A Self-Help Group (SHG) is a village-based financial intermediary committee usually composed of 10–20 local women or men. In most cases, mixed groups are generally not preferred. Self-Help Groups in India play an important role in promoting savings habits, financial support, and social empowerment among rural communities. Although SHGs are found in several countries, they are especially widespread in India, as well as in other parts of South Asia and Southeast Asia.
Members of a Self-Help Group contribute small regular savings over a period of a few months. Once sufficient capital is accumulated within the group, the amount is used to begin lending activities. These funds may be lent to group members or to other people in the village for different purposes such as agriculture, small business, education, healthcare, or household needs. This system encourages mutual support, financial discipline, and community-based development.
In India, many SHGs are linked with banks for the delivery of micro-credit, which helps members access formal financial services without depending entirely on traditional money lenders. The SHG–Bank Linkage Programme has become an important model for financial inclusion, especially for women in rural areas. It supports income generation, self-employment, poverty reduction, and overall rural development by empowering members economically and socially.
Keywords: Self-Help Group (SHG), Financial Inclusion, Micro-Credit, Rural Development, Women Empowerment, SHG–Bank Linkage Programme
