ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Performance of Self-help Groups in India

Since its inception, the performance of the self-help group programme in the area of rural development and women’s empowerment has been admirable. But, although the programme is being implemented in many parts of the country, its success has been patchy. This study evaluates its performance during 2011–19. It focuses on two aspects of the programme’s performance: its geographical expansion and the growth of non-performing assets. It shows that the programme has been more successful in well-off states, while in the central and north-eastern regions, it faces severe difficulties. The mounting NPAs in these regions require immediate intervention.


The authors thank the anonymous reviewer for their valuable comments and suggestions which helped them improve the paper.

What makes the microfinance movement in India unique is the active involvement of formal financial institutions in providing essential financial services to the poor by establishing links with informal groups as clients. These institutions have supported the self-help group (SHG) programme,1 innovated and initiated by the National Bank for Agriculture and Rural Development (NABARD), by providing microcredit to, and encouraging the habit of making small savings among, the financially deprived. The SHG scheme is not just a mechanism of financial intermediation but also a unique process of socio-economic engineering (Kropp and Suran 2002). The members of each SHG are given the opportunity to participate as equals in deciding the future course of action to achieve their desired objectives (Kanitkar 2002; Tiwari and Fahad 2004). Along with increasing financial access, the SHG movement also supports women empowerment and furthers other developmental goals related to education, health, family planning, and access to land and water.

The programme has achieved many milestones since its inception (NIRDPR 2019). It has successfully created livelihood opportunities for the rural poor; this has further attracted the involvement of many financial players. The SHG movement has made great strides in the fields of women empowerment and socio-economic development.2 However, with the expansion of the programme in different parts of the country, some concerns have also entered the picture. Two major problems for the movement are regional disparities and the rising share of non-performing assets (NPAs) in SHG loans in banks.

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Updated On : 1st Feb, 2021
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