Microfinance and Self-Help Groups (Shgs): A Study on Women’s Economic Empowerment in India

Abstract

Microfinance and Self-Help Groups (SHGs) have emerged as core strategies for promoting women’s economic empowerment in India. The SHG–Bank Linkage Programme (SHG-BLP), led by NABARD and DAY-NRLM, today represents one of the world’s largest microfinance initiatives, covering millions of rural poor households, with an overwhelming share of groups formed exclusively by women. This paper examines the role of microfinance and SHGs in enhancing women’s access to credit, savings, income-generating activities, asset creation, financial inclusion, and decision-making power within households and communities. Drawing on secondary data from government reports, impact evaluations, and recent empirical studies, the paper analyses how SHG participation affects income, employment, savings, asset ownership, mobility, and socio-political participation. Evidence from multiple states shows that SHG-based microfinance significantly improves women’s income, financial inclusion, self-confidence, and bargaining power, though challenges remain in terms of over-indebtedness, unequal group performance, limited financial literacy, and persistent gender norms. The paper presents conceptual tables and diagrams on empowerment pathways and concludes with policy suggestions for strengthening SHGs as vehicles of inclusive and sustainable development. Findev Gateway+23ie+2