Introduction

In order to uplift the status of the people who are under poverty line
the government has started a program called Self help groups
.SHG’S helps to achieve rural development and poverty alleviation.

Self help affinity groups are the appropriate people’s institutions of

the poor which provide the space for the members to develop a
livelihood strategy and to acquire the skills and confidence to
initiate change in themselves, in their relations at home and in
society and linkages with other institutions. SHG’S also helps to
them in getting the loans from governments with a very nominal
rate of interest

In the initial years, they take many small loans for

food and health, but gradually the loans are for
income generating activities of several types; they
also become larger. There is also a trend that as loans
get larger, the number of activities gets reduced.
After 8 years or so the trend of the purposes of loans
is off farm including getting a Government job. It is
also clear that each family has a different set of
livelihood activities

The SHG’S are very much famous in the country most

of the micro finance is generated trough these self
help groups under this all sections of the people are
willing to form as a group and getting loans from the
government the famous groups are DWCRA groups
and Rythu Mithra Groups.

FORMATION OF SHG’S

While forming a group, they drew up criteria to select

members or reject others. During focus group
discussions, most of the groups reported that they
considered the following criteria while selecting /
rejecting members.

Criteria Inclusion Exclusion

Geographic Preference to Low

aspects women preference to
staying women
in the same staying in
street, area, other streets,
locality and village
areas and
villages
Economic Poor, but can Rich/non-
aspects mobilize poor; regular
savings and job
pay loan holders;
installments those who
regularly; can't or
same will not save
livelihood activity
and pay loan
 installments
regularly
Group relatedCan/willing to Unwilling to
attend group attend
meetings meetings
regularly; regularly;
Willing to Not willing to
respect group respect group
norms/proced norms/
ures; procedures
Number
restricted to
20
IMPACT OF SHG’S

Impact on Member’s Financial Status

In terms of changes in their financial status, most members (94%) reported a
clear improvement in their savings habit, and 89% reported satisfactory to
good availability of credit. So, too, a high 84.5% reported increase in income
level. Members felt that employment opportunities continued to be a
problem with more than half reporting either no change, or insignificant
improvement on this front.
 Member perception of change in financial status

Insignificant improvement

Significant Improvement
Noticeable Improvement

Change for Worse

No Change
Issues
S. No.

1 Income level 4.3 11.0 70.5 14.0 0.3

2 Credit availability 2.3 8.3 69.0 20.0 0.5

3 Access to formal institutions 6.0 16.3 67.5 10.3 0.0

4 Habit of saving 1.8 3.8 51.8 42.3 0.5

5 Access to pro-poor programme 17.0 26.3 43.8 12.5 0.5

6 Expenditure on food 29.5 19.0 43.3 6.5 1.8

7 Freedom from money-lenders 7.0 11.3 42.3 17.0 22.5

8 Employment 20.3 32.5 34.5 12.8 0.0

Improvement in Income and Employment

Most members reported an improvement in their income level, even with the
very first loan from the bank, although around 19% reported either no change
or insignificant change, or, change for the worse. By the 3rd linkage, however,
all reported significant increase in income. What was surprising was that by
the 4th and 5th linkages, there was a reversal of this perception, with nearly
17% reporting little change because of the linkages. One possible explanation
could be that the increasing size of loan was felt to be a burden.
 Linkages and improvement in income1

No. of linkages
Amount of
Total SHGs
change
1st 2nd 3rd 4th & 5th

No change 5.8 3.9 -- -- 4.3

Little change 13.0 10.9 -- 16.7 11.0

Moderate to significant 80.8 85.3 100.0 83.3 84.5

Change for worse 0.5 -- -- -- 0.3

Total 100.00 100.00 100.00 100.00 100.00

Impact on Members’ Social Status

On decision-making power, self-confidence, leadership, self-reliance, and

group solidarity, member perception was that there was clear change for the
better. However, 43% of members said that there was either no change, or
insignificant improvement in their health status. There were similar responses
to change in education level and in their participation in federations.

