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MoRD and MoMSME to boost SHG women enterprises
Context: Ministry of Rural Development (MoRD) and Ministry of Micro, Small and Medium Enterprises (MoMSME) to collaborate on formalising and strengthening Self Help Group (SHG) women-led rural enterprises.
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- The purpose is to formalise and strengthen SHG women-led rural enterprises.
- Focus is on leveraging MoMSME’s flagship schemes such as Yeshaswini- Apna Udyam, Apni Pehchaan, Udyam Assist, etc.
- It aims to support the empowerment of Lakhpati Didis, aligning with the Prime Minister’s vision.
Self Help Groups (SHGs)
- Self Help Groups (SHGs) are small informal groups of people, often from low-income backgrounds, who unite to tackle common challenges.
- They support each other, encourage savings deposited in a common bank fund, and provide small loans.
- The ideal size for an SHG is 10 to 20 members to ensure active participation; legally, informal groups should not exceed 20 members.
- India’s women-led SHGs constitute the world’s largest microfinance initiative, totaling nine million groups and nearly 100 million members.
- On average, there are 14 SHGs per village, and about one in every eight Indian women is part of an SHG.
- Banks predominantly use the SHG model for lending, facilitated by NABARD’s efforts in promoting SHG-Bank linkages.
- In contrast, microfinance institutions (MFIs) mainly employ Joint Liability Groups (JLG) for lending.
Joint liability groups (JLGs):
- It is an informal group of 4 to 10 individuals seeking bank loans either individually or collectively, providing mutual guarantee.
- Members engage in similar economic activities in farming or non-farming sectors, offering joint undertaking to banks to facilitate loans.
- Objective: Increase credit access for farmers, including small, marginal, tenant farmers, and sharecroppers, through collateral-free loans.
 Difference between SHG and JLG
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