Opinion | Empowering Communities: The Role of Self-Help Groups in Building Financial Independence

Grassroots Women Changing Household Economics

In the toughness of villages where dreams are stitched with hard work and silence, a powerful voice of small circles screamed, not that grand, not that bright, but with the resilience to fight.

From whispers born of hidden pain, they turned a wheel of fate around; their silence once, now voices sound.

They craft their songs of strength again, the Self-Help Groups, small yet confident.

India’s population is around 1.43 billion, with about 63% living in rural areas. The Self-Help Groups (SHGs) are community-based groups consisting of 10 to 20 members, mostly from similar socio-economic backgrounds. They are primarily formed to promote financial independence, mutual support, and social inclusion — most often among rural women. In a country where the rural population forms the backbone, SHGs have become a powerful means of poverty reduction and community development.

Connection with Microcredits

These groups are directly connected to microcredits and small loans. Members provide money to a common pot, which can then be used by that group to make internal loans, when members need money for personal or productive purposes. This small but powerful system gives women access to money without relying on moneylenders.

The fundamental idea behind this strategy is to give credit to underprivileged women without making them follow complicated processes. As a group builds up savings, its members can be connected to banks through the National Bank for Agriculture and Rural Development’s (NABARD) SHG–Bank Linkage Program. Through outreach, what began as a pilot program with 500 SHGs in 1992–1993 has expanded to become the world’s largest microfinance program.

Government and Institutional Support

To support SHGs, the government has taken a number of actions. With a focus on generating income and promoting rural entrepreneurship, several of the sub-schemes go by names like Deendayal Upadhyaya Grameen Kaushalya Yojana, Start-Up Village Entrepreneurship Programme, and Mahila Kisan Sashaktikaran Pariyojana. The Ministry of Rural Development’s flagship initiative, the National Rural Livelihood Mission (NRLM), was created by reorganizing the Swarna Jayanti Gram Swarozgar Yojana (SGSY) with an emphasis on reducing rural poverty.

The UMEED Scheme in Jammu & Kashmir

On February 10, 2013, the JKRLM introduced the UMEED program in Jammu and Kashmir with the goal of improving access to Self-Help Groups (SHGs) for about 9 lakh rural women in the 22 districts of J&K.

• There were 80,500 SHGs formed in total.

• Covered households: 6.2 lakh; 285 blocks intervened; capitalization: ₹347.03 crore; credit linkage: ₹1320 crore

Women’s organizations have emerged under UMEED in a variety of fields, including saffron farming, walnut production, rajma and black cumin cultivation, and the production of products like soaps, lemon grass oil, and lavender oil. SHG members have set up a bakery in the Ganderbal district, and women in Kakapora and Shopian are empowering themselves by beekeeping and supplying almonds. These pursuits have transformed formerly dependent women into wage earners and have become a lifeline.

Collaboration with NABARD and NRLM

The National Bank for Agriculture and Rural Development (NABARD) has played a key role in promoting the SHG movement across India. It serves as a connection between banks and communities. In J&K, SHGs receive support from the Deendayal Antyodaya Yojana, which is part of the National Rural Livelihood Mission (DAY-NRLM), as well as from MGNREGA. These initiatives aim to improve financial inclusion and promote sustainable livelihoods. DAY-NRLM helps organize and support economically disadvantaged women by forming SHGs. The goal is to engage them in productive activities and increase their income levels.

Impact

The unions grant money, support savings, and uplift the standard of living, primarily with the help of the collective decision-making and governance practices, besides satisfying the requirements of the oppressed communities.

The families of women in the SHGs have received financial support and have made a start in changing their economies: providing education for their children, treating them better and buying land. SHGs are gradually altering the economic situation of the grassroots communities.

Stories of Change

Ishrat Hassan from Pulwama took the opportunity offered by the UMEED scheme and started her own business. She is a steady earner, which enables her to pay home expenses and support her children’s education, thus the financial independence has shown its power in securing and stabilizing families.

Hamida Bano from Kulgam transformed her SHG into an income-generating asset by selling homemade products. She is now working on improving her family’s living conditions, paying off debts, and has gained enough confidence to lead other women in her village.

Shaheena Bano from Shopian did not hesitate and went for beekeeping. As a part of the UMEED scheme, she started her production and sale of honey. Her prosperous business increased her household income and motivated a bunch of women with similar aspirations to start their own SHG for the purpose of empowering others in the society. Each of these women, who were previously silent contributors in their families, has now become an active earner in the family and has a positive influence not only on their families but also on the community as a whole.

Conclusion

Self-Help Groups have emerged as a movement of resilience and transformation. They are not just financial collectives — they are engines of change. From rural corners of Kashmir to villages across India, women have built their own paths to independence. Through SHGs, microcredit, and schemes like UMEED and NRLM, grassroots women are changing household economics — and, in doing so, are empowering entire communities.

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