Q.16  “Microfinance as an anti-poverty vaccine is aimed at asset creation and income security of the rural poor in India”. Evaluate the role of Self Help Groups in achieving twin objectives along with empowering women in rural India. 

Model Answer:

Introduction

Microfinance has been heralded as a powerful tool in the fight against poverty, particularly in rural India where access to traditional banking services is limited. 

The concept revolves around providing small loans to individuals who lack collateral, with the aim of enabling them to start or expand small businesses, improve their asset base, and secure a more stable income. 

Body

Role of Self Help Groups in Asset Creation and Income Security

• Asset Creationsome text
  • According to the Ministry of Rural Development, as of March 2023, there are over 9 million SHGs in India, with more than 100 million members. 
  • For instance, in Andhra Pradesh, SHGs have been instrumental in facilitating the acquisition of assets like livestock and small-scale agricultural equipment, significantly enhancing the productive capacity of rural households.
• Income security some text
  • According to the National Bank for Agriculture and Rural Development (NABARD), SHGs have disbursed over ₹5,000 crore in loans in the fiscal year 2022-2023 alone.
  • In Bihar, SHGs have supported women in starting small businesses such as tailoring and dairy farming, leading to stable incomes and reduced economic vulnerability.
• Impact on Poverty Reductionsome text
  • A 2022 study by the Indian Council of Agricultural Research (ICAR) found that households participating in SHGs experienced a 20% increase in annual income compared to non-participants. 

Role of SHGs in Women empowerment 

Economic Empowerment

• SHGs encourage women to save and access credit for various needs. This helps in improving their financial stability and enabling small-scale enterprises. some text
  • SEWA is one of the largest and most successful SHG initiatives in India, based in Gujarat. It supports over 2 million women workers by providing them with access to credit, training, and markets. 

Social Empowerment

• SHGs provide a platform for women to participate in decision-making processes and address community issues. This fosters leadership skills and social cohesion.some text
  • In Madhya Pradesh, the "Sakhi Mandals" have been instrumental in addressing local issues such as health and education. 

Political Empowerment

• SHGs have helped women gain political awareness and participate in local governance. They often take active roles in local Panchayats (village councils) and other local bodies.some text
  • In Andhra Pradesh, the "Indira Kranti Patham" (IKP) program has empowered women through SHGs by involving them in local governance and decision-making processes.

Conclusion

"SHGs are pivotal in bridging the economic and social divide, giving women a voice and a stake in their own futures." The success of SHGs in India is a testament to the power of collective effort and grassroots leadership in driving sustainable development and gender equality."

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