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♤ Evolution of SHGs as a tool to empower is as long as the history of development sector in India. SHG as an organized way for poverty eradication was immerged during the 7th Five Year Plan (1985-90).
♤ Formation of SHGs for savings and credit, and their linkage to commercial banks was initiated in India by MYRADA (Mysore Resettlement and Development Agency), an NGO, in the mid-1980s.
♤ However, SHGs as a tool to address poverty became significant only when the Reserve Bank of India (RBI) issued a circular in 1992 to link about 500 groups under the NABARD-SHG bank linkage pilot program.
♤ This success has led to mainstreaming of SHGs into the financial landscape and especially the Indian banking system, with about 94 million poor linked with banks through 7.5 Million SHGs, availing them of collateral free credit.
♤ The poor women of these SHGs in India collectively control the financial business with an annual turnover of Rs 100,000 crores ($17 Billion), much larger than many multi-national corporations in India.
♤ Simultaneously, a handful of large Indian NGOs have demonstrated that collectivization can lead to social and economic empowerment of the poor in the areas of health, bridging caste divides and gender inequalities.
♤ As a part of the poverty alleviation measures, the Government of India launched the Swarnjayanti Gram Swarozgar Yojna (SGSY) in April, 1999 where the major emphasis is on SHG formation, social mobilization and economic activation through micro-credit finance
♤ This success led to the genesis of a massive community mobilization initiative by the Government of India as National Rural Livelihoods Mission (NRLM) in 2011.