An Analysis of the Effects of Self-Help Groups on Member’s Financial Situation

Mangleshwar Gupta1*, Dr. Lokendra Vikram Singh2

1 Research Scholar, Madhyanchal Professional University, Bhopal (M.P.), India

Email: mangleshwarg@gmail.com

2 Professor, Faculty of Commerce & Management,Madhyanchal Professional University, Bhopal (M.P.), India

Abstract - Various effects of self-help groups on member’s financial circumstances are investigated in this research. Analysed thoroughly, it reveals these organisations revolutionary capacity to strengthen economic resilience and promote financial empowerment. Credit is more easily obtained, members are more likely to save money, and members are more likely to practise good money management because of the joint efforts and mutual support fostered by self-help organisations. Furthermore, member’s financial capacities are further enhanced by the social dynamics that foster responsibility and confidence among these organisations. Not only may self-help organisations improve individuals' financial well-being, but they also contribute to wider socio-economic growth and community empowerment, according to this study.

Keywords: Self-Help Groups, Socio-Economic, Resilience, Savings, Financial.

INTRODUCTION 

When it comes to bettering India's economic situation, women are crucial. The impact they've had on businesses of all sizes has been encouraging for the expansion of the economy. [1] When starting a business, there are a lot of variables that must be considered, including financial, social, cultural, religious, and, most significantly, psychological ones. Since the 1990s, there has been a noticeable increase in the number of women who choose to start their own businesses. [2] At the present time, research indicates that 10% of India's entrepreneurs are women. If the present trend continues, during the next five years, women will make up 20% of the entrepreneurial force. [3] Because it has been shown to promote growth in all areas of society and the economy, women's entrepreneurship is both essential and basic. Not only does this help individuals and others find work throughout the nation, but it also solves problems related to management, organizations, and business via creative thinking and the right tools. In addition to this, it helps families and communities prosper financially, which in turn reduces poverty. [4]

When a person develops the skills necessary to start his own business and hire others, he is engaging in entrepreneurial activity. An "entrepreneur" is someone who takes the initiative to do something. Here are the main points:

• It generates capital and labour, which in turn generate commodities and services, as well as profit. 
• The state of the economy and GDP as a whole are improved. 
• A more equitable distribution of wealth in the area contributes to national progress, and small-scale entrepreneurship plays a key role in this.

When a group of women start, coordinate, and run a company, we call them entrepreneurs. The Indian government has recognised businesses run by women as "women entrepreneurs" if they employ at least 51% female workers and hold or control 51% of the company's capital. For many women, the desire for financial independence and more agency in their professional and personal life are two of the primary motivating elements that lead them to pursue entrepreneurship. Realizing they are capable of more than simply keeping the house running, women are eager to contribute financially to their families and the nation as a whole.[5]

Entrepreneurship is seen as a crucial component in contributing to the progress of the community. A gender-focused universal entrepreneurship study, published in 2013 by computer manufacturer Dell and Washington-based advisory firm Global Entrepreneurship and Development Institute (GEDI), found that India is one of the worst countries for women entrepreneurs. India ranks sixteenth, narrowly ahead of Uganda, out of the seventeen nations examined. India ranked worse than all other nations in the universe when it came to secondary education for women. [6] As it is, women can only fulfill the role of entrepreneur in high-turnover manufacturing units and businesses pertaining to automation. Women are similarly underrepresented in industrial units with low turnover rates. Women only managed 10.11 percent of the small enterprises in India's industrial sector, according to a nationwide study. While the number of women operating their own businesses is on the increase globally, many women still face barriers that prevent their businesses from thriving, such as a lack of capital, strong societal restrictions, limited availability of skilled workers, and a lack of experience.[7]

Women who manage their own enterprises with a fiscal interest of less than 1% of working capital and a minimum of 51% female employees are considered entrepreneurs by the Indian government. Women face obstacles in the entrepreneurial space due to a lack of information being shared with them, societal norms and expectations, a lack of resources, and a lack of support from financial institutions. [8] Building an appropriate bionetwork is likely to resolve the issues. Expertise abounds among women. Adapting well to setbacks, they are quick learners, powerful, and excellent problem solvers. Women business owners, according to research, boost national coffers, create global competition by disseminating novel ideas and products, and contribute to economic growth. [9] Women are more attuned to people and customs, have superior leadership skills, and are better at maintaining long-term financial relationships. In doing so, they are launching themselves headfirst into the commercial universe. Their expansion into electronics, engineering, and energy came after they had already established a name for themselves in the kitchen-related powder, paapad, and pickle industries. [10]

