Regular savings, collective decision-making, and a common fund — the grassroots institution that everything else in rural development builds on.
The formation and strengthening of Self-Help Groups (SHGs) is an important approach to improving the social and economic condition of rural households. SHGs encourage individuals, particularly women from economically disadvantaged families, to come together, save regularly, and support one another in addressing financial and livelihood-related needs. Through collective participation, members develop confidence, leadership abilities, decision-making skills, and a greater understanding of financial management.
Regular savings within the group create a common fund that can be used to provide small loans to members during emergencies or for productive activities. As the groups become more organised and financially disciplined, they can establish credit linkages with banks and other financial institutions, reducing dependence on informal moneylenders.
Formation and Capacity Building of WSHGs
Women from similar socio-economic backgrounds are encouraged to come together, form small savings groups, and collectively address their financial and livelihood-related needs. Regular meetings, group savings, internal lending, record maintenance, leadership development, and collective decision-making are promoted to build strong and self-reliant institutions at the grassroots level.
Capacity-building programmes are organised to improve the knowledge, confidence, and management skills of group members and office bearers — covering leadership, financial management, bookkeeping, group governance, communication, entrepreneurship, and livelihood planning.