- As a member of a group, an economically disadvantaged individual acquires strength.
- Furthermore, SHG lending lowers transaction costs for both lenders and borrowers.
- While lenders only have to deal with a single triple SHG account rather than a big number of tiny individual accounts, borrowers who are members of a SHG reduce or eliminate travel (to and from the branch and other locations) for paper work and workdays lost canvassing for loans.
- SHGs have considerably empowered impoverished people in rural regions, particularly women, where they have been effective.
- In rural regions, SHGs have made a significant contribution to lowering the impact of informal lenders.
- Many large corporations are also supporting SHGs in various parts of India.
- SHGs assist borrowers in overcoming the lack of collateral issue. Women may talk about their problems and come up with solutions.
- Financial Inclusion – SHGs incentivise banks to lend to poor and marginalised sections of society because of the assurance of returns.
- Voice to marginalised – SHGs have given a voice to the otherwise underrepresented and voiceless sections of society.
- Social Integrity – SHGs help eradicate many social ills such as dowry, alcoholism, early marriage, etc.
- Gender Equality – By empowering women SHGs help steer the nation towards true gender equality.
- Pressure Groups – SHGs act as pressure groups through which pressure can be mounted on the government to act on important issues.
- Enhancing the efficiency of government schemes – SHGs help implement and improve the efficiency of government schemes. They also help reduce corruption through social audits.
- Alternate source of livelihood/employment – SHGa help people earn their livelihood by providing vocational training, and also help improve their existing source of livelihood by offering tools, etc. They also help ease the dependency on agriculture.
- Impact on healthcare and housing – Financial inclusion due to SHGs has led to better family planning, reduced rates of child mortality, enhanced maternal health and also helped people fight diseases better by way of better nutrition, healthcare facilities and housing.
- Banking literacy – SHGs encourage people to save and promote banking literacy among the rural segment.
Role of Animator:
- Convene and conduct women’s group meetings at regular intervals.
- Create awareness of present social position, objectives of the programme and motivate building up of team spirit and team-work.
- Work for improvement of literacy and numeracy of the group members.
- Disseminate information to members about Government Welfare schemes, especially in relation to health and family welfare, education etc.,
- Disseminate information received during training sessions to SHG members - eg. relating to SHG management, general hygiene, environment consciousness, women and the law.
- Facilitate group to identify appropriate income generating activities for members, coordinate with banks for getting loans and ensure prompt repayment.
- Training the members in the procedures of bank activities.
- Encourage members for collective thinking and action.
- Working for improvement of socio-economic development of members.
- Ensure regular group savings by members.
- Maintenance of Minute Book, Account Book, Loan Records, Asset creation register etc.
- Observing proceedings of the group meetings for passing resolution for grant of loans.
- Assist group in getting bank loan, asset creation and motivation for repayment.
- Ensure participation of all members of the group.
- Make regular house visits and motivate absentees to attend meetings regularly.
- Attend training organised by NGO/PIU.
- Attend coordination meetings.
- Motivating the members to act with unity and integrity
- Ensure that SHGs become self-reliant and sustainable over 2 or 3 years.
- Convening the group meetings at regular intervals.
- Assist the animator in achievement of programme objectives.
- Operate bank account jointly as authorised by group.
- Disseminate information received during training sessions to SHG members - relating to SHG management, general hygiene, environment consciousness, women and the law etc.,
- Assist group in getting bank loan, asset creation and motivation for repayment.
- Handling cash and all related banking activities.
- Help problem solving within the group.
- Try to mobilise local resources for benefit of the group/village.
- Management and effective use of Group savings and Loan funds.
- Provide (assist) training of group members to improve their business skills, management of their activities and understanding of credit and banking procedures.
- Carry out decisions of the group.
- Represent the group in other forums.
- Promptly attend SHG meetings.
- Fully participate in SHG meetings and voice opinion clearly and freely.
- Share responsibility of SHG collectively like going to banks by rotation .
- Prompt repayment of SHG loans.
- Participate in Village and Social Action Programmes.
- To ensure unity and mutual trust between all members and adopt the principle of “give and take“
- Ask questions/doubts openly and ensure that the SHG functions transparently.
- Ensure prompt annual re-election of atleast representatives and also animators.
- Promptly attend training programmes and ensure implementation of good practices.
- Share problems, experience, feelings and ideas with all members of the SHG.
Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme
Seed Capital to SHG
Seed capital @ Rs. 40,000/- per SHG member would be provided to those engaged in food processing for working capital and purchase of small tools. Priority would be given for SHGs involved in ODOP produce in giving seed capital. Seed capital as a grant would be provided to the SHG federation which, in turn, would be extended to members as a loan through the SHGs. The SHG federation would provide this amount as a loan to the members of SHGs to be repaid to the SHG.
Eligibility Criteria for Seed Capital for SHGs:
1. Only SHG members that are presently engaged in food processing would be eligible.
2. The SHG member has to commit to utilize this amount for working capital and purchase of small tools and give a commitment in this regard to the SHG and SHG federation.
3. Before providing the seed capital, SHG Federation should collect the following basic details for each of the members:
- Details of the product being processed;
- Other activities undertaken;
- Annual turnover;
- Source of raw materials and marketing of produce.