MICRO FINANCE IN SELF HELP GROUPS

Paper ID: EIJTEM_2026_13_1_28-31

Author's Name: Ms.P.Rekha, Ms.S.Joycelin, Ms.R.Vaishnithi

Volume: 13

Issue: 1

Year: 2026

Page No: 28-31

Abstract:

Microfinance through the Self-Help Group-Bank Linkage Programme (SBLP) has emerged as the world's largest community-based financial inclusion initiative, playing a pivotal role in the socio-economic transformation of rural and semi-urban landscapes. This study examines the efficacy of SHGs as credit delivery mechanisms that bypass traditional collateral requirements through joint liability and peer monitoring. As of late 2025 and moving into 2026, the movement has scaled to reach over 10 crore women across 91 lakh groups, with bank loan outstandings exceeding ₹2.90 lakh crore. The findings indicate that participation in SHG-led microfinance significantly enhances women's income levels, financial autonomy, and decision-making power within households. Furthermore, recent policy shifts like the Lakhpati Didi scheme highlight a transition from survival-based credit to supporting matured micro-enterprises and agro-based businesses. However, the sector faces emerging challenges in 2026, including rising delinquency rates—expected to normalize by the second half of the year—and the need for deeper digital and financial literacy to manage increasingly complex financial products. The study concludes that while microfinance is a powerful catalyst for inclusive growth, its long-term sustainability depends on strengthening market linkages, adopting advanced digital tracking via platforms like E-Shakti, and implementing stricter regulatory checks to prevent over-indebtedness.

Keywords: MICRO FINANCE, SELF HELP GROUPS

References:

1. Mallik, R. (2025): "Micro Finance and Self Help Groups in Women Empowerment: A Reflection from Tripura," PowerTech Journal, Vol. 49, Issue 2. Examines how SHGs build financial discipline and credit history.
2. Kumari, T. (2025): "SHG-Bank Linkages in Uttar Pradesh: Pathways to Women Empowerment through Micro-finance," South India Journal of Social Sciences, Vol. 23, No. 3
3. NABARD Annual Report 2024-25 (2025): The primary source for SHG-Bank Linkage statistics, recording over 144 lakh savings-linked groups and ₹3 lakh crore in outstanding loans as of late 2025.
4. RBI Financial Inclusion Index (2025): A report detailing the rise of India’s Financial Inclusion Index to 67, highlighting the role of SHGs in expanding rural credit access.

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