UPSC CSE – SYLLABUS: GENERAL STUDIES-3– Welfare schemes for vulnerable sections of the population by the Centre and States and the
performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

Self Help Groups – Programmes & Issues

Self – Help Group Programmes:

Some of the way in which SHGs have played significant role in self-employment of poor can be enumerated as:

Some of the problems associated with the model of SHG micro-finance in India.

1. Ignorance of Members/Participants:

Even though the authorities take measures for creating awareness among the group members about the schemes beneficial to them, still majority of the group are unaware of the schemes of assistance offered to them. Many are Ignorant about the scheme.

2. Inadequate Training Facilities:

The training facilities given to the members of SHGs in the specific areas of product selection, quality of products, production techniques, managerial ability, packing, other technical knowledge ate are not adequate to compete with that of strong units.

3. Problems Related with Raw Materials:

Normally each SHG procures raw materials individually from the suppliers. They purchase raw materials in smaller quantities and hence they may not be able to enjoy the benefits of large scale purchase like discount, credit facilities etc.

Moreover, there is no systematic arrangement to collect raw materials in bulk quantities and preserve them properly. There is no linkage with major suppliers of raw materials. Most of the SHGs are Ignorant about the major raw material suppliers and their terms and conditions. All these causes high cost of raw materials.

4. Problems of Marketing:

Marketing is an important area of functioning of the SHGs. However they face different problems in the marketing of products produced by them.

Following are the major problems relating to marketing.

5. Lack of Stability and Unity Especially among women SHGs:

In the case of SHGs dominated by women, it is found that there is no stability of the units as, many married women are not in a position to associate with the group due to the shift of their place of residence. Moreover, there is no unity among women members owing to personal reasons.

6. Exploitation by Strong Members:

It is also observed that in the case of many SHGs, strong members try to earn a lion’s share of the profit of the group, by exploiting the ignorance and illiterate members.

7. Weak Financial Management:

It is also found that in certain units the return from the business is not properly invested further in the units, and the funds diverted for other personal and domestic purposes like marriage, construction of house etc.

8. Low Return:

The return on investment is not attractive in certain groups due to inefficient management, high cost of production, absence of quality consciousness etc.

9. Inadequate Financial Assistance:

It is found that in most of the SHGs, the financial assistance provided to them by the agencies concerned is not adequate to meet their actual requirements. The financial authorities are not giving adequate subsidy to meet even the labour cost requirements.

10. Non-co-operative Attitude of the Financial Institutions:

The Financial Institutions do not consider SHGs seriously while providing finance and other help.

11. Inadequate and ill-trained staff to meet the challenges:

The attitude of the staff of the rural development department is not encouraging. They are not well trained to accept the challenges and equip the SHGs self-reliance.

12. Inadequate Support from Line Department:

For obtaining assistance and support, the group members have to approach the line officers. However the line officers are not co-operative with the SHGs. This will hamper the very objective of the schemes.

Suggestions to Minimize the Problems Faced by SHGs:

The following suggestions are offered to minimize the above mentioned issues of SHGs:

  1. Information about locally available materials and their varied uses should be disseminated to SHGs. Proper encouragement and training should be given to them to make innovative products by using these materials. In order to have a knowledge base about the availability of materials, in panchayat levels, surveys can be conducted under the auspices of local authorities.
  2. In order to solve the various problems relating to marketing of SHGs, the state level organisations should extend the activities throughout the state instead of limiting its operations in a particular area.
  3. Various SHGs functioning in a particular panchayat area can form a co-operative society. This society may be entrusted with the task of marketing the products of different SHGs under a common brand name. Further, the society can undertake sales promotion activities and procure rare raw materials for the benefits of member SHGs.
  4. Non-Government Organisations (NGOs) can play a significant role in empowering women entrepreneurs by providing basic education, motivation training, and financial help and so on.
  5. All the members in the SHGs may not have the same caliber and expertise. NGOs can identify the inefficient members of the group and can impart proper training to them in order to make them competent. For this purpose, short term training programmes can be arranged at the panchayat level.

Frequent awareness camps can be organised by the Rural Development department authorities to create awareness about the different schemes of assistance available to the participants in the SHGs.

In the emerging changes in the values and attitudes of the members of the SHGs are a clear manifestation of socio-economic empowerment interventions yielding relatively quicker results. The socio-economic programmes reinforce each other and promote all-round development of the children, the women, the households and the communities.

It is a process which ultimately leads to self-fulfilment of each member of the society. It is in this direction that SHGs are moving towards fulfilling their objectives with a meaningful strategic direction.

SOURCE:” Hindustan Times.”


Evaluate the Self Help Groups programmes taken by the government so far. Analyse the issues faced by the SHG’s. What measures would you suggest to overcome them?