As a result of their dedicated labor, more and more women are breaking through the glass ceiling in the corporate and commercial sectors. Agency in the home is the antecedent of women's success in the business sphere. Women are encouraged to enter the corporate field because they possess essential attributes such as skill, education, and flexibility. [11] When a woman starts her own business, she not only creates jobs but also helps support her family financially. Countless job opportunities, knowledge of rights and regulations, and methods to hone one's craft are all within reach thanks to the internet and other forms of media. Women may learn about and improve their abilities with these. The internet world's demanding circumstances encourage women to break barriers and become business owners, in fields such as design, architecture, interior design, textile industrialists, and more.[12]

METHODOLOGY

The research used a survey methodology based on a sample. There are 403 gram panchayats in the Sidhi district. Four out of five self-help groups (Swa-sahayata samooh) in each gram panchayat are chosen at random using a lottery system. The research period for this project spanned the years 2022 and 2023.The researcher used socioeconomic status, family composition, level of education, and other factors to evaluate the self-help groups performance of 250 women from four panchayat unions in the Sidhi District: Sidhi, Kusmi, Bahari, and Madwas.

Tools

In order to analyze and draw conclusions from the main data obtained from the respondents, it was tallied and categorized. An analysis was conducted on the data gathered from the questionnaire using the Statistical Package for the Social Sciences (SPSS). 

Scope of the study

Women self-help groups in rural areas are the only focus of this research, which aims to shed light on the successes and failures of these women business owners. An entrepreneur's success is evaluated by looking at their savings, income (total revenuetotal cost), and ability to borrow and repay. Researchers are keeping their fingers crossed that this study's results may provide light on how to better support rural women entrepreneurs and inform future initiatives in this area. Unfortunately, this research does not cover all aspects of rural women entrepreneurs.

RESULTS 

Age

A person's physical development, mental maturity, and decision-making abilities may all be gauged by looking at their age. As people become older, their confidence, attitudes, talents, accomplishments, and mental and physical capacities change.

Table 1: Result Composition by Age Group

The table shows the breakdown of the responders by age. It can be seen that 56.4% of the participants are in their 30s and older, 28.4% are in their 25s and 29s, and 2.6 percent are in their 20s and 24s. The percentage of people under the age of 20 is a pitiful 3.6%. A pleasing characteristic is the large proportion of respondents in the age range of 25 and over; this indicates that 84.8% of the respondents are of legal age to make their own judgments.

Those who are 25 and older are more likely to be self-starters, as they make up a larger proportion of the responders. As a generation, they have come to terms with the weight of duty to one's loved ones and the greater community. On top of that, they can handle any obstacles that may arise. 

Religion

Table 2: Categorization of Respondents Based on Their Religion

From the statistics provided, it is clear that the vast majority of respondents are Hindus (81.3%), reflecting the country's overall religious makeup. Long ago, it was considered socially unacceptable for women to work outside the home or in the service industry. In more remote places, this was particularly true. The situation is rapidly evolving, as seen in Table.

Community

The distribution of the current responders by community is shown in Table.

Table 3: Community Wise Classification of the Respondents

Notably, 72.0% of respondents are from the underprivileged group, as seen in Table. Not far behind are 19.6% of the scheduled community and 4.8% of the advance communities. The fact that almost 91.6% of the participants are from backward and scheduled communities is positive in this research.

Marital Status

In the past, married women in India encountered several obstacles when they sought to work outside the home to earn extra money for their families. Taboos hindered women from finding employment in a male-dominated culture that formerly viewed them as equals to servants. Due to the ever-increasing expense of living, the rise of nuclear families, and the dissolution of the joint family structure, women are now legally permitted to pursue employment. However, he is unable to promote women as business owners and managers due to the egotism prevalent in the male-dominated environment. But, as a result of a number of initiatives aimed at empowering women, women are now being encouraged to engage in entrepreneurial pursuits. Table displays the marital status of the current respondents. 

