Transforming self help groups (SHGs) to successful micro enterprises - the prospects and imperatives

Abstract

The two prime objectives of the Millennium Development Goals are eradication of poverty and attainment of equality of gender. Even though, the world has witnessed an expeditious economic growth in the past, it was unbalanced because the gap between the covered and uncovered primary sectors of the society. This ultimately questioned the sustainability of the growth rate. Now, the global economy is facing recession and it has not reached the gross root levels of the excluded sectors of the society In India, the GDP growth rate has almost touched double digits; whereas the agricultural sector has recorded a growth rate of less than 3%. Therefore, there was a pragmatic shift from farming sectors to non-farming sectors. One of the successful concepts to have emerged in 1990's is the Self Help Groups (SHGs from now on). The emergence of self help groups has created a positive impact with the bankers. Tamilnadu has recorded the second highest growth in SHGs, at all India level, with the number of SHGs crossing 3.65 lakhs, of which nearly 70% are from rural areas. SHGs has helped farmers to come out of the clutches of local moneylenders, to acquire skills such as communication, leadership, financial literac etc. These SHGs are slowly becoming successful micro enterprises with competition from the corporate sector.This paper, a part of the research study undertaken by the authors attempts to analyze the prospects, problems and the requisites of transforming SHGs to successful Micro-enterprises and suggests ways and means for a smooth transition.