what are the basic functions of SHGs?

A self help group is a financial support group that is formed at the village level. It consists of around 15-20 members that meet and save regularly. They pool together their savings until the capital is sufficient to begin lending. The interest charged on these loans is less than what is charged by moneylenders. Regular savings may entitle the group for bigger loans from a bank. These loans are utilised to generate self-employment. Self help groups function as a source of access to micro-credit for women in village. They are also instrumental in ensuring community-based decision making. Self help groups also reduce transactional costs associated with lending.

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self-help group (SHG) is a village-based financial intermediary usually composed of 10–20 local women. Most self-help groups are located in India, though SHGs can also be found in other countries, especially in South Asia and Southeast Asia.

Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the members or to others in the village for any purpose. In India, many SHGs are 'linked' to banks for the delivery ofmicrocredit.

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functions of SHGs are-

i) To senitize women to target area for the need of SHGs and its relevance in their improvement process

ii) To creat group feelings among women

iii) To en hance the confidence and capabilities of women

iv) To develop collective decision making among women

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