SHGs and Development in Odisha

Self Help Groups (SHGs) are informal associations of people who come together to improve their standard of life In Odisha, six lakh SHGs are functioning and around 70 lakh women involved in SHGs with 5000 crores saving and 2000 crores annual bank exposure.

Odisha government has announced zero percent interest loan for Self Help Groups under the Mission Shakti scheme of state Govt. introduced for women’s financial inclusion and development. Mission Shakti was launched in 2001 as project aiming economic empowerment of women through Self Help Groups and providing them bank loans at low interest for livelihood opportunities SHGs represent a unique approach to financial intermediation through

  • Initiating and maintaining savings within the group
  • Lending loans to the members
  • Solving common problems
  • Availing loans ( institutions like NABARD, SIDBI, HDFC, Commercial Banks, RRBs and DCCB are involved in extending micro finance service in the state)

The SHGs play multiples roles in the developmental process. some of these are as follows:

Poverty Alleviation: The formation of SHGs has helped the members save a part of their income. SHGs in recent years have been participating in different social movements and agitations. In Odisha, Self-Help Group has emerged over the last decade as one of the fastest growing and most promising interventions addressing the issues of women’s development and poverty alleviation. It has increased its assets, income, and generated employment opportunities. There has been a significant shift in the use of loans for personal use to them being used for income generation. The cumulative savings of the members had made them financially stable. This has helped them come out of the vicious circle of poverty and unemployment.

Financial Inclusion: Microfinance helps the SHGs access formal institutions like the banks both for saving and securing loans. The members of the SHGs are thus able to minimize their dependence on money lenders. Thus, SHGs can help achieve the goal of financial inclusion in rural India.

Human Resource Development: The financial stability of the members encourages them to spend more on the education of their children. The financial stability has led to lower child mortality, improved maternal health, good nutrition, housing, and health – especially among women and children.

Women Empowerment: Self Help Groups as a mode of empowering people became popular in the present. SHGs are informal associations of people who come together to improve their standard of life. They help to build social capital among the poor, especially women. The contribution of women to household income has increased. It gave them better control over the decisions that affect their lives. The Expenditure on girl education in member households has also increased.

                     In addition to these activities , SHGs have also involved themselves into various developmental activities like supervising the Mid-Day meal Scheme, monitoring the delivery of goods through the Public Distribution System (PDS), maintaining cleanliness , marketing the product of Self-Help Groups and spreading awareness in the society.

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