Self Help Groups (SHGs) involving rural poor occupy a crucial role in bringing financial services to the poor at their doorstep and also in the process of women-empowerment. The SHG movement has crossed several milestones with enduring results. Today more than 3 million SHGs are linked with the formal financial system in the country.
Being a major player in microfinance, National Bank for Agriculture and Rural Development (NABARD) has already played a role by organising more than 3 million credit linked SHGs in the country and considering the emerging role of the SHG federation and their value addition to SHG functioning and to smoothen the process of promotion of SHG federation, NABARD has now come out with policy guidelines to provide support to SHG federations. The federations can avail support from NABARD for their various activities.
At present, SHGs are in the process of transition where they have become quite mature to enter higher level of group dynamics involving economic processes like micro enterprises. The stakeholders felt that there are certain areas where SHGs have limitations and need wider support at macro and micro level. To put forth various issues, the stakeholders working with SHG Bank Linkage Programme have started federation SHGs.
Particularly the state governments came forward to support promotion of SHG federations by issuing guidelines to address issues through empowering the SHGs and making them more self-reliant. Various States like Andhra Pradesh, Tamil Nadu, Orissa, Karnataka, West Bengal have already launched their schemes to support SHG federations.