Key Government Schemes for Women Self Help Groups in India

Introduction to Women Self Help Groups (SHGs) in India

Women Self Help Groups (SHGs) have become a transformative force across rural India, bringing together women from similar socio-economic backgrounds to collectively address their financial and social challenges. The SHG movement gained momentum in the 1990s and has since been recognised as a critical tool for women’s empowerment, especially among those living in villages and small towns. These groups encourage savings habits, access to credit, and mutual support, creating a platform for women to engage in income-generating activities, entrepreneurship, and community development. SHGs play a pivotal role not just in boosting household income but also in enhancing womens confidence, decision-making power, and active participation in local governance. With strong backing from both Central and State Governments through various targeted schemes, SHGs are now at the forefront of driving social change and economic upliftment among women across Bharat.

2. National Rural Livelihood Mission (NRLM): Uplifting Women SHGs

The National Rural Livelihood Mission (NRLM), popularly known as Aajeevika, is a flagship initiative by the Government of India aimed at empowering rural women through Self Help Groups (SHGs). This scheme focuses on poverty alleviation by promoting sustainable livelihoods and social inclusion. NRLM’s approach is holistic, targeting both economic and social upliftment of women, especially in rural Bharat.

Key Features of NRLM (Aajeevika)

• Universal Social Mobilisation: NRLM mobilises women from poor households into SHGs and federates them at village, cluster, block, and district levels.
• Capacity Building: Regular training and workshops are provided to enhance financial literacy, leadership skills, and entrepreneurial abilities among SHG members.
• Financial Inclusion: SHGs gain access to formal banking systems, credit linkages, and revolving fund support for their micro-enterprises.
• Livelihood Promotion: The scheme encourages diversified livelihood activities such as agriculture, animal husbandry, handicrafts, and small businesses tailored to local context.

Funding Models under NRLM

Capacity Building Initiatives

• Skill development programmes tailored to local trades
• Exposure visits and peer learning opportunities across states
• Digital literacy initiatives for improved record-keeping and market access

Impact on Women SHG Members’ Livelihoods

• Enhanced household income due to diversified livelihood options
• Improved decision-making power within families and communities
• Greater access to government welfare schemes via direct benefit transfers (DBT)

The NRLM has been a game-changer in rural India, giving women not just financial independence but also a respected identity in society. The mission continues to bring grassroots transformation by enabling lakhs of women to dream bigger and achieve more through collective strength.

3. Support through Mahila Coir Yojana and Digital Sakhi Initiatives

Empowering women Self Help Groups (SHGs) in India goes beyond just financial aid—it’s also about providing the right skills and access to modern digital tools. Two standout government programmes, Mahila Coir Yojana and the Digital Sakhi initiative, are making a real impact at the grassroots level.

Mahila Coir Yojana: Skill-Based Employment for Rural Women

The Mahila Coir Yojana is specifically designed to boost skill-based employment among rural women, especially those associated with SHGs. Under this scheme, women receive hands-on training in coir processing and product manufacturing—a traditional industry with deep roots in states like Kerala, Tamil Nadu, and Andhra Pradesh. The government covers up to 75% of the training costs, making it easier for even the most resource-constrained groups to participate. After training, SHG members can start their own micro-enterprises or join existing coir units, ensuring sustainable livelihoods within their communities.

Real-World Impact for SHGs

This scheme has enabled thousands of women to move from daily wage labour to entrepreneurship. The focus on local skills ensures that beneficiaries not only earn better but also preserve traditional crafts. For many SHGs, this is their first step towards self-reliance and social recognition.

Digital Sakhi: Bridging the Digital Divide

While skill development is crucial, today’s India demands digital readiness as well. The Digital Sakhi initiative addresses this need by equipping women SHG leaders with digital financial literacy and fintech tools. Through comprehensive workshops and ongoing mentorship, these “Sakhis” become community champions for cashless transactions, online banking, and mobile payments—key pillars of financial inclusion in a rapidly digitising economy.

Unlocking Financial Inclusion

Digital Sakhis don’t just learn—they teach others in their villages how to use UPI apps, e-wallets, and internet banking safely. This ripple effect helps entire SHGs confidently access government subsidies, manage group savings digitally, and expand their businesses with ease. In regions where access to banks is limited, Digital Sakhis are often the first point of contact for digital finance solutions.

