Self Help Groups in the Developing Countries: A Sociological Perspective

This paper examines the development of self-help groups (SHGs) in Europe and their relevance to developing countries.

People in Europe and the U.S. form SHGs to fulfil a need that is not met by existing social and welfare services. In these countries, SHGs operate with considerable flexibility in interest rates, terms of loans, repayment and security norms. Their operations are not constrained by rigid norms. The paper states that:

• SHGs need a basic enabling environment and a functioning basic welfare system in order to function;
• SHGs cannot be expected to develop as a consequence of self-help in socio-economic welfare;
• Transferring a western, individualistic concept to the very different societal context of developing countries will bring disappointing results;
• Such a transfer might further shift the responsibility of the State to the individual, which would have serious implications for equity and justice.

The microenterprise concept should be coordinated with the SHG system, so that people who have been deprived of credit could have their fair share of it. SHGs can play an important role in solving social problems, promoting education, generating employment, and making people aware of problems and solutions.