Why are the Self Help Groups (SHGs) in Decline? A Case Study of SHGs in Gurgaon

Abstract

Microfinance is a revolutionary movement targeted to provide credit to the poor. Self Help Group’s (SHGs) have had a record of success, but they are gradually losing their significance as a source of loans to the poor. This paper analyses the reasons for the decline of SHGs as a source of funds to the poor. It is based on a case study of 30 SHGs in Gurgaon district. The study suggests that the SHGs in Gurgaon lack cohesion; the membership of the groups is non –homogenous in terms of caste, income and occupational background. Our analysis also suggests that the SHGs do not conform to the guidelines laid out by NABARD. Some of the problems associated with the SHGs could be mitigated with much more active and elaborate involvement of the NGOs than that appears to be the case.

Keywords: Self Help Group Promoting Institutions, Microfinance Institutions, Sustainability, Growth.