Self Help Groups, Financial Inclusion and Women Empowerment – A Critique

9 Pages Posted: 18 Sep 2015 Last revised: 19 Sep 2015

See all articles by Sowjanya Shetty

Sowjanya Shetty

Poornaprajna College

V. Basil Hans

St. Aloysius Evening College

Prakash Rao

Poornaprajna College

Date Written: September 17, 2015


In recent years financial inclusion has been given top priority as financial development and economic growth are interdependent. Women constitute almost half of country’s population and their work participation is also increasing and diversifying and impacting her family, neighbourhood and the economy too. Notwithstanding their numerical strength women are still confined to a secondary status in social life, economic activities and decision-making processes. The Draft National Policy for Women in Agriculture (April 2008) prepared by National Commission for Women (NCW) stated that an estimated 20 per cent of rural households are defacto female headed due to widowhood, desertion or male-out-migration. This makes women economically vulnerable and both occupationally and socially, the victims of discrimination. Self-reliance through solidarity and productivity seems to be the way out of this human poverty. Financial inclusion therefore, could be a means to come out of poverty. Self-help Groups are considered to be the enabling mechanism in this regard. The most common group lending model under SHG movement in India at present is “SHG-Bank linkages”. Across regions and communities SHGs of women have improved their participation and saving capacity. When women have financial means, they invest that money back into their families resulting in better economic security. However, we need to know whether this impact translates to better social security in terms of health, education, equity etc. We argue that financial inclusion without social intermediation is a half attempt at women empowerment. Time has come to the ‘nobleness’ of group approach with ‘ability’ to cope with challenges and changes of the times. SHGs must be ready for new experiments for the sake of enhancing expertise in group management rather than be complacent with past experience. The objectives of this paper therefore, are to (i) critically examine the role and reach of SHGs towards empowerment, (ii) discuss the issues and initiatives in establishing linkages between the socio-economic dynamics and women’s empowerment, and (iii) explore some strategies that may supplant or supplement the SHG initiatives and remove the imbalances that still remain in accomplishing total empowerment of women.

Keywords: Empowerment, financial inclusion, India, women

JEL Classification: D6, E40, E51, G2, G21, G28, I3

Suggested Citation

Shetty, Sowjanya and Hans, V. Basil and Rao, Prakasha, Self Help Groups, Financial Inclusion and Women Empowerment – A Critique (September 17, 2015). Available at SSRN: or

Sowjanya Shetty

Poornaprajna College ( email )

Uduoi District

V. Basil Hans (Contact Author)

St. Aloysius Evening College ( email )

PB. No 720, St Aloysius Evening College
Light House Hill
Mangalore, Karnataka 575 003
0824-2449714 (Phone)

Prakasha Rao

Poornaprajna College ( email )

Udupi District

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