SELF HELP GROUPS IN

ENTREPRENURSHIP

GNA Business School /Dr. Namita Kalra

GNA Business School /Dr. Namita Kalra
 CONCEPT
• According to the latest statistics, about 25% of the
Indian population belongs to the rural poor. Women
make up one-third of the Indian labour force.
However, social constraints have prevented them
from having access to and making use of the
available resources that may help them improve
their living conditions.
• Self Help Group is seen by many as the catalyst for
rural development, women, and social
empowerment
GNA Business School /Dr. Namita Kalra
 What are self-help groups?
• Self Help Groups (SHGs) are informal groups that consist of
people who face similar problems.
• These people come together to form a group to overcome
their common problems to improve their standard of living.
• They are mostly from a similar socio-economic background
and are involved in undertaking small savings amongst
themselves in a bank. This amount acts as the fund for the
SHGs and is used to provide loans to its members.
• It is a vital tool to alleviate people from below the poverty
line and improve social status through the promotion of self-
employment.
GNA Business School /Dr. Namita Kalra
• Self-help groups (SHGs) are small, informal associations of individuals who
come together for a common purpose, often related to mutual support,
empowerment, and personal or collective development. These groups can be
found in various contexts, including entrepreneurship, social support, mental
health, and more
• Members of a self-help group come together around a common purpose,
which could range from overcoming addiction, supporting mental health,
pursuing entrepreneurial goals, or addressing a particular social or community
issue.
• The primary objective of a self-help group is to provide a platform for
members to support one another. This support can take various forms,
including emotional support, advice, resources, and practical assistance.
• - Self-help groups often operate without formal leadership or hierarchies.
Decision-making is typically democratic, with members collectively
determining the group's activities, goals, and direction.
• Participation in a self-help group can lead to increased self-awareness, personal
growth, and a greater sense of empowerment. Members often gain a stronger belief in
their ability to effect positive change

GNA Business School /Dr. Namita Kalra

 CHARACTERSITICS/FEATURES
Self-help groups in entrepreneurship refer to small, informal associations of individuals who
come together to support each other in their entrepreneurial endeavors. These groups can be
highly effective in providing a platform for aspiring entrepreneurs to share knowledge,
experiences, resources, and emotional support. Here are some key aspects and benefits of self-
help groups in entrepreneurship:
1. Shared Knowledge and Experience:
- Members can share their experiences, insights, and knowledge related to various aspects of
entrepreneurship such as business planning, marketing, sales, finance, and operations.
- Learning from the experiences of others can help members avoid common pitfalls and make
informed decisions.
2. Networking Opportunities:
- Self-help groups provide a platform for entrepreneurs to expand their network. This can lead
to valuable connections with potential customers, suppliers, mentors, and collaborators.
- Networking can also open up opportunities for partnerships and joint ventures

GNA Business School /Dr. Namita Kalra

3. Emotional Support and Motivation:
- Entrepreneurship can be a challenging journey, and self-help groups offer a
supportive environment where members can discuss their struggles, concerns, and
successes.
- Sharing both successes and failures can provide motivation, boost confidence, and
help members stay focused on their goals.
4. Access to Resources:
- Members can pool resources or provide referrals for services and suppliers. This can
lead to cost savings and improved access to essential resources for their businesses
5. Accountability:
- Being a part of a self-help group can create a sense of accountability. Members may
set goals, share progress, and hold each other accountable for achieving milestones.
6. Diverse Perspectives:
- Self-help groups often consist of individuals from various backgrounds, industries,
and skill sets. This diversity of perspectives can lead to creative problem-solving and
innovative approaches to challenges

GNA Business School /Dr. Namita Kalra

7. Skill Development:
- Workshops, training sessions, and guest speakers organized within the group
can contribute to the skill development of members.
- Members can learn from each other's expertise and may even offer training or
workshops on their own areas of expertise.
8. Market Research and Feedback:
- Members can provide valuable insights into market trends, customer
preferences, and industry-specific information. This can be particularly helpful
for refining business strategies and product development.
9. Reduced Isolation:
- Entrepreneurship can sometimes be isolating, especially for solo entrepreneurs.
Being a part of a self-help group provides a sense of community and belonging.