Table 4: The Respondents' Marital Status

We can see that 80.4% of the people who filled out the survey are married from the data in the table above. The percentages of those who are single, widowed, and divorced are 8.4%, 6.0, and 5.2 percent, respectively. The fact that the respondents' spouses have pushed them to start their own businesses is encouraging. For rural communities, this tendency bodes well. 

Family Structure

The family unit is crucial to the success of rural women business owners. In addition to limiting workers' ability to move up and down the corporate ladder, most Indian sociologists believe that the joint family structure has historically stifled the growth of entrepreneurial spirit. It made it possible for a mercantilist dynasty form of government to flourish. A new kind of entrepreneur has a better chance of succeeding now that this structure is on the wane and nuclear families are becoming more common. Table provides details on the respondents' family structures. 

Table 5: An Analysis of the Respondents' Family Dynamics

A total of 250 people filled out the survey, with 169 (or 67.6%) being from nuclear families and 81 (32.4%) from mixed families. Women in nuclear families are more likely to be entrepreneurs because they have more time on their hands, are more independent, and can make their own decisions and plans. Household chores take precedence in joint families, and members must seek out and consider the views of all family members before embarking on any new endeavour.

Size of the Family

A family's size is a determinant of whether or not women in rural regions start their own businesses. If more women are involved in entrepreneurial activities, it's because there are more people in the household. The term "family size" refers to the sum of all family members, including parents, children, and extended relatives.

Table 6: The Respondents' Family Size

The table shows the average number of people in each respondent's family. Among the 250 responses, 96 (or 38.4%) had four or five family members. The following group of 77 women business owners (or 30.8% of the total) often have six or seven people living in their household. Forty people (or 16% of the total) listed more than seven family members, whereas thirty-seven people (or 14.8%) listed one to three. Female entrepreneurs in rural regions are more likely to hail from households with four or five members, according to the current research. 

Respondents Level of Education 

As a whole, education is a boon to women business owners as it allows them to learn the ropes. They get the practical knowledge and entrepreneurial spirit from their technical and professional training. Learning about the many career paths is another benefit. The status of women in society has been enhanced due to the amazing increase in female education in rural regions, particularly in recent years. They have gained confidence and a sense of initiative as a result. They have been able to engage in creative and entrepreneurial pursuits thanks to the technical and professional education that has been brought to them. Table displays the respondents' educational status. 

Table 7:  The Respondents General Level of Education

According to the data in the table, 38.4% of the respondents have completed schooling up to the ninth grade, while 28.4% have no formal education at all. Evidently, 20.8% of responders have recently finished X standard and 8.4% have completed upper secondary. Among those who took the survey, only 2.4% had bachelor's degrees and 1.6% have technical expertise. Because their families were impoverished, several of the respondents who had completed elementary school had acknowledged to engaging in entrepreneurial activity. Of the 250 responders who did not have a bachelor's degree or above, 71 (or 28.4%) had started their own businesses. 

Occupation

A person's occupation is a good indicator of their socioeconomic status. It is well acknowledged that the majority of rural Indians work in agriculture. Families in the agricultural sector tend to be more traditional and resistant to change. They would prefer that its members stay in the same line of work. It is not something they approve of when their ladies seek employment elsewhere. People living in rural regions often work in a variety of service and trade industries, in addition to farming. In these homes, women are encouraged to work so that the family may earn more money. In light of this, every program aimed at empowering women should take into account the family's employment. Table- shows the occupations of the current study participants.  

Table 8: Occupation of Respondents Family Members

Everyone in the respondent's immediate family may see their job status on the table up there. It reveals that a considerable percentage of the spouses (41.8% male, 50.7% female) work in agriculture or earn a living salary from sources other than agriculture. A modest fraction of spouses (19.9%), 18.7% of male members, and 7.9% of female members work as menials for the government. Small-scale seasonal commerce is practiced by 38.3% of spouses, 30.6% of males, and 24.2% of females. There is little cause for optimism about the interviewees' economic backgrounds, as seen in Table. Consequently, women have been compelled to engage in different entrepreneurial endeavors in order to supplement the family's financial assistance for household expenses. It is worth mentioning that none of the respondents come from landowning farming households.

Annual Income 

A family's financial situation is affected by several crucial aspects, one of which is income. A fair quality of life may be guaranteed for a family under normal circumstances by a steady stream of a reasonable income. The opposite is true when a family's income falls below the poverty threshold and cannot cover even the most basic of living expenses. Table displays the yearly income of the respondents' family members.

