To join or form a Self-Help Group (SHG), you typically need to gather a small number of people from a similar socioeconomic background who share a common purpose. In India, government programs like the National Rural Livelihoods Mission (NRLM) promote and support the creation of SHGs, primarily for women. Non-governmental organizations (NGOs) also act as facilitators.
Steps to join or form an SHG
- Find a facilitator. To start the process, connect with local facilitators or “animators”. These can be representatives from:
- A local Block Development or Panchayat Office.
- A government scheme, such as NRLM.
- A local NGO or community-based organization.
- A staff member from a commercial, regional, or cooperative bank.
- Gather interested individuals. Discuss the idea with others in your village or neighborhood who share a similar economic background and are motivated to collectively improve their living conditions. A typical SHG consists of 10 to 20 members.
- Hold initial meetings. Start holding regular meetings (weekly or monthly) to build trust and discuss the group’s shared concerns. During these meetings:
- Identify the group’s purpose, such as tackling a specific problem or engaging in a particular income-generating activity.
- Decide on the group’s name and appoint office bearers like a president, secretary, and treasurer.
- Begin regular savings. All members must agree to save a fixed, regular amount of money, which is pooled into a common fund. This promotes financial discipline and creates an internal lending source.
- Open a bank account. Once the group is formed and the rules are established, open a joint savings bank account in the name of the SHG. This can be done by submitting a resolution and a list of authorized members to a local bank.
- Maintain records. For the SHG to function properly and eventually qualify for bank loans, it must maintain up-to-date books of accounts, including attendance registers, minutes of meetings, and financial records.
- Qualify for external assistance. After being active for at least six months and following the “Panchasutras” (regular meetings, savings, inter-loaning, timely repayment, and bookkeeping), the SHG can become eligible for loans and other benefits from banks or government schemes.
General membership rules
- Voluntary: Membership is voluntary, driven by the desire for mutual support.
- One per family: Generally, only one person per family can join a specific SHG, which ensures that more families can participate.
- Homogeneity: Groups are typically composed of people with similar social and economic backgrounds to foster trust and open communication.
- Women-centric: Many SHGs, especially those supported by government programs, are women-only and have demonstrated high rates of success.
