1. What is a Self-Help Group ?
Self-Help Group (SHG) is a small voluntary association of poor people, preferably from the same socio-economic background. They come together for the purpose of solving their common problems through self-help and mutual help. The SHG promotes small savings among its members. The savings are kept with a bank. This common fund is in the name of the SHG. Usually, the number of members in one SHG does not exceed twenty.
2 What are the objectives of Self-Help Groups ?
The SHGs comprise very poor people who do not have access to formal financial institutions. They act as the forum for the members to provide space and support to each other. It also enables the members to learn to cooperate and work in a group environment. The SHGs provide savings mechanism, which suits the needs of the members. It also provides a cost effective delivery mechanism for small credit to its members. The SHGs significantly contribute to the empowerment of poor women.
3 Who helps in the formation of SHGs ?
Non Governmental Organizations (NGOs) Social Workers, health workers, village level workers, etc Informal Associations of local people Development oriented government departments, Banks, Bank personnel, Mahila Mandals, Yuvak Mandals, Facilitators, other individuals (in their personal capacities) Farmers' Clubs under the Vikas Volunteer Vahini ( VVV ) Programme of NABARD and Other development institutions.
4 Should SHG members comprise only poor people?
The SHG-bank linkage programme is targeted to reach the poorest sections, which are bypassed by the formal banking system. Therefore, it is essential that only the very poor be considered as the target group for the SHG -bank linkage programme.
5 Should the SHG comprise only women members?
An SHG can be all-women group, all-men group, or even a mixed Group. However, it has been the experience that women's groups perform better in all the important activities of SHGs. Mixed group is not preferred in many of the places, due to the presence of conflicting interests.
6 How is a bank account opened by an SHG?
As soon as the SHG is formed and a couple of group meetings are held, an SHG can open a Savings Bank account with the nearest Commercial or Regional Rural Bank or a Cooperative Bank. This is essential to keep the thrift and other monies of the SHG safely and also to improve the transparency levels of SHG's transactions. Opening of SB account, in fact, is the beginning of relationship between the bank and the SHG. The Reserve Bank of India has issued instructions to all banks permitting them to open SB accounts in the name of registered or unregistered SHGs.
7 What are the advantages of internal lending of own savings in an SHG?
By initially managing their own common fund for some time, SHG members not only take care of the financing needs of each other, but develop their skills of financial management and intermediation as well. Lending to members also enhances the knowledge of SHG members in setting the interest rate and periodic loan installments, recovering the loan, etc.
Self-Help Group (SHG) is a small voluntary association of poor people, preferably from the same socio-economic background. They come together for the purpose of solving their common problems through self-help and mutual help. The SHG promotes small savings among its members. The savings are kept with a bank. This common fund is in the name of the SHG. Usually, the number of members in one SHG does not exceed twenty.
2 What are the objectives of Self-Help Groups ?
The SHGs comprise very poor people who do not have access to formal financial institutions. They act as the forum for the members to provide space and support to each other. It also enables the members to learn to cooperate and work in a group environment. The SHGs provide savings mechanism, which suits the needs of the members. It also provides a cost effective delivery mechanism for small credit to its members. The SHGs significantly contribute to the empowerment of poor women.
3 Who helps in the formation of SHGs ?
Non Governmental Organizations (NGOs) Social Workers, health workers, village level workers, etc Informal Associations of local people Development oriented government departments, Banks, Bank personnel, Mahila Mandals, Yuvak Mandals, Facilitators, other individuals (in their personal capacities) Farmers' Clubs under the Vikas Volunteer Vahini ( VVV ) Programme of NABARD and Other development institutions.
4 Should SHG members comprise only poor people?
The SHG-bank linkage programme is targeted to reach the poorest sections, which are bypassed by the formal banking system. Therefore, it is essential that only the very poor be considered as the target group for the SHG -bank linkage programme.
5 Should the SHG comprise only women members?
An SHG can be all-women group, all-men group, or even a mixed Group. However, it has been the experience that women's groups perform better in all the important activities of SHGs. Mixed group is not preferred in many of the places, due to the presence of conflicting interests.
6 How is a bank account opened by an SHG?
As soon as the SHG is formed and a couple of group meetings are held, an SHG can open a Savings Bank account with the nearest Commercial or Regional Rural Bank or a Cooperative Bank. This is essential to keep the thrift and other monies of the SHG safely and also to improve the transparency levels of SHG's transactions. Opening of SB account, in fact, is the beginning of relationship between the bank and the SHG. The Reserve Bank of India has issued instructions to all banks permitting them to open SB accounts in the name of registered or unregistered SHGs.
7 What are the advantages of internal lending of own savings in an SHG?
By initially managing their own common fund for some time, SHG members not only take care of the financing needs of each other, but develop their skills of financial management and intermediation as well. Lending to members also enhances the knowledge of SHG members in setting the interest rate and periodic loan installments, recovering the loan, etc.
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