Table 9: Average Personal Income of the Persons In The Respondent's Family

Details on the respondents' family member’s yearly income are included in the table. While 53.7% of the family members earn between 10,000 and 20,000 rupees per year, 3.7% earn less than 10,000 rupees per annum. Only 1.5% of respondents' immediate families had incomes between Rs. 40,000 and Rs. 50,000/-. These numbers clearly demonstrate that the respondents' families are living in poverty and that they have had to find ways to earn extra money to help out. Therefore, it is not surprising that SHGs have recognized these respondents, who are living below the poverty line, as potential business owners.

Annual Expenditure 

A family's spending habits are a good indicator of their level of living. According to Engel's Law of Consumption, a household's quality of living declines as the proportion of money spent on necessities rises, and vice versa. Table displays the respondents' spending habits. Table 10: The Respondents Annual Spending

N = Number of Family Members of the respondents.

The four Panchayat Unions of Sidhi District from which the respondents hail have already been mentioned. The accompanying table displays their yearly family spending trend per panchayat union. Every Panchayat Union clearly has households that spend over 78% of their income on food and clothes. This is a sign of how poor their living conditions are. The fact that families that are unable to allocate 4% of their money towards schooling are instead allocating almost 10% to gambling and alcohol is disappointing. Because of the men's wasteful spending, women have had to start new businesses.

Table 10: Impact of Self-Help Groups' Impact

Living circumstances are significantly impacted by the state of both Self Help Groups and Non-self Help Groups. This chapter provides a detailed analysis of issues related to their family income and related problems.

Table 11: The Mean side Household Income of Self -Help Groups Beneficiaries

The study of the average household income of Self Help Group recipients is shown in Table above, which also compares the beneficiaries' pre- and post-joining positions. It was evident that under the income bracket of Rs. 0-1000 and the Self Help Groups of Government Organizations category.

The proportion has decreased from 94.44 to 70.63, indicating an improvement in the respondents' financial position as they would have moved up to the next higher 1ab, or Rs. 1001-2000. The next higher slab of Rs. 1001-2000 shows progress as well, with the proportion in the Self Help Groups of Government Organizations category rising to 26.19 percent. The percentage has decreased from 96.83 percent to 73.02 percent in the category of Self Help Groups of Non Governmental Organizations and in the income range of Rs.0-1000. This indicates that the beneficiaries in this category have also moved to the next higher slabs, as illustrated graphically in Figure.

Table 12: Average Monthly Household Spending on Different Self Help Groups Items

The following table shows the spending pattern in the family by analyzing the expenditures made by Self Help Groups on several necessities of life. The information shows that spending on food has gone up in almost every organization category. It is evident that the average expenditure for Self Help Groups of Government Organizations increased to Rs.716.66 after joining the group, compared to their pre-group spending of Rs.681.74. The spending trend for the other kinds of non-governmental organizations that are self-help groups is similar. Regarding the following expense, there has also been an increase in spending on education. Under the Government Organizations Self Help Groups category, they spent Rs. 83.76 after joining the group, compared to Rs. 77.18 before to joining. 

Regarding Self Help Groups of Non-Governmental Organizations, there has also been an increase in the amount spent on education; before to joining the group, only Rs. 89.72 had been spent on education; after joining the group, Rs. 92.52 had been spent. The second expense that the beneficiaries are paying for is power/fuel illumination, however this is a very little increase in expense. The recipients' average income is significantly reduced by the amount they spend on religious events and holidays. Even here, there hasn't been much of an uptick since joining the group. Additionally, it is observed that after joining the Group, more than the beneficiaries treated the visitors without significantly increasing their expenditure of Rs. 50. The data also shows a little rise in the costs associated with leisure activities. Figure visually represents these costs for apparel, housing rent, travel, and medication. 

Table 13: The Self Help Groups' Savings

The savings trends of the Self Help Groups are examined in table above. It was evident that the beneficiaries' habit of frugal living had been largely fostered by the Self Help Groups of Non-Governmental Organizations and Government Organizations. According to the statistics, 72.22% of Non-Governmental Organizations in the Rs. 0-50 category and 86.51% of Self Help Groups of Government Organizations have begun saving for the future. 13.49 percent of the Rs 51–100 group and 27.78 percent of the Self Help Groups report savings.

