Self-Help Groups Play a Big Role in The Empowerment of Women
Collateral-free micro-loans offered by SHGs are among our most vital tools for women to achieve socio-economic self-reliance
Millions of women in our hamlets know what unemployment means… Give them access to economic activities and they will have access to power and self- confidence to which they hitherto have been strangers,” said Mahatma Gandhi in Young India (1930).
Nearly a century has passed, and despite the multidimensional growth that India has achieved since, his concerns remain relevant even today. Although women constitute almost half of India’s population of 1.2 billion, they are largely excluded from participating in economic activities and decision-making, as well as access to resources of health, nutrition, education, etc. This exclusion and discrimination is reflected in low female labour force participation rates, with India recording a meagre 22.3% in 2021 in comparison with 30.3% in 1990.
In the context of increased importance being given to innovation, technology and self-sustenance, especially in a post-covid era, economically weaker sections have faced an acute loss of jobs and income. Even though women have the potential to contribute to household finances, they often do not have the agency to participate in decisions related to avenues of income generation, thus many a time pushing their families to the brink of poverty. In a country that is at the cusp of a rapid transformation in terms of evolving employment opportunities, urbanization and innovation, female participation in the economy remains crucial to where India stands globally. Even though working women account for approximately 432 million, about 343 million are not in paid formal job roles or work. An estimated 324 million of them are not in the labour force; and another 19 million are part of the labour force but not employed. Hence, the nature of employment among women is either not accounted for in the formal economy, or women end up not having access to formal jobs due to existent socio-cultural complexities. As a society with deep-rooted patriarchy, even if women want to attain employment, the dominant tradition of female domestic responsibility coupled with social stigma limits their economic advancement and access to opportunities in comparison with their male equivalents.
To overcome social stigmas around employment and give women the agency to break out of the shackles of subordination, entrepreneurship is an innovative and simple tool. To boost the participation of women in the entrepreneurship ecosystem, the government has introduced a plethora of schemes, such as the Mudra Yojana, Udyogini Scheme, Annapurna Scheme and Stand Up India.
However, despite efforts to create a better environment for women entrepreneurs in India, the arranging of finances remains the single biggest challenge. While the family may have expendable income, its dominant members often refrain from contributing to a woman’s dream of financial independence. Moreover, even if women manage to apply for loans, the collateral against which these are offered, such as property, is often held in their spouse’s name, which further acts as a deterrent to start an enterprise. Coupled with social stigmas, no financial access results in unfulfilled ambitions of women, while limiting their opportunities to become self-reliant by gaining agency or mobility in the social sphere.
In such a scenario, self-help groups (SHG) can act as a bridge between women entrepreneurs who have the will to begin an enterprise but do not have the resources to fulfil their dream, and the finances needed for it. An SHG comprises a small group of women who come together to make regular monetary contributions. Emerging as important micro-finance systems, SHGs work as platforms that promote solidarity among women, bringing them together on issues of health, nutrition, gender parity and gender justice. SHGs have already made a significant contribution in developing entrepreneurship aptitudes among rural women by enhancing their skills and giving them a chance to engage in various entrepreneurial activities.
SHGs provide women entrepreneurs with micro-loans to sustain their businesses, while also creating an environment for them to develop greater agency and decision-making skills.
In India, the SHG movement began in the 1980s, when several non-government organizations mobilized and organized poor communities in rural areas and offered them formal channels for social and financial support. This programme gained momentum with the National Bank for Agriculture and Rural Development linking a small number of such groups with banks. Called the Self-Help Group Bank Linkage Programme, this revolutionary initiative connected group members, many of whom had never had a bank account before, to formal financial services in a sustainable and scalable manner.
In Maharashtra, specifically, the concept of SHGs goes way back to 1947, when a few women of Amravati district established an SHG with just 25 paise. Today, apart from being a conduit for credit in the state, SHGs also deliver services ranging from entrepreneurial training, livelihood promotion and community development for women entrepreneurs. SHGs such as Mahila Arthik Vikas MahilaMandal, UMED Abhiyan under Maharashtra’s department of rural development’s State Rural Livelihood Mission, and government schemes such as Tejaswani, etc, have proven beneficial in the development of women entrepreneurship for the cause of women’s empowerment. A study conducted by Ashwini Deshpande and Shantanu Khanna in 2020 reported that SHGs in Maharashtra have had a strong impact on a range of indicators related to women’s empowerment in the state, including political participation, knowledge of administration, financial literacy, mobility and decision-making. In Maharashtra alone, 527,000 SHGs have had a role to play in accounting for over 50% of all women-led small-scale industrial units in India, which shows that SHGs can lead to the holistic development of women entrepreneurship.
Self-help groups are exceedingly relevant today because their provision of micro-loans helps overcome regional imbalances as well as information asymmetries, thus offering a level playing field in terms of access to resources for women. The multi-faceted IFMR study conducted by the ministry of rural development evaluated the impact that SHGs have had on livelihoods, and thereby on consumption, expenditure and savings patterns in households whose women are part of it. The study found that women aided by SHGs were 10% more likely to save on a regular basis, resulting in economic empowerment, while working towards a better future for the next generation.
The revolutionary momentum that SHGs have created has given women an important sense of self-assurance in their journey to become aatmanirbhar or self-reliant. Observing the crucial role they play, corporations and foundations globally have designed SHG-led programmes to help women achieve economic empowerment. Initiatives such as the UdyamStree campaign by EdelGive Foundation, for example, has focused on women entrepreneurs in Maharashtra and Rajasthan, among other states, by leveraging SHGs such as Mavim, and other relevant stakeholders. Facebook’s Pragati and Google’s Women Will, among others, have also moved the needle in fostering a level-playing field for women entrepreneurs.
With mortgage-free micro-loans at the core of the trust that SHGs build with their beneficiaries, they are one of India’s most important tools for women to achieve socio-economic self-reliance.
