Effectiveness of SHGs as Social Business Models: An Empirical Study

Abstract

State intervention and social capacity building differ according to development status of a nation. Such policies need to instill sustainability for achieving socio-economic stability corresponding to business survival. Business models can shape social development and work towards attaining social economy. In this context Yunus’ model of social business characterizing social innovation may be mentioned. The model is a revolutionary tool that subscribes to unique banking practice that assists in creating mass empowerment through multiplier effect. Considered strategic in Indian context, Self Help Group (SHG’s), a social business movement is designed to transform the social economy into socio-economic empowerment. The model leads towards engendering Indian rural women folk. Conceptualized on micro credit as a medium of financial maneuvering, its delivery mechanism and drawing bank linkages as the process of securing social harmony are observed to impact on social economy. Small stratified social groups belonging to similar economic background, and residing below poverty line mutually cooperate and coordinate at regular intervals, through pooling of financial resources for common benefit. The entrepreneurial activities that lead to asset creation , percolates down the needy households and raises their standard of living. The paper therefore examines the extent of penetration of Self Help Groups, as business model formats in engendering and empowering the economy. It also investigates the group’s working and debates on creation of social harmony. Parameters are drawn from literature reviews ,that are designed to test the extent and effectiveness of self help groups as a social model. Primary data is extensively used in the study.