Table 14: The financial assistance source that the self-help groups have access to

The many funding sources that the Self Help Groups get are examined in table 5.5 above. The data indicates that the corpus fund, which includes revolving funds, has provided 68.25% of the funding for self-help groups. The corpus fund has provided funding for 1.90 percent of Self Help Groups of Non-Governmental Organizations. A little contribution has also been made by the banks, with 17.46%, 21.43%, and 10.32% of the monies going to Self Help Groups of Government Organizations and Self Help Groups of Non Governmental Organizations, respectively. In several instances, moneylenders and contributions from friends and family have contributed to the Self Help Groups' coffers.

Table 15: The skills that the self-help groups prefer

An examination of the Self Help Groups' preferences when it comes to choosing a specific activity for skill enhancement is shown in table. With 24.60% of respondents choosing to make things, it is evident that this is the most sought-after activity. Juice production is determined to be preferred by Self Help Groups of Non Governmental Organizations at 15.08 percent. Regarding other abilities that the Self Help Groups favour. The other skills, such as basketry, which was once a common cottage industry in the villages, are no longer favoured by nearly all groups, with the exception of 0.79 percent in Self Help Groups of Non Governmental Organizations and 1.59 percent in Self Help Groups of Government Organizations. In the case of Self Help Groups of Government Organizations, the preference is 4.76 percent. It is evident that the beneficiaries are not very interested in learning the other home skills needed to operate the economic activity, such as managing nurseries, cooking gardening, mat weaving, creating coir rope, and producing papad.

Issues Related to the Women Self-Help Groups

With the opportunity to pick more than one answer, the table lists the main difficulties faced by company owners running Self-Help Groups (SHGs). According to 71.8% of respondents, the most common problem is getting access to financing. This emphasizes how difficult it is for company owners to get funding via conventional channels, which impedes the expansion and growth of their enterprises. Another significant issue is marketing and sales, with 50.0% of respondents mentioning challenges in successfully promoting and selling their goods or services. This emphasizes how crucial it is to improve marketing tactics and reach new customers in order to maintain economic sustainability.

Table 16: The primary difficulties you have while managing your company via the SHG

38.1% of respondents said that obtaining raw materials was difficult, citing problems such unstable pricing, untrustworthy providers, and logistical difficulties in locating necessary inputs. Furthermore, 44.0% of respondents cite a lack of technical skills as a major barrier, highlighting the need of capacity-building programs to provide business owners with the know-how and skills they need to successfully innovate and adapt to market demands.

The replies to questions on prejudice or obstacles that are particular to a woman's gender are shown in the table. Of those surveyed, almost 46.0% admitted to meeting such obstacles, whilst 54.0% said they had not experienced discrimination or impediments based on gender. 

Table 17: encounter any prejudice or obstacles based on gender as a female entrepreneur

The noteworthy proportion of female entrepreneurs (46.0%) who encounter barriers unique to their gender highlights enduring disparities and prejudices in entrepreneurial environments. These obstacles include be restricted access to capital, biased lending procedures, uneven chances for company expansion and development, and cultural attitudes that minimize the contributions of women to entrepreneurship. Subtle forms of gender discrimination include prejudice in discussions, underrepresentation in positions of authority, and uneven access to networks and resources. 

In contrast, it's possible that the 54.0% of respondents who say they don't encounter gender-specific obstacles work in settings that are generally egalitarian and helpful. These women could have been able to overcome obstacles or work in fields or areas where barriers relating to gender are less common. Nonetheless, it's critical to understand that prejudices and inequalities may still exist, although in more covert ways, in situations that seem to be gender-neutral.

CONCLUSION

A clear picture of the far-reaching consequences of self-help organisations becomes apparent when one examines how these communities affect the financial circumstances of their members. Individuals are better able to face and overcome economic hardships when they participate in self-help groups where they may work together and get mutual support. In order to improve financial well-being, encourage savings practices, and make credit more accessible, the research highlights the revolutionary power of collective action. Member’s faith in their own financial management abilities is enhanced by the responsibility and trust fostered by the group dynamics. Consequently, self-help organisations have a multiplicative impact that goes beyond financial benefits, fostering greater economic independence and community building.

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