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.
Social Justice
NGO
SHG
Poverty Alleviation
Poverty
General Studies Paper 2
Social Justice