Together, Mahila Coir Yojana and Digital Sakhi initiatives demonstrate how targeted government schemes can uplift women-led SHGs—by combining time-tested skill-building with cutting-edge digital empowerment tailored for India’s unique socio-economic landscape.

4. MUDRA Yojana: Access to Microfinance for SHGs

MUDRA (Micro Units Development and Refinance Agency) Yojana is one of the flagship government schemes designed to empower Women Self Help Groups (SHGs) in India by providing easy access to microfinance. This initiative aims to fuel entrepreneurship at the grassroots, particularly among women from rural and semi-urban backgrounds.

Overview of MUDRA Loans for SHGs

MUDRA loans are classified under three categories – Shishu, Kishor, and Tarun – based on the stage and funding requirement of the enterprise. These loans are collateral-free, making them accessible even for first-time women entrepreneurs who may not have assets to pledge.

Eligibility Criteria for SHGs under MUDRA Yojana

• The SHG must be a registered group consisting predominantly of women members.
• The group should be involved in income-generating activities such as handicrafts, agriculture, animal husbandry, retail or other small businesses.
• A proven track record of internal lending and repayment within the group enhances eligibility.
• No history of loan default with any bank or financial institution.

Application Process Simplified for Indian SHGs

1. Visit the Nearest Bank/Financial Institution: Approach banks participating in the MUDRA scheme (SBI, Canara Bank, HDFC Bank, etc.). Many regional rural banks and cooperative banks also offer this facility.
2. Prepare Required Documents: Collect KYC documents of members, SHG registration certificate, business plan, and records of internal group transactions.
3. Loan Application Submission: Submit a filled MUDRA loan application form along with necessary documents.
4. Assessment & Disbursal: The bank reviews the proposal; upon approval, funds are directly credited into the SHG’s account.

Paving the Way for Women Entrepreneurship in India

MUDRA Yojana has played a crucial role in nurturing the entrepreneurial spirit among Indian women. By giving SHGs access to institutional credit without collateral requirements, it breaks traditional barriers that often restrict women from starting or scaling their ventures. Many SHGs have successfully used MUDRA loans to start tailoring units, kirana stores, food processing units, and more—empowering thousands of women financially across states like Tamil Nadu, Maharashtra, and West Bengal.

5. Capacity Building and Skill Development Schemes

India’s women Self Help Groups (SHGs) have witnessed significant transformation through targeted capacity building and skill development schemes initiated by the government. Among these, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) stands out as a flagship programme designed to empower SHG members with industry-relevant skills and enhance their employability.

Empowering SHGs through PMKVY

PMKVY provides short-term skill training across various sectors such as textiles, handicrafts, food processing, agriculture, and retail—areas where women SHG members traditionally participate. The scheme is tailored to ensure that women from both rural and urban backgrounds can access opportunities for upskilling, entrepreneurship, and wage employment, fostering economic independence at the grassroots level.

Key Features of Skill Development Schemes

• Recognition of Prior Learning (RPL): Many women already possess informal skills. RPL under PMKVY certifies these skills, enhancing confidence and marketability.
• Placement Assistance: SHG members trained under these schemes receive placement support or are linked to micro-enterprise opportunities.
• Local Language Training: Courses are delivered in regional languages like Hindi, Tamil, Telugu, Kannada, Bengali, etc., ensuring maximum participation and understanding among women across India.

Relevance for Women SHGs in India

Skill development schemes go beyond training; they foster an entrepreneurial mindset. Government partnerships with NGOs and private sector trainers ensure that courses remain practical and market-driven. As a result, SHG members are better equipped to run small businesses, improve existing livelihoods like tailoring or dairy farming, and contribute to their family incomes.
For instance, many women SHGs in states like Tamil Nadu, Maharashtra, and West Bengal have leveraged PMKVY to upgrade their skills in tailoring, organic farming, or digital literacy—leading to improved productivity and higher earnings.

The government’s focus on capacity building ensures that women’s collectives are not just financially included but also empowered to stand on their own feet. These initiatives are crucial for creating a robust ecosystem where every woman has the opportunity to realize her potential and play a pivotal role in India’s economic growth story.

