Impact Analysis of SHGs in the Urban Milieu: A Case Study

Abstract

Self-Help Groups (SHGs) are considered important delivery channels for providing group loans under various poverty alleviation programmes by the government and for spreading various awareness programmes by the non-governmental bodies such as NGOs. In India, the National Bank for Agriculture and Rural Development (NABARD) piloted a microfinance programme in the mid-eighties using self-help groups to alleviate rural poverty. This initiative snowballed into a movement, and the government, non-governmental bodies, and microfinance institutions started using self-help groups for implementing various programmes for the poor. Microfinance is generally perceived as a rural phenomenon in India. This study attempts to examine the socioeconomic impact of microfinancial activities of self-help groups on their members in an urban area - Thane city in Maharashtra. The study uses sample survey data of 340 women respondents belonging to self-help groups supported by the Thane Municipal Corporation (TMC), NGOs, and non-affiliated self-help groups. It indicates that microfinancial activities of self-help groups in the urban milieu lead to desirable socioeconomic impact on members. Findings of this study may have implications for agents in the area of microfinance - the Government, the NGOs, microfinance institutions, banks, consumer goods making companies, and members of the self-help groups.