GNA Business School /Dr. Namita Kalra

 Who helps in the formation of SHGs?
• Any local individual who has needed education or skills
may help initiate the SHGs.
• This individual is involved in bringing together all those
who are facing similar problems and advocating the
benefits of the SHGs.
• This person is often called the “animator” or a
“facilitator”.He or She is usually well-known within the
community.A woman animator can play a significant
role in woman empowerment in rural India.

GNA Business School /Dr. Namita Kalra

However, the animator cannot bring the people together
into the SHGs by himself/herself.
• They are assisted by the following agencies:
• NGOs
• Developmental departments of the state governments
• Any of the locally available banks.
The functions of the animator include:
• Explain the benefits of the SHGs.
• Help initiate the first few meetings of the SHGs.
• Encourage the group and its leader.
• Provide innovative ideas and solve the problems of
the SHGs.
GNA Business School /Dr. Namita Kalra
 How do the SHGs function?
Members:
• An ideal SHG should have about 10 to 20
members.
• This is because if the group is bigger, it will be
difficult for an individual to undertake equal
participation in a large group.
• The SHG shouldn’t have more than one
member from a particular family.
• This allows the inclusion of many families
GNA Business School /Dr. Namita Kalra
• It should also have either only men or only
women because it is found that the mixed groups
are not successful.
• It is also found that the women SHGs are more
successful because the members are better at
savings and that they are making use of the loans
more efficiently than men.
• The members of the SHGs must have similar
problems and backgrounds for it to be successful.

GNA Business School /Dr. Namita Kalra

 What are the functions of the SHGs?
• Initiate and maintain savings within the group: All
members must regularly save at least a small
amount. These savings allow them to get future
credits for their group.
• Lending loans to the members: The savings made
by the SHG must be used to provide loans to
members of the group. Everything related to the
loan must be decided within the group.
• Bank Loans: SHGs must work on getting a collective
guarantee system so that they can avail of loans
from official sources.
GNA Business School /Dr. Namita Kalra
• Solving common problems: SHGs mostly consist
of individuals who face similar problems. The
grouping should essentially help the individual
overcome these problems through discussions
and interactions within the group and
overcoming the problems and finding a
common and united solution to the problems.

GNA Business School /Dr. Namita Kalra

PRATIGYA –SHG IN FARIDABAD

GNA Business School /Dr. Namita Kalra

 Self-Help Groups (SHGs) in India
• There are several self-help groups (SHGs) in India that cater to a wide range of
interests and needs. Here are some of the prominent self-help groups in India:

1. Mahila Mandals:
Location: Predominantly in rural areas.
Aim: Empowering women through social and economic activities.
2. NABARD Self Help Groups:
Location: Nationwide.
Aim: Facilitating financial inclusion and livelihood enhancement among the rural poor.
3. Kudumbashree:
Location: Kerala.
Aim: Empowering women through various livelihood and development activities.

GNA Business School /Dr. Namita Kalra

4. Rural Self Employment Training Institutes (RSETIs):
Location: Various states.
Aim: Providing skill development and self-employment opportunities in rural areas.
5. Federation of SHGs:
Location: Various states.
Aim: Strengthening the collective capacity of SHGs for socio-economic development.
6. National Urban Livelihoods Mission (NULM):
Location: Urban areas across India.
Aim: Alleviating urban poverty by promoting self-employment and skill development.
7. Sarvodaya:
Location: Predominantly in states like Rajasthan, Madhya Pradesh, Uttar Pradesh, and
Bihar.
Aim: Empowering marginalized communities through self-help and community
development.

GNA Business School /Dr. Namita Kalra

 STRUCTURE OF SHG

• 10-20 members
• Generally, all members belong to Below Poverty
Line(BPL)
• Maximum 30% in a group may be marginally Above
Poverty Line(APL)
• Flat interest rates
• Only one member will be allowed per family
• A person will be strictly a member of one group only
• Free exchange of views done, like in a democracy

GNA Business School /Dr. Namita Kalra