6. Impact and Success Stories from the Grassroots

Across India, women Self Help Groups (SHGs) have emerged as powerful catalysts of social and economic transformation, thanks to key government schemes tailored for their empowerment. Let us explore inspiring grassroots stories that showcase the real impact of these initiatives.

Transforming Rural Livelihoods in Andhra Pradesh

The Mahila Sadhikara Samstha (SERP) under the National Rural Livelihood Mission (NRLM) has enabled countless women in Andhra Pradesh to break free from poverty cycles. For instance, in Chittoor district, the “Amma SHG” started with basic tailoring skills. Leveraging bank linkages facilitated by the government, they expanded into garment manufacturing, supplying uniforms to local schools. Today, over 300 families benefit directly, with incomes multiplied and community respect enhanced.

Empowering Tribal Women in Odisha

Odisha’s “Mission Shakti” scheme has changed the lives of tribal women in Koraput. The “Maa Tarini SHG” began by processing minor forest produce. With grants and training provided under government schemes, they diversified into making organic spices and herbal products, now sold across urban markets. These women have become role models, leading panchayat meetings and representing their villages at district forums.

Financial Inclusion in Uttar Pradesh

Through the Deendayal Antyodaya Yojana-NRLM, SHGs like “Shakti Sangathan” in Kanpur have accessed microcredit to set up dairy cooperatives. Their success story is a testimony to how government support can foster entrepreneurship among rural women—turning homemakers into business owners who contribute significantly to household incomes and local economies.

Social Change in Tamil Nadu

The Pudhu Vaazhvu Project enabled the “Karpaga Vinayaga SHG” in Madurai to launch a paper bag production unit. Beyond income generation, this initiative has led to a reduction in plastic use locally and increased environmental awareness—demonstrating how SHGs drive both economic and social change at the grassroots level.

Conclusion: A Ripple Effect Across Bharat

These success stories reflect only a glimpse of the vast impact created by government-backed SHGs across diverse Indian states. From financial independence to leadership roles and community development, women are scripting new narratives of empowerment every day—proving that when women rise, Bharat rises with them.

7. How to Apply and Resources for SHG Members

Step-by-Step Guide to Accessing Government Schemes

For women Self Help Group (SHG) members in India, accessing government schemes can be a game-changer. Here is a simple step-by-step guide:

Step 1: Identify the Relevant Scheme

Start by understanding which scheme fits your group’s needs. Popular schemes include NRLM (Aajeevika), PMEGP, and Stand Up India. Use local names like Swayam Sahayata Samooh (Self Help Groups) while searching.

Step 2: Gather Necessary Documents

Collect Aadhaar cards, SHG registration certificates, bank account details, and group meeting records (Baylance Sheet or Bahi Khata). Ensure all documents are up-to-date.

Step 3: Approach the Local Nodal Office

Visit the nearest Gram Panchayat office or Block Development Office (Panchayat Bhawan, BDO Karyalaya). They provide application forms and guidance in local languages like Hindi, Tamil, Telugu, or Bengali as per your region.

Step 4: Fill Out Application Forms

Complete the application form carefully. If you need help, seek assistance from community resource persons (Sakhi Mandal Didi) or local NGOs.

Step 5: Submit and Track Your Application

Submit the completed form with supporting documents at the nodal office. Collect an acknowledgement slip (Prapti Patra) and note down reference numbers to track your application status.

Common Challenges Faced by SHG Members

• Lack of awareness about schemes and eligibility criteria
• Language barriers during documentation and communication
• Bureaucratic delays and paperwork overload

Tip:

If you face challenges, connect with your District Mission Management Unit (DMMU) under NRLM or ask for help at your nearest Common Service Centre (CSC).

Useful Helplines and Portals for SHGs

• Aajeevika Helpline: 1800-11-6400 (for NRLM related queries)
• MUDRA Yojana Portal: mudra.org.in
• NABARD SHG Portal: nabard.org
• Stand Up India Helpline: 1800-180-1111

Tapping into these resources will help your SHG thrive and unlock new opportunities for financial empowerment. Stay connected with your local Panchayat or NGO partners for updates on new schemes and training sessions.