Self Help Group Approach (SHG) is a successful instrument for combating poverty in a sustainable way. It empowers the very poor people of the communities socially and economically to live a life of dignity with their families and community. The Self Help Group (SHG) is breakthrough of changing dependency on humanitarian aid model Instead; it focuses to promote the strength and the power of the communities as well as unleashing the potential of the communities. The initiative is based on mutual support and encouraging self-reliance of the members and communities.
The SHG Approach is a rights-based approach which views poverty as the denial of rights and poverty alleviation as a process of reclaiming one’s rights. Given the multi-dimensional nature of poverty, however, the SHG Approach puts equal emphasis on the goals of economic, social and political empowerment. In order to achieve these goals, it offers a framework and guidance for establishing a ‘People’s Institution’ which provide an environment of trust and cooperation in which people come to realize they are able to help themselves to achieve the economic, social and political goals that they themselves define.
A Self Help Group is made up of 15 to 20 members from among the members identified as the poorest in the community. If there are more members a second group may be formed. The size of the group is important. If there are too few members the rate at which their savings grows will be slow.
The collective strength of the group will be limited. At the same time if the group is large, participation in the group and active involvement of all the members could be limited.
It is important for the members in a SHG to commit them to meet regularly on a weekly basis. The members decide the place of the meeting and the day / time of the meeting suitable to them. The regular meeting gives them a sense of belonging. They start sharing their lives with one another, which leads to a strong support system. The regular meeting leads them to collective action, which may be some service to themselves, to the community or even action against unfair and harmful practices in the community.
Members in a group are encouraged to give a name for their group. The name gives them a sense of identity. Members come up with very creative names in their own language. The name could be very important and give a sense of identity. It is not uncommon to find that when someone stops a SHG member on the street and asks her name, she could say I am so-and-so and I belong to such-and-such group. Members are facilitated to make simple rules for their group. They write down these rules as their bye-laws and follow them.
Leadership in a group is on rotational basis. There are no Chairpersons, Secretary or Treasurer, which are leadership terminology used in conventional groups. Each member is encouraged to moderate the weekly meeting in turns. There is a book writer who maintains the records. An assistant book writer assists the book writer. These two members are specially trained to do this job. After a term (normally two years) the book writer hands over her job to the assistant and a new assistant is selected.
Members commit themselves to save a small amount every week. It is true that they are economically poor. This saving helps them to stretch themselves and experience the hidden potential in them. Saving is possible by either doing an extra activity or cutting down expenses or a combination of both. The saving leads to financial discipline. The growing capital in the group is a strong motivator to continue saving. It is important for the group to learn to keep their money safely. A normal tendency, as their money grows, would be to request the facilitator or the promoting organisation to keep their money for them. This should not be done. The group in keeping their money learns to trust each other, learns discipline and learns to take responsibility. The group members keeping and handling their money is an important principle.
Where banks are easily accessible, the group is encouraged to open a bank account in the name of the group. Members choose their bank signatories. The Facilitator or a staff member of the promoting organisation should not be a signatory. The bank account gives a feeling of security. It also builds self-esteem. It is no problem if banks are not easily accessible, which is the reality for most poor communities. Members learn to keep their money safely.
Internal investment and enterprise development: Members are encouraged to take small loans from their group’s saving for urgent consumption needs and for micro-business. Members are encouraged to make their own lending rules. They are facilitated to realize that consumption loans are difficult to repay, whereas micro-business could lead to profit. They slowly learn to live on profit rather than living on the capital.
Self Help Groups maintain a high level of discipline. They are facilitated to conduct their meetings systematically. They often have punitive measures for members who are absent from meetings and for latecomers. Fines or other punitive measures are enforced on members who do not save regularly and for those who do not pay back their loan on time.
The three Dimensions of SHG Approach
The Three Dimensions of the SHG Approach are the three important dimensions of life that are the focus of the SHG Approach are: economic, social and political empowerment including their key principles.
- The key principles of the economic dimension of the SHG Approach are: mutual trust, accountability, participation and creativity.
- The key principles of the social dimension of the SHG Approach are: affinity, trust, participation and mutual responsibility.
