A Self-Help Group (SHG) is a small, voluntary association of people (usually 10-20 members) who come together to improve their social and economic conditions through collective savings, lending, and mutual support.

Any individual, particularly women and marginalized communities, who are willing to contribute savings, participate in meetings, and support group activities can join an SHG. Most SHGs focus on empowering women from similar socio-economic backgrounds.

• Promote savings and financial discipline
• Provide access to microloans for income-generating activities
• Enhance social and economic empowerment
• Encourage skill development and entrepreneurship
• Foster community support and collective decision-making
• Create awareness about government schemes and entitlements
• Improve access to formal banking services

• Financial Inclusion: Access to savings and credit facilities
• Social Empowerment: Collective voice and confidence building
• Skill Development: Training in various income-generating activities
• Government Benefits: Eligibility for various subsidy schemes
• Entrepreneurship: Support for small business ventures
• Community Support: Mutual help during emergencies

Most SHGs consist of 10-20 members. This size is considered ideal because:

• It's small enough for effective participation by all members
• Large enough to accumulate meaningful savings
• Easier to manage and maintain transparency
• Optimal for democratic decision-making

The formation process typically involves:

1. A group of 10-20 like-minded individuals comes together voluntarily
2. They elect a leader (President), secretary, and treasurer
3. Establish group norms and rules for operation
4. Begin regular meetings (usually weekly or monthly)
5. Start savings contributions from all members
6. Develop simple record-keeping systems
7. Some SHGs register with government or NGO programs for additional benefits

No, registration is not mandatory for basic SHG functioning. However, registered SHGs can access several benefits:

• Eligibility for government schemes and subsidies
• Easier access to bank loans under SHG-Bank Linkage Program
• Greater credibility when dealing with officials and institutions
• Opportunity to form federations with other SHGs

SHGs can register through multiple channels:

The exact process varies by state and program, but typically involves submitting basic group details, minutes of meetings, and savings records.

Common documents required include:

• List of members with contact details
• Resolution for office bearers (President, Secretary, Treasurer)
• Copy of group rules/constitution
• Minutes of meetings showing consensus to register
• Savings and loan records
• Bank account details (if available)
• Identity proof of office bearers (Aadhaar, Voter ID, etc.)
• Passport photos of all members (in some cases)

These positions are typically rotated periodically (every 1-2 years) to ensure shared leadership.

SHG savings operate on these principles:

• All members contribute a fixed amount at regular intervals (weekly/monthly)
• Minimum savings amount is decided by the group (often ₹10-₹100 per meeting)
• Savings are pooled into a common fund maintained by the treasurer
• Members can save more than the minimum amount if they wish
• Savings are recorded in individual passbooks and group registers
• After 6-12 months of regular savings, the group can start internal lending

The loan process typically follows these steps:

1. Member submits loan request during meeting
2. Group discusses purpose, amount and repayment capacity
3. Approval by majority or consensus
4. Interest rate decided by group (usually 1-3% per month)
5. Repayment terms set (typically 3-12 months)
6. Loan amount disbursed from group fund
7. Regular repayment tracked in meetings

Priority is usually given to income-generating activities, emergencies, and health needs.

Yes, through the SHG-Bank Linkage Program (SBLP), which has three models:

Requirements include 6 months of regular savings, good repayment history, and proper bookkeeping.

SHGs typically set their own interest rates, which are:

• Internal Loans: 1-3% per month (decided by group)
• Bank Loans Onward Lending: Bank rate plus 2-5% (to cover group risk)
• Emergency Loans: Sometimes lower or interest-free

This is significantly lower than local moneylenders who may charge 5-10% per month.

SHG financial management includes:

Meeting frequency varies but typically:

• Weekly: Most common, especially in early stages
• Monthly: For mature groups with established systems
• Emergency: Called as needed for urgent matters

Meetings usually last 1-2 hours and follow a standard agenda including savings collection, loan discussions, and skill sharing.

SHGs follow democratic decision-making:

• Consensus: Most decisions aim for unanimous agreement
• Majority Vote: Used when consensus isn't possible
• Quorum: Typically 2/3 members must be present for major decisions
• Transparency: All discussions and decisions recorded in minutes
• Equal Voice: Each member has one vote regardless of savings amount

Major decisions include loan approvals, rule changes, and large expenditures.

All records should be preserved for at least 5 years and updated regularly.

Leadership selection follows these principles:

• Election: By consensus or voting during meetings
• Rotation: Positions typically change every 1-2 years
• Inclusion: Opportunities for all willing members
• Training: New leaders receive guidance from outgoing leaders

1. Opening: Welcome and attendance recording
2. Savings Collection: Members deposit savings
3. Loan Matters: New requests, repayments, follow-ups
4. Account Updates: Financial status presentation
5. Training/Skill Sharing: Educational component
6. Community Issues: Discussion of local concerns
7. Government Schemes: Information sharing
8. Other Business: Any additional matters
9. Next Meeting: Date and agenda preview

The secretary maintains minutes documenting all discussions and decisions.

Access pathways include:

• Through Promoting Institutions:
  • Block Development Office
  • District Rural Development Agency (DRDA)
  • NRLM/NULM field staff
  • Partner NGOs
• Direct Applications:
  • To banks under SHG-Bank Linkage
  • To District Industries Centers
  • Online portals (state-specific)
• Community Resource Persons: Like Krishi Sakhi, Bank Sakhi who facilitate linkages

The SHG-Bank Linkage Program (SBLP) is India's largest microfinance initiative with three models:

• Training: Regular bookkeeping workshops
• Simplified Tools: Use of pictorial records for illiterate members
• Digital Solutions: Basic accounting apps (e.g., SHG accounting software)
• Verification: Three-member committee checks records monthly
• Standardization: Uniform formats provided by promoting agencies
• Transparency: Public display of accounts in meetings