Q.32) “Micro-Finance as an anti-poverty vaccine, is aimed at asset creation and income security of the rural poor in India”. Evaluate the role of Self-Help Groups in achieving the twin objectives along with empowering women in rural India. (GS-II: SOCIAL JUSTICE, UPSC CSE 2020)(Answer in 250 words,15-marks)

INTRODUCTION: Self-Help Group (SHG) initiative is biggest initiative for women empowerment through asset creation and income security. It is linked to micro-finance because SHGs works at micro level of income generating activities through cooperation supported through MFIs, Commercial banks and NABARD.

Micro-finance is credit of small amount such as Rs. 5000, Rs. 20000 facilitated by MFI, NABARD through government schemes meant for asset creation like rural infrastructure (road repairment, lakes rejuvenation) etc.

India has, witnessed state-led promotion of SHGs through Central schemes – the DeendayalAntyodayaYojana-National Rural Livelihoods Mission and state government initiatives such Kudumbashree in Kerala and Jeevika in Bihar.

A Self-Help Group (SHG) is a village-based financial intermediary usually composed of 10-20 local women. Self-Help Group may be registered or unregistered. It typically comprises a group of micro- entrepreneurs having homogenous social and economic backgrounds, all voluntarily coming together to save regular small sums of money, mutually agreeing to contribute to a common fund and to meet their emergency needs on the basis of mutual help. They pool their resources to become financially stable, taking loans from the money collected by that group and by making everybody in that group self- employed.

SHGs were formed for financial cooperation for income generating ventures. E.g. SEWA (1971), Grameen Bank (1976), MYRDA (1989), NABARD- Bank linkage program provides income security as they have to work collectively and invest in income generating activities over the time,. It has multiplier effect. They have expanded and became large enterprises such as LijjatPapad (Rs. 800 crore turnover)

Twin objectives:

• • Income security through subsidized loans, continuous credit availability. Recently there has been increase in the amount of loan given under DDY- Aajeevika program.
  • Asset creation through rural infrastructure.

Women SHGs are being economically empowered and it becomes the foundation for further social and psychological empowerment of women. In this way they are becoming change agent in society. Such as:

• • Economic empowerment of women through easy access to the micro credit. The government programmes such as NABARD SHG-Bank linkage programme, has helped the women in this direction.
  • The successful SHGs such as SEWA, LijjatPapad has helped to act as role model for other SHGs in rural areas.
  • Kudumbashree programme of Kerala government has been successful in economic empowerment of rural women by providing credit access and Installing ATMs in rural areas.
  • Economic empowerment also leads to social and political empowerment. Women develops leadership qualities through SHGs. Thus they actively participate in PRIs.
  • They get aware about the government schemes and start availing the benefits entitled to them.
  • It also leads to psychological empowerment as they get say in decision making in their house hold matters.

Weakness of SHGs:

• • Uneven development among states: They have been largely successful in southern states as compared to northern states.
  • SHGs have not been able to survive after getting The success ratio is around 50%.
  • Lack of sustained credit supply. E.g. during pandemic, interruption in credit supply or less mount of loans sanctioned to SHGs.
  • Marketing of products manufactured by SHGs.

Conclusion:

The government is taking steps to strengthen SHGs such as linkages of SHGs to MSMEs, initiatives to reduce uneven development of SHGs in northern states such as Tejasvi. SHG initiative is biggest initiative of women empowerment in informal sector and government should further support to overcome its weaknesses.