Growth and Outreach of Self-Help Groups’ Microcredit Models in India: A Literature Insight

Abstract

Self-help groups’ (SHGs) microcredit concept in India started on a pilot basis in the year 1991 and has presently become the biggest microfinance programme in the world. This glints for the research review paper to look into the Indian microcredit industry from its emergence to its present status. It begins with curtaining the terms poverty, the origin of SHGs and microcredit concept. The literature goes through the different dimensions of SHG concept and infers that SHGs form the essence of cooperation with an ambience of dynamism, cohesion and collective action in group members. After looking into past studies on microcredit coverage, it is apparent that even now a larger section of the poor is not yet covered under the microcredit umbrella; it entails that even now a bigger population is waiting to harness SHG microcredit to escape poverty. Furthermore, this paper deeply elucidates the existence of the Indian widespread and diversified microcredit delivery systems, namely Model-I: Bank promoted, Model-II: Government Agency and Model-III: non-governmental organisations (NGOs) promoted. The commonalities and differences of existence in these models are unveiled. This marks the existing scope and arenas for microcredit expansion and reveals the role of banks, NGOs and other related institutions in filling the gap to reach the poor in the widespread microcredit models. This paper ends with recommending the research in a vital direction, which helps to achieve success in explaining SHGs’ microcredit as a tool for rural development.