen their accountability to each other. In turn, iterative adherence to these principles instills a sense of financial discipline as well as empowerment of the members to make decisions over their own resources .. Women go through a succession of personal changes, where attitudes within the groups are transformed to finding that activity done by a group is empowering, labour saving and more profitable than individual attempts. Confidence in handling cash, opening bank accounts, assessing the loan repayment capacity of women and informal mechanisms by which group accounts were maintained helped create bonds among women that empowered them both individually and collectively.  .


The self-help group is an appropriate people’s institution that provides the poor with the space and support necessary for taking effective steps towards greater control of their lives in private and in society. The group interaction equips women with necessary skills for participating in forums which involve higher levels of awareness and which address themselves to problems of wider implication. The group provides them with an area for training and, through interaction, helps them in articulating their aspirations that could be voiced in wider forums. It is a path towards their empowerment and the ultimate enhancement of their social and economic status. In fact, multilateral development banks, financial institutions and transactional banks are making SHGs their primary focus in their micro-credit programmes.

The SHGs have become constellations, with an interconnected planetary economy: each SHG member has also become part of the interdependent nervous system of the SHG so that if a member suffers on any count, every member of the group feels the jolt. In terms of lending, as more and more SHG members go through multiple loan cycles, it is likely that a need will arise among clients for larger loan sizes to meet various needs, from expanding a business to home repairs, which fellow group members may be unwilling to guarantee. In this case, as the limit of the group guarantee is reached, women can take individual loan on the strength of their credit history the group in the bank in which the group is maintaining its account.

What we need today are innovative solutions that can take into account the peculiarities of the people at the bottom of the pyramid. Societies that invest in sectors affecting women are on a virtuous cycle .Safe, reliable energy could mean that businesses would be better able to thrive, the quality of education for girls and boys would improve and health clinics would provide better care. All of this could boost economic and social development. For all interventions, the fundamental logic is plain: if we are going to end extreme poverty, we need to start with girls and women.

We need to use your natural powers-of persistence, concentration, insight, and sensitivity to do work, think deeply, and solve problems. Social innovation is taking place at multiple levels, driven by passion to make a difference. But as with most trumpeted development initiatives the present programmes are also struggling to   turn rhetoric into tangible success. A lot of good programs got their start when one individual looked at a familiar landscape in a fresh way. But several of these programmes were difficult to scale up. We increasingly have the tools to combat it. We know what to do if we just can summon the political will.

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