- The key principles of the political dimension of the SHG Approach are: independence and involvement.
The Basic Principles of the SHG Approach
The SHG Approach is based on 2 basic principles: 1. Every human being has tremendous, ALLAH-given potential. This hidden potential in the poor can be unleashed if a conducive environment is provided. Society has pushed certain sections of her people to the margin. These vulnerable and marginalized people slowly come to accept and internalize the situation they have been thrown into. The very poor are therefore often unheard and unseen by the rest of their community, and in particular by decision makers. The very poor are thus easily excluded. Even some development actors have excluded them from programs because of the extent of their poverty. For example, some micro-credit providers will not provide credit to the very poor since they do not have collateral and are considered not credit worthy. In spite of this exclusion and disempowerment, the very poor have enormous ALLAH-given potential to improve their own lives.
The SHG Approach seeks to bring out this potential and fosters their integration with the rest of the community. The approach seeks to draw them back from the margins. Once they start discovering their potential and self-worth, there is no stopping them from development. The process involved in the SHG Approach helps them to (re-)discover their potential step by step and realize that they are worthy citizens who can achieve a lot in life. 2. As individuals the poor are voiceless, powerless and vulnerable. By bringing them together as a homogenous collective that is aware of their rights, they gain tremendous strength and can claim their rights. The SHG Approach focuses on building (or rebuilding) strong and more just communities by bringing people together and empowering them. Value systems are systematically restored, redefined and instilled in the community. Their collective bargaining power increases, enabling them to access better services as well as claim their entitlements.
Three Levels of the People’s Institution
In any poor community, the first Self Help Groups (SHGs) are formed with the poorest members of the community. Groups of 15 to 20 members form a SHG (the first level of the People’s Institution). When SHGs grow in number and begin to realize that there are problems they cannot solve without the help of other groups, they are prepared to form a cluster of self-help groups or a Cluster Level Association (CLA). Generally when there are about 8 to 10 strong SHGs, the groups come together to form a CLA (the second level of the People’s Institution).To do this, two members are carefully selected by the SHG members from among themselves to represent their group at the CLA. Thus a CLA is made up of 2 representatives from each of the SHGs that are part of the CLA. As more and more SHGs are formed, there are more CLAs established. When there are about 8 CLAs, they come together to form a Federation (the third level of the People’s Institution). The rich experience of CLAs in bringing about important changes in the community, whether infrastructure development, helping improve social service delivery, and/or reducing structural dependencies motivates them to participate in local governance ensuring that the principles and features of SHG are recognized and find their way in local, regional, and national laws and policies.
In most countries legally registered Federations take on a critical role in the socio-economic and political development of their regions and lobby for policy development. There is no hierarchy between the levels. The levels relate to the different roles and functions that take place within the People’s Institution. As the People’s Institution continues to grow in terms of number of SHGs and CLAs the Federation includes more and more CLAs, thereby consolidating its strength in terms of numbers. In many cases the Federation registers itself and obtains a legal identity for the entire People’s Institution.
Functions and Impact at the Three Levels:
The SHG Approach is a holistic approach which, when implemented according to the principles, leads to social, economic and political empowerment for the individual, the community and beyond. At each level, different activities take place that are complementary to one another to achieve holistic development that is sustainable.
The Self Help Group Approach (SHG) was initiated in Somaliland in 2013 and was piloted on small groups. After successful achievements of the initiative, the approach was fully started in 2014 and by now candlelight has formed 98 Self Help Groups (SHGs) in Hargeisa and Burao in which 1960 are members.
The approach has created 1750 businesses for the members form their saving among. The total amount of their beginning saving was between 2000-3000 Somaliland shillings by each member of the SHGs that they were regularly saving once in every week and currently the amount of their saving is $30,795 for all the SHG members and the loan /investment given out to the members is $250,926. Also they have capital money which is the amount of $50,525.5, the capital is from social saving among the group, fine and the Mudaraba Musharaka (profit Sharing). On the other hand Candlelight has formed Five Cluster Level Associations (CLAs) in Hargeisa, the members of that CLAs are composed of one million (1000, 000) members 200 member by each CLA.