Self-Help Groups (SHGs) provide rural women with access to small, low-interest loans through collective savings, reducing dependence on moneylenders. Linked with banks, they ensure fair lending and financial inclusion. SHGs empower women socially and economically, as seen in NABARD-supported groups in Andhra Pradesh.
“Self-Help Groups (SHGs) have transferred rural credit systems”. Evaluate this statement by discussing how Self-Help Groups (SHGs) address the limitation of informal credit and empower women borrowers.
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Self-Help Groups (SHGs) provide rural people, especially women, with easy access to small, low-interest loans. By pooling savings, members can borrow without relying on local moneylenders who charge very high interest. This ensures financial inclusion and stability in villages.
Bank Linkage:
Through the SHG–Bank Linkage Programme, groups build trust with formal banks. They receive loans collectively, making repayment easier and more disciplined. This connection strengthens rural credit systems and promotes responsible borrowing.
Empowerment:
Women gain financial independence, confidence and decision-making power within families. They start small businesses, manage income and become role models for others in their community.
Social Impact:
SHGs develop cooperation, savings habits and entrepreneurial spirit among women, uplifting rural society.
Case Example:
In Andhra Pradesh, NABARD-supported SHGs enabled thousands of women to start micro-enterprises, reduce poverty and escape moneylenders’ traps.