SHGs have achieved remarkable success in empowering rural masses, especially women, socially and economically. In fact, the government has been encouraging the micro-finance based model of poverty eradication. E.g. National Rural Livelihood Mission. However, the prevailing model of SHG micro-finance in general and women SHGs, in particular continue to face a myriad of problems.
Problems faced by women SHGs:
(A) Women have little financial independence at home. Therefore, women SHGs often fail to augment their collateral corpus adequately. This makes banks reluctant to finance projects lead by such SHGs.
(B) Given the patriarchal notions of the Indian society, women SHGs are perceived with contempt and suspicion.
(C) Low literacy levels in rural areas, especially so among women, proves to be a major barrier. Makes it difficult for them to not only gather information but also market their product effectively.
(D) Above-mentioned reasons force many women SHGs to middlemen, leading to their exploitation.
(E) Enormous workload on women, especially on account of their familial obligations, results in poor productivity of women SHGs.
Coming to the SHG micro-finance model for poverty alleviation, following concerns remains:
(A) Many a times, SHGs are dominated by the elite among the rural poor. This could lead to alienation of the real beneficiaries.
(B) SHGs don't often follow need-based loan disbursal for the money from the SHG account is usually equally distributed among all members => differential credit needs of the group ignored
(C) Model hardly focuses on investment potential and improvement of skill levels of the borrowers - making credit available is not a panacea to rural problems.
(D) SHG model has not been used by members to push themselves up the economic ladder. Focus of this model remains on financial inclusion and fails to tap the entrepreneurial spirit of borrowers.
No doubt that the model has successfully inculcated financial training and discipline among rural poor, more needs to be done to make this model a true harbinger of prosperity at the grass-roots level.
