E-commerce platform for Self-Help Groups

• Government will create an e-commerce platform to ensure a huge market in the country and abroad for their products.
• More than eight crore women in the villages are associated with Self-Help Groups and they design top-end products.
• The appeal of ‘Vocal for Local’ will get a boost through this digital platform.

Self Help Groups

• Self-help groups (SHG) are village-based initiatives, where members regularly save up in order to start lending once the group collected enough money.
• Often from a homogenous economic and social backgrounds, they have the common goal to pool their resources in order to fund common or individual projects, ensuring financial stability and repayment.
• This kind of solidarity lending was often triggered by NGOs, organising poor communities in rural areas of India, triggering social and financial support.
• This micro-finance and self-managed model is often the first step to financial inclusion through the participation of the community.
• SHG is an informal group and registration under any Societies Act, State cooperative Act or a partnership firm is not mandatory.

Functioning of SHGs

Size of the SHG

• The ideal size of an SHG is 10 to 20 members.
• Also, legally it is required that an informal group should not be of more than 20 people.
• The group need not be registered.

Membership

• From one family, only one person can become a member of an SHG. (More families can join SHGs this way.)
• The group normally consists of either only men or of only women. Mixed groups are generally not preferred.
• Members should have the same social and financial background.

Meetings

• The group should meet regularly.
• Ideally, the meetings should be weekly or at least monthly.
• Advantage: They become closer, if they meet regularly. This helps them to understand each other’s difficulties better.
• Compulsory attendance: Full attendance in all the group meetings will make it easy for the SHG to stabilise and start working to the satisfaction of all.

Major Functions of an SHG

Savings and Thrift:

• All SHG members regularly save a small amount.
• The amount may be small, but savings have to be a regular and continuous habit with all the members.
• “Savings first — Credit later” should be the motto of every SHG member.

Internal lending:

• The SHG should use the savings amount for giving loans to members.
• The purpose, amount, rate of interest, schedule of repayment etc., are to be decided by the group itself.
• Proper accounts to be kept by the SHG.