top of page
Israeli Currency

MICROFINANCE- SELF-HELP PROJECT

Self-Help Groups as Catalysts for Sustainable Development Under RUAIPP:

​

Self-Help Groups (SHGs) are a cornerstone of Farmer’s Pride International (FPI) Rural and Urban Agriculture Innovative Production Program (RUAIPP). These community-driven micro-units are designed to enhance the well-being and economic resilience of disadvantaged populations. Through need-based and flexible approaches, SHGs provide a vital platform for community empowerment, fostering sustainable and inclusive agricultural development.

​

FPI’s SHG model is highly adaptable, tailored to the unique needs of each community, and often structured to support specific demographics, such as women, men, or mixed-gender groups. The primary objective of SHGs is to facilitate affordable and sustainable financing solutions for agricultural projects, thereby enabling long-term growth, economic independence, and self-sufficiency. By linking SHGs with government agencies, voluntary organizations, and other stakeholders, FPI creates robust synergies that amplify the impact of these initiatives on rural and urban communities.

​

Through SHGs, FPI not only addresses financial barriers but also serves as a conduit for disseminating modern agricultural technologies and practices. These groups provide smallholder farmers with access to markets, affordable financial resources, and technical expertise, resulting in increased agricultural productivity and income generation. This approach contributes significantly to the socio-economic development of farming communities while supporting broader sustainability goals, making SHGs an integral component of RUAIPP’s mission to transform agriculture into a vehicle for empowerment and growth.

Microfinance-based Self-Help Groups.

 

Formation and Operation of Self-Help Groups (SHGs): A Universal Model:

​

Self-Help Groups (SHGs) provide an inclusive platform for individuals from diverse cultural and social backgrounds to unite and improve their socio-economic status. These groups, whether formal (registered) or informal, operate on the principles of thrift, credit, and self-help, making them universally adaptable across different countries and regions. Here's how the SHG model can be effectively implemented:

Formation of SHGs

​

  • Identification of Members:

    • SHGs begin with individuals voluntarily coming together based on shared interests or causes, such as improving their economic conditions or addressing common challenges.

    • Groups are typically formed with 10 to 20 members from a homogenous background to foster trust and collaboration.

​​

  • Group Constitution:

    • Members collectively establish rules for savings, fund utilization, and decision-making.

    • A leadership structure is created, often including roles such as chairperson, treasurer, and secretary, to ensure transparency and accountability.

​​

  • Savings and Common Fund Creation:

    • Members contribute small, regular savings to create a pooled fund. This fund serves as the foundation for the group's financial activities.

    • Contributions can be tailored to the income levels of members to ensure inclusivity.

​​

Operation of SHGs:

​

  • Resource Mobilization:

    • The pooled savings fund is used to provide small, interest-bearing loans to members based on their needs or for group-identified ventures.

    • SHGs can access additional funds through grants, loans from banks, or government programs to scale their activities.

​​

  • Self-Help Projects:

    • Members are encouraged to use their pooled resources for self-help projects such as small-scale businