The project has adopted the self-help group (SHG) as the appropriate people’s institution, which provides poor women with the space and support necessary to take effective steps towards greater control of their lives in private and in society. The essence of an SHG is that it lays the foundation for self-reliance through building up an institution, which has the capacity to continue the development and empowerment processes for women in the future. Self-help promotion attempts to raise the choice level of the poor by building up an institutional framework that is in tune with their capacities of self-administration and better geared towards serving their needs. Until now this potential of the rural poor of helping themselves has been underestimated and therefore under explored. Efforts were not made to stimulate the capacity of the rural poor help themselves.

Savings and credit is put forwards as an important entry point for the activities of SHGs as it requires the active participation and commitment of all members. It provides them will and opportunity to exercise control and participate in decision making. It also satisfies short term needs for crisis credit (for consumption and emergency purposes), leaving later to the provision of credit for productive purposes, and removes them from exploitation at the hands of the moneylenders. The self-help group is seen as a dynamic institution, which builds on the resources and management skills of its members and their increasing confidence to become involved in issues based programme.


As the concept of SHGs and the strategy to form such groups is not widely known or practiced in most of the project areas, detailed information is provided on the essential features of SHGs, their characteristics, benefits and contribution to the overall empowerment and development objectives of the project. In addition, a detailed description is provided on the SHG formation and development process. This is followed by a discussion on the role of the Agricon Samiti as interveners and ways in which other Government agencies can be used to supplement in the process of forming SHGs.

Some of Essential Features of SHG’s are :

  1. Ownership of the group by the members: The group exists because the members see some value in it in helping them to solve their problems through their collective efforts. Ownership and control of the group belongs to the members.

  2. Affinity as the base for coming together: A suitable, cohesive group needs a common underlying bond on which trust can be built. This may be caste, sub-caste, blood, community, place of origin, occupation, etc.

  3. Mutual help as the foundation of the group’s existence: The rationale for the existence of the group is mutual help and progress towards self-reliance and not the passive receipt of benefits.

  4. Forum for collective learning: The groups provide a forum for collective learning which rural people find more “friendly”, based on mutual respect/support, and which is consequently more effective than the individual approach that is commonly adopted.

  5. Forum for inter-agency dialogue and cooperation: The groups provide a firm base for dialogue and cooperation in programmes with other institutions like government departments, cooperatives, financial and Panchayat institutions; if the groups are functioning well, they have the credibility and the power to ensure their participation in identifying, planning, budgeting and implementation of programmes for the empowerment of women with a special focus on the poor.

  6. Cost-effective credit delivery mechanism: The group provides a cost effective credit delivery system as the transactions costs of lending decrease sharply both to the banks and the borrowers. At the same time, individual members maintain control over the pace, timing, size and schedules of loans and programmes. The group also helps to build the individual member’s management capacity to optimize returns