Micro Credit Management by Women’s Self-Help Groups

Women as micro and small entrepreneurs have increasingly become a key target group for micro-credit programme. Providing access to micro-credit is considered a precondition for poverty alleviation, but also for women’s empowerment. As poor women are increasingly recognised to be better borrowers, they are starting to become of interest also to regular financial institutions. But despite the proven positive impact entrepreneurs in the informal sector, micro-finance is just one pool among others to address the multiple causes of poverty, unemployment and social exclusion. Self Help Groups (SHGs) form the basic constituent unit of the micro-credit movement in India. An SHG is a group of a few individuals–usually poor and often women–who pool their savings into a fund from which they can borrow as and when they can borrow as and when necessary. Such a group is linked with a rural bank, co-operative or commercial bank where they maintain a group account. Most of the NGOs have been previously functioning in different developmental roles among the poor, and now added micro-credit to the list of services they provided. A few others, impressed by the success of micro-financé elsewhere, started off as MFIs. Self Help Groups (SHGs) among the poor mostly women, have rapidly become a common rural phenomenon in many Indian states. NGOs provide the leadership and management necessary informing and running such groups in most cases. This action research concentrates on the study of micro-credit management by the women’s Self Help Groups (SHGs). The main objectives of the study were to form SHGs in the rural and urban areas and to study the impact of the efforts on the SHGs in qualitative and quantitative dimensions. The findings of the study would enable the government, financing agents and the NGO’s to frame policies and to co-ordinate their activities and exchange their experiences in the area of micro-finance and gender and to allow for the participation of clients especially women entrepreneurs in the design and offering of financial services to micro and small enterprises.