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Women Empowerment Through SHGs

28 Jun 2019 5:27 PM | Sewa International (Administrator)

What is a woman’s place in the modern world?

So many have asked this question and for so long. My one such direct faceoff with this question came when my father sought my opinion on it. From a father, to a daughter . What do you think is a woman’s place in the modern world?

My response – That depends on who gets to answer this question.

I am appalled and thrilled by how conveniently everyone ignores the inherent bias in this question . And don’t take me wrong while I say this but how does anyone get to assume that a ‘place’ for women must be defined and set forth to begin with. Half of the population must somehow be reduced to the role arrived at by a single conversation. No matter how broad that role is, it will be –by-nature–a reduction from the infinite variety that is womanhood. How can a one size fit all model be applied to anyone?

There is and must not be any role for women, instead we must seek to diversify the entire discourse. Irrespective of a man or a woman there is a role for everyone, individually. But our empowerment , our strength lies , not in the role but the power to choose that role. That is the entire premise of feminism . Not equality, not empowerment, not fixation of roles . But the freedom to be able to make choices and decide your own role. The very fact that I have to make this point shows how deep rooted patriarchy is in our minds , and how subtle the control is . Allowing women to do as they want is not the point, the entire point is setting a woman free to make her own choices , even if those choices go against any one’s perception of right and wrong

The womenfolk of Uttarakhand are at the centre of our entire work in Uttarakhand , as stakeholders, managers and also as beneficiaries. The SKVK program in uttarakhand is a shining example of how women have moved forward not in fraternity, as a brotherhood but in their own unique sisterhood , lifting each other up, nourishing each other with love and support . We have been able to achieve this by the Self Help Group model of development which has found a strong footing in the rest of the country as well.

SHGs – A Brief Introduction

A self help group is a village based financial intermediary committee usually composed of 10-20 local woman. The members make small regular saving contributions for a few months until there is enough capital in the group for lending. Funds may then be lent back to the members or other villagers . These SHGs are then further ‘linked’ to banks for delivery of micro credit. It lays emphasis on capacity building, planning of activity clusters, infrastructure build up, technology ,credit and marketing.


  1. The very existence of SHGs acts a great boost to make the poor self reliant and to give them hope .
  2. Not only do the SHGs help in increasing their income, improving their status in the society but it’s ultimately the nation that reaps the advantages of socialism.
  3. The harsh reality is that rural poverty and unemployment still persist in the society and women’s earnings positively and directly affect a family’s financial condition
  4. Social conventions and gender ideology deprive women of the access to resources which would enable them to increase productivity .


  1. The basic objective is to inculcate the habit of saving and using banking facilities among the members. The saving habit thus strengthens the bargaining capacity of the women and they are in a better position to acquire loans for productive purposes. The women gain from collective wisdom in managing their finances and distributing the benefits among themselves.
  2. The SHG play a major role in sensitising more women to form SHGs and in making them realise its importance in their empowerment. This helps the women collective decision making and also to enhance the confidence and capabilities of the women.
  3. These groups go a long way in motivating women to take up social responsibilities particularly related to women development. SHGs are considered as one of the most significant tools to adopt participatory approach for the economic empowerment of women.
  4. Lastly , the most important change that the SHG culture has brought in the country is to change the gender dynamics of power within a family and ultimately the society at large. They now have greater say in the family matters and also are seen as stakeholders and partners in taking the community forward. The financial independence has eventually paved the way for societal upliftment of women and their voices.


According to the Status of Microfinance in India 2009-2010 released recently by National Bank for Agriculture and Rural Development (NABARD) there are 69,53,000 SHGs in the country savings linked with banks and 48,51,000 SHGs having loan outstandings as on 31 March 2010. The estimated number of families covered under this model is about 970 lakhs. The total savings amount of all the SHGs with banks as on 31 March 2010 amounts to Rs.6198.71 crore and the total amount of loans outstanding against SHGs as on 31 March 2010 is Rs.28038.28 crore. The SHG-Bank Linkage Model is the largest financial inclusion programme in the world. Following is a brief account of how SHGs

  1. SHGs borrow from banks once they have accumulated a base of their own capital and have established a track record of regular payments. A SHG after completing a period of 6 months is rated by the Branch Manager of the bank to which it is savings linked, on certain parameters. If the SHG passes the rating exercise, the bank extends it a loan which is known as credit linkage. SHGs are rated by banks every time they take a loan from the bank. Therefore, it calls for continuous best practices by SHGs for getting repeat dosage of credit.
  2. The rate of interest charged by the bank for a loan to SHG is the Prime Lending Rate (PLR) of the bank (the rate at which the bank lends to its best customers) which is in the range of about 12% per annum. This is one of the positive impacts of the programme in reducing the interest burden of the members and avoiding the exploitation of the poor by informal agencies, particularly money lenders, commission agents, etc. Furthermore, members of groups are aware of the rate of interest they pay to the group and the rate of interest paid by the group to the bank the loans they have availed.
  3. Recovery Performance – According to the statistics on recovery status by NABARD, banks have reported recovery of more than 80% of loans by SHGs. While the bankers are generally happy about the recovery performance under their SHG portfolio what is more gladdening is the fact that there are no coercive methods in recovery of loans.

The next part of the article would discuss at stretch , specifically how our Uttarakhand SKVK project incorporates SHGs to drive change throughout the region by skill development and agriculture. It also delves into the details of how the mobilisation process and the formation of SHG happens, how the day to day activities are conducted and how the monthly meeting process takes place.

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