What makes the microfinance movement in India unique is the active involvement of formal financial institutions in providing essential financial services to the poor by establishing links with informal groups as clients. These institutions have supported the self-help group (SHG) programme,1 innovated and initiated by the National Bank for Agriculture and Rural Development (NABARD), by providing microcredit to, and encouraging the habit of making small savings among, the financially deprived. The SHG scheme is not just a mechanism of financial intermediation but also a unique process of socio-economic engineering (Kropp and Suran 2002). The members of each SHG are given the opportunity to participate as equals in deciding the future course of action to achieve their desired objectives (Kanitkar 2002; Tiwari and Fahad 2004). Along with increasing financial access, the SHG movement also supports women empowerment and furthers other developmental goals related to education, health, family planning, and access to land and water.
The programme has achieved many milestones since its inception (NIRDPR 2019). It has successfully created livelihood opportunities for the rural poor; this has further attracted the involvement of many financial players. The SHG movement has made great strides in the fields of women empowerment and socio-economic development.2 However, with the expansion of the programme in different parts of the country, some concerns have also entered the picture. Two major problems for the movement are regional disparities and the rising share of non-performing assets (NPAs) in SHG loans in banks.
Dear Reader,
Or
To gain instant access to this article (download).
Pay
INR 236
(Readers in India)
Pay
$ 12
(Readers outside India)
