Evaluating the impact of self help groups (SHGs): Evidence from India

Abstract

Microfinance has become a central part of poverty alleviation and women empowerment in India and across the globe. In India, villages are faced with problems related to poverty, illiteracy, lack of skills health care etc. because of low income. Credit constraints among the poor are one of the key reasons for absence of income generating activities. This has been well documented in the literature. The Reserve bank of India issued guidelines to all nationalized commercial banks encouraging them to lend to informal groups without collateral, which came to be called Self-Help Groups (SHGs). Though SHG has become an integral part of the Indian microfinance sector, there has not been enough evidence to look into the returns of joining a SHG as compared to other women in the same village who are not part of SHGs