Explain the Self-help group approach to development.

 Self-Help Group Approach to Development

One of the approaches to development that promote socio-economic well-being of the poorest of the poor is the SHG approach. On the one hand, it is a rights-based approach that considers that development and human rights are interlinked and apply the principles of nondiscrimination and equality to eradicate poverty. On the other, it is a bottom-up approach that intends to improve upon people’s existing skills and capabilities, thereby, empowering people’s organisations in the long run. Largely, SHG approach focuses on poor (especially women) and provides platform to: (i) lead their life with dignity (ii) equip them to come out of poverty trap (iii) strengthen their decision-making skills at the household and community level. Having acknowledged the potential of SHGs, the Ministry of Rural Development (2017), grades SHGs based on five parameters (Pancha Sutra) vis-à-vis regular meetings, regular savings, internal loaning, timely repayment, proper book keeping.

The Three Dimensions of SHG Approach

There are three dimensions to SHG approach vis-à-vis economic, social, and political dimensions (Kindernothilfe, 2014).

(i) Economic Dimension

SHGs save agreed amounts of money as a collective and provide loans to the respective members to improve their economic conditions. The terms and conditions about financial transactions would be evolved by the group. Through this economic dimension, SHG develops ‘mutual trust’, ‘accountability’, ‘participation’ and ‘creativity’.

(ii) Social Dimension

The social dimension focuses on ‘affinity’, ‘trust’, ‘and participation ’and ‘mutual responsibility’. SHG focuses on individual and community level problems and well-structured SHGs also network with other groups to form a bigger collective.

(iii) Political Dimension

The political dimension indicates ‘independence’ and ‘involvement’ of the SHGs in taking up neighbourhood issues and enables them to seek solution. This provides them confidence to take up larger issues at the local, regional, and national levels.

Characteristics of SHG

i)

Ideally, a SHG comprises a small group between 10 to 20 members. And they set a common goal to improve their livelihood. Rules and regulations would be formulated by the group members so as to avoid any room for arbitrariness.

ii)

The group consists of either male or a female member of the community as it is believed that homogeneity would yield high success rate. For example, homogeneity can range from ‘same neighbourhood’, ‘similar living conditions’, ‘families of farm suicides’, ‘victims of natural disasters’ etc., so that there is a sense of empathy and mutual respect among the group members.

iii)

The group sets up its own fund and depending on the needs of the members, shortterm loans are provided. The fund grows bigger with the savings of each member along with the interest borne by the member. According to the International Labour Organisation , “it is the responsibility of all members to deposit the same amount of savings every week and to pay their loans plus interest back on time”

iv)

Each SHG will own a bank passbook and each member owns a loan card. Thus, financial inclusion is made possible through banks. Each member would be encouraged to open a savings bank account to cultivate savings habit.

v)

All members should belong to similar socio-economic status to bring group cohesiveness.

vi)

The group’s financial transactions would be recorded and maintained in a register wherein the details of individual loans, repayments, interest remitted, etc., would be documented.

Regular interaction of SHG members (every week/fortnight) so that they learn from each other’s experiences. Attendance would be taken. Minutes of the meeting, nature of discussions, names of the group members, etc. would be documented. In each meeting, the members would discuss the problems faced by the group members and try to resolve it.

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