The Role of Self-help Groups in Financial Inclusion in India

Abstract

This study attempts to evaluate the performance of women-dominated self-help groups (SHGs) in India and their contribution to financial inclusion. The two dimensions – spread and status of SHGs are considered to assess their performance level, where each of the dimensions has a few number of indicators. The study also constructs a composite financial inclusion index (FII) to calculate the FII values, which appear from the performance of SHGs, during the study period 2007–2021, in India. Finally, the study establishes a relationship between financial inclusion and human development since women’s involvement in financial inclusion is also conducive to human development. The study comes to the conclusion that despite success in achieving financial inclusion through promoting SHGs, the government should keep a focus on the ever-increasing amount of non-performing assets (NPA) of the banks since a part of that is related to the functioning of SHGs. However, the promotion of SHGs is fundamental for women empowerment, human development, and thereby, to ensure sustainable development.

Citation

Saha, D. and Alam, R. (2024), "The Role of Self-help Groups in Financial Inclusion in India", Vinodan, A., Mahalakshmi, S. and Rameshkumar, S. (Ed.) Informal Economy and Sustainable Development Goals: Ideas, Interventions and Challenges, Emerald Publishing Limited, Leeds, pp. 183-202. https://doi.org/10.1108/978-1-83753-980-220241010