Micro-Finance and Rural Self-Employment through Self-Help Groups : A Study of Select Districts in Orissa and Haryana

Abstract

This paper, drawing upon a primary research conducted in 2006-07 in two districts each of Haryana and Orissa States, assesses the governance issues in the operations of Self-Help Groups (SHGs) in rural India. Varimax analysis of the performance parameters identifies the underlying factors which have an impact on the governance of SHGs, and the performance of micro-finance ventures. The main problem areas are found to be low financial base due to the absence of appropriate credit linkages, non-provision of socioeconomic incentives to members, and the lack of group commitment to task accomplishment. The results underline the need for an integrated approach to programme governance in rural areas. The paper concludes with policy lessons which can help in improving the implementation of rural self-employment programmes.