As India progresses toward its goal of becoming a $5 trillion economy over the next few years, rural transformation is a foundational pillar driving its growth. Rural India accounts for 68 percent of the country’s workforce, employs 350 million people, and generates over half its GDP. Women, who account for at least 48 percent of the rural population, are also emerging as drivers of growth. Embracing the potential of rural India through inclusive development initiatives not only uplifts the lives of millions, but also fosters a robust and sustainable path towards achieving the nation's ambitious economic and sustainable development goals.
How India’s SHG’s are Driving Rural Transformation
Since the concept of SHGs first emerged in India and was promoted in the early 1990s by various civil society organisations with the support of the National Bank for Agriculture and Rural Development (NABARD) and the Reserve Bank of India, these groups have opened savings bank accounts through the SHG-Bank Linkage Programme, and have emerged as the largest such financial inclusion program in the world. Under the National Rural Livelihood Mission (NRLM), SHGs have mobilized $65 billion in credit from public and private sector banks, and over $5 billion in community savings.
The government has adopted a 360-degree approach, enabling women entrepreneurs by offering them collateral free loans of up to INR 20 lakh and upskilling, which has encouraged them to start new enterprise ventures or upscale and diversify their livelihoods. This has empowered women to move into sustainable, high-value integrated farming, and transition into new areas such as horticulture, dairy, arts and crafts, and textiles.
SHGs are also helping deliver access to banking at the last mile. Since 2016, over 100,000 SHG women have been trained, certified, and deployed as Bank Sakhis or bank agents across the country. They have made steady progress in deepening financial inclusion across India’s villages, taking financial services and products to rural poor, vulnerable and marginalized communities, and giving women access to accident and life insurance products and pension services. This offers them a safety net in times of transition and uncertainty. As of February 2023, these Bank Sakhis had completed 18.98 crore transactions worth more than INR 54K crores.
The cumulative impact of these measures has been transformational on rural communities, enabling women to gain confidence and identity, and play a critical role in making India’s economic growth more inclusive.
Putting the Spotlight on Human Development
India’s focus on human development also makes its self-help groups unique. NRLM approaches this as a ‘human development’ program for the social and economic empowerment of India’s rural women, rather than a welfare program.
In 2019, in an evaluation of the program – one of the largest government program evaluations done jointly by the Ministry of Rural Development (MoRD) and 3ie – women who participated in the program reported a 19 percent rise in income and a 28 percent increase in savings. Their families had higher participation rates for women in the workforce.
The pivotal role these SHGs now play in rural India was also evident during the COVID-19 pandemic. It was these groups who delivered essential goods in Jharkhand, created a large-scale awareness program for Covid appropriate behaviours, managed community kitchens for returnee migrants, ensured large-scale supply of masks and PPT kits to Covid warriors, kept Kerala’s floating markets running, spearheaded Prerna community kitchens in Uttar Pradesh, and facilitated crisis management in remote rural parts of the country.
Enabling Women to Be Drivers of Change
At the Bill & Melinda Gates Foundation, our work is fully aligned with the Government of India’s strategic goals on women-led development. Flagship programs like the NRLM, which are focused on enhancing incomes and deepening the outcomes of women’s entrepreneurship, are playing a critical role at scale. The collective power of women also enables them to fight against harmful social norms and gender-based violence.
We continue to be inspired by the stories of resilience, hard work and ambition of the SHGs and the women, who have emerged as role models for their community.
<span id="callout" class="container-callout" fs-test-element="callout">Life has changed for Geeta Kachlam and the women of her village in Chhattisgarh since they formed a self-help group. Adopting new farming techniques has raised their income from maize farming threefold. Geeta, now a community resource person, trains women in five other villages. “Earlier, I used to believe a woman’s place was in the home,” she recollects. But her old beliefs have been transformed.</span>
<span id="callout" class="container-callout" fs-test-element="callout">Geeta’s experience is echoed by Mahantin, a community resource person trained in livestock management. A new income stream from poultry and goat farming has opened opportunities for Mahantin, the women in her village, and their families. It has changed their sense of self belief and shifted the status quo. “During community events, women were made to sit on the floor, while men above. Now it is opposite,” Mahantin says proudly.</span>
Over the last decade, the SHG platform has played a pivotal role in helping young women like Geeta and Mahantin transform their income, reimagine access to capital and opportunities, and challenge existing paradigms.
Clearly, when women benefit, everyone in the family and society benefits.
As India surges toward its goal of being among the three largest economies in the world, with a GDP of $5 trillion and more by 2030, the country’s SHGs and its women will continue to be significant contributors to this goal and help themselves and a million others imagine a better future.
