Q6. What is the role of self-help groups in rural development?

Self-Help Groups (SHGs) are informal groups of 10-20 individuals, typically women from similar socio-economic backgrounds, who come together to save small amounts of money regularly. These groups have become crucial instruments for rural development, empowerment, and poverty alleviation.

Role in Rural Development

• Financial Inclusion: SHGs provide access to micro-credit on reasonable terms through pooled savings (internal lending) and external credit (bank linkages). This bypasses traditional moneylenders and funds income-generating activities (e.g., handicrafts, poultry, tailoring). The Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) has mobilized over 10 crore rural women into SHGs.

• Social Empowerment: SHGs, especially all-women groups, provide a platform for women to collective voice their concerns, build confidence, and challenge patriarchal norms. They increase women’s participation in village-level decision-making (e.g., Gram Sabhas).
• Poverty Alleviation: By enabling access to credit, SHGs foster entrepreneurship and create sustainable livelihoods, leading to increased household income, asset creation, and a better standard of living.
• Improving Social Indicators: SHGs often act as community platforms to discuss and tackle social issues like health, nutrition, sanitation, domestic violence, and children’s education, leading to improved human development outcomes.
• Service Delivery: Government agencies increasingly use SHG networks to implement development schemes, from managing PDS shops to running community kitchens (e.g., Kudumbashree in Kerala).

Conclusion

SHGs are powerful engines of “bottom-up” rural development. They have successfully transitioned from being mere micro-credit platforms to becoming vital institutions for social empowerment, economic self-reliance, and effective local governance.