The basic idea behind the formation of SHGs is to create self-employment for the poor, particularly rural poor woman. Self-help groups act as community for setting up goals like women empowerment, leadership development and skill enhancement among the poor. It also aims at increasing school enrolments, improving overall health by providing nutrition and the use of birth control methods to curb population. In countries like India, SHGs bridge the gap between high-caste & low-caste members. They also provide timely loans at a lower interest rate without collateral.
Thus, the main objectives of the SHGs are:
To organize rural poor especially women into small Self Help Groups. A typical SHGs has 15-20 members.
To accumulate savings of their members.
To provide loans at reasonable interest rate without collateral.
To provide timely loans for various needs of the people.
To provide loans at easy terms and flexible payment schedule.
Provide a platform to discuss and act on a variety of social issues such as education, health, nutrition, domestic violence etc.
