Role of NGOs and SHGs in Poverty Alleviation

Published on 17 Feb 2025

Non-governmental Organizations (NGOs) and Self-help groups (SHGs) play crucial roles in poverty alleviation by implementing various programs and initiatives aimed at empowering communities.

How NGO and SHG help in poverty alleviation

✔     Women empowerment: Both NGO and SHG focus on imparting education, skilling, and employability of women, thus improving their socio-economic condition and enhancing their self-esteem.

●      Example: The SHG-led Lijjat Papad is presently employing over 45000 women and has a turnover of over 1600 crore.

✔     Social integrity: Both play an immense role in bringing social change and development by bringing together people to pursue certain common interests.

✔     Voice to the marginalized section: Both actively work to protect the interests of deprived people, particularly the SCs and STs and their participation through SHG and NGO ensures social justice.

●      Example: Samata is an Indian NGO working towards addressing the developmental issues of tribals in Andhra Pradesh

✔     Capacity building: Focus on skill development of individuals and communities through vocational training and awareness programs that empower people by improving their economic prospects.

●      Example: Samarthanam is an NGO for empowering the differently abled. It has provided livelihood training to more than 30000 disabled youth.

✔     Financial inclusion: Providing small loans to the members for various needs can lead to the creation of sustainable livelihoods and reducing reliance on external sources.

●      Example: SHG network is the world’s largest microfinance project serving 14.2 crore families with savings deposits of around 47240 crore.

Challenges faced by NGO and SHG in poverty alleviation

✔     Funding constraints: Many NGOs rely on unreliable external funding sources. For SHG, the funding crisis arose due to limited access to formal lending.

●      Example: Combined incomes of the top 100 NGOs were 30% less than the combined CSR budget of the top 100 spenders.

✔     Bureaucratic hurdles: This includes complex regulatory requirements, paperwork and delays in obtaining necessary approvals thus over-regulation of NGOs and SHGs hinders their work and efficiency.

●      Example: Restrictions imposed upon NGOs for accessing funds have caused delays in their functioning.

✔     Lack of proper networking: Having a poor network leads to a lack of communication which causes the loss of opportunity to work with the community and their participation and impact its effectiveness.

✔     Leadership issues: Without effective leadership, internal conflicts, lack of leadership skills or turnover in leadership positions can hinder the group's progress.

●      Example: SHGs in India often lack leaders who have expertise in finance and management, leading to inefficient functioning.

✔     Sustainability: The quality of achieving long-term sustainability has been risking the continuity of their initiatives.

Way forward

✔     Monitoring: Ensuring the effectiveness, transparency and accountability in every state.

✔     Participation: Involve members in planning, decision-making processes and implementation of SHG activities, facilitating better inclusion.

✔     Market linkages: Explore partnerships with government agencies, other NGOs, and other organizations to create a sustainable market for members.

By continuously learning from experiences, adapting strategies and engaging with stakeholders, these organizations can contribute significantly to poverty alleviation and community development.

Tags:
Social Justice

Keywords:
NGO SHG Poverty Alleviation Poverty

Syllabus:
General Studies Paper 2

Topics:
Social Justice