Member perception of change in social status

1
 Insignificant improvement

Significant Improvement
Noticeable Improvement

Change for Worse

No Change
Issues
S. No.

1 Decision making power 3.3 11.3 68.5 17.0 0.0

2 Self-confidence 3.5 7.3 61.5 27.3 0.5

3 Leadership qualities 3.0 17.5 60.5 19.0 0.0

4 Self reliance 4.8 13.8 58.3 22.8 0.5

5 Group solidarity 2.5 11.3 55.3 30.3 0.8

6 Health status 14.0 29.0 49.3 7.5 0.3

7 Representation in other groups 32.5 17.0 43.0 6.8 0.8

8 Education level 17.8 39.8 38.3 4.3 0.0

Case study

MEMBERSHIP IN SHG’S
Sl.No. Name of the No. Total
Village of SHGs Members

1. MEDAK DIST 6 130

 2. RANGA REDDY 14 138
DIST

Total 20 268

Sl.No. Age Group No. of respondents

1. Less than 20 12
2. 20-30 60
3. 30-40 64
4. 40-50 72
5. 50-60 36
6. Above 60 24
Total 268

MEDAK DISTRICT

Reasons for Joining SHGs

Sl. Reasons No. of Percentage
No. respondents
1. For getting loan 58 43.28
2. For promoting 20 14.92
savings
3. For social status 40 32.84
 4. For other reasons 12 8.96

Total 130 100.00

BEFORE JOINING SHG’S

Sl. Monthly Income Rs. No. of Percentage

No. Respondents
1. Less than 1000 16 11.95
2. 1000-2000 25 18.66
3. 2000-3000 40 31.34
4. 3000-4000 4 2.96
5. 4000-5000 10 7.46
6. 5000-6000 5 3.75
7. Above 6000 2 1.49
8. Non-earning 28 22.39
members
Total 130 100.00

AFTER JOINING SHG’S

Sl. No. Monthly Income Rs. No. of Respondents Percentage

1. Less than 1000 5 3.73
2. 1000-2000 26 19.40
3. 2000-3000 45 33.58
4. 3000-4000 14 10.45
5. 4000-5000 33 24.63
6. 5000-6000 6 4.48
7. Above 6000 3 2.23
8. Non-earning members 2 1.49
Total 134 100.00
RANGA REDDY DIST

Reasons for Joining SHGs

Sl. No. Reasons No. of respondents

1. For getting loan 62

2. For promoting savings 22

3. For social status 40

4. For other reasons 22

Total 138

BEFORE JOINING SHG’S

Sl. No. Monthly Income Rs. No. of Respondents

1. Less than 1000 10

2. 1000-2000 31
3. 2000-3000 43
4. 3000-4000 5
5. 4000-5000 12
6. 5000-6000 4
7. Above 6000 3
8. Non-earning members 30
 Total 138

AFTER JOINING SHG’S

Sl. No. Monthly Income Rs. No. of Respondents Percentage

1. Less than 1000 5 3.73
2. 1000-2000 26 19.40
3. 2000-3000 45 33.58
4. 3000-4000 14 10.45
5. 4000-5000 33 24.63
6. 5000-6000 6 4.48
7. Above 6000 3 2.23
8. Non-earning members 2 1.49
Total 134 100.00

ACHIEVEMENTS

MEDAK DIST

 Banjara garments
 soft toys etc.
 Candle and agarbatti making

RANGA REDDY DIST

 Washing Powder --- “Rashmi” Washing Powder.

 Detergent Powder --- “Super bright” detergent
powder.
 Cleaning Powder --- “Wonder Clean”
 Leaf-plate making & dress designing

CONCLUSION

 It is found that the income of the women has

been increased after joining the SHGs.
 The good practice of the SHGs in the study
area is repayment of the loan in time.
 It is observed that people are able to save
some amount of money after joining SHG’S
 The standard of living has been increased and
they are able to produce different goods
 Thus micro finance is a tool for poverty
alleviation