Re-engineering of self-help group model of entrepreneurship development in rural India

Archit Jain,
Dr. Dhaval Sheth
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In the heartlands of rural India, where aspirations often clash with the harsh realities of socioeconomic marginalisation, the self-help group (SHG) model has long been heralded as a beacon of hope. The SHG initiative, which originated in the early 1980s as a grassroots effort to uplift women and children in rural areas, has since blossomed into a formidable force, with over 90.39 lakh groups mobilising around 9.98 crore women households by 31 January 2024, as per reports from the Press Information Bureau (PIB).

Yet, despite its commendable achievements over the decades, the SHG model finds itself at a crossroads in the face of evolving challenges. A paradigm shift is imperative to navigate this juncture successfully and ensure its continued relevance and impact. It is time for the re-engineering of the SHG model to usher in a new era of rural entrepreneurship and empowerment.

Strengths and shortcomings of SHGs: At the core of the SHG model lies the power of collective action and mutual support. These groups, typically comprising 5-15 members, empower women to pool resources, access credit, and embark on entrepreneurial ventures. However, the journey from financial inclusion to sustainable entrepreneurship is riddled with obstacles.

Reports suggest that challenges persist, even though SHGs have made significant strides in fostering economic independence among rural women. According to recent studies, only a fraction of SHG members actively engage in business activities, often hindered by social pressures and traditional gender roles. Moreover, the prevalence of conventional livelihood options, such as tailoring and artist works, fail to align with market demands, dampening the enthusiasm of SHG members.

Need for reimagining: In light of these challenges, it is evident that a reimagined SHG model is the need of the hour. This transformation entails incremental changes and a holistic re-engineering that addresses systemic gaps and leverages emerging opportunities.

Dr. Ramesh Kumar, a renowned rural development expert, emphasises, “The success of SHGs lies not just in financial inclusion but in fostering a culture of entrepreneurship and innovation among rural women. It's time to shift from a survival mindset to a growth mindset."

Proposed solutions and innovations: The re-engineered SHG model emphasises diversification into the service sector, prioritising market-driven entrepreneurship. Through training and support in emerging areas such as e-commerce, catering, rural tourism, and digital services, SHGs open new avenues for growth and sustainability. Strategic partnerships with corporations, start-ups, and government agencies offer access to mentorship, technology, and market connections, boosting SHG capacity and competitiveness.

Fostering collaboration among SHGs minimises overlap, strengthens market links, and amplifies sales opportunities. An inclusive approach involving the daughters of SHG members enhances technical skills and fosters intergenerational empowerment. Facilitating collaborations between start-ups and SHGs encourages innovation and mutually beneficial partnerships. Establishing centralised SHG centres highlights diverse products, enhances market visibility, and promotes collective marketing strategies, ensuring a prosperous future for women in rural India.

Impact assessment and future outlook: The re-engineering of the SHG model is not just about tweaking existing practices, it is about reimagining possibilities and unlocking the full potential of rural entrepreneurship. By fostering innovation, fostering inclusivity, and embracing market dynamics, the reimagined SHG model has the potential to catalyse transformative change in rural India.

As we embark on this journey of reinvention, let us heed the words of Mahatma Gandhi, who famously said, "The best way to find yourself is to lose yourself in the service of others."

Through collective action, shared vision, and unwavering determination, let us chart a new course for rural entrepreneurship — one where every woman has the opportunity to thrive and every community is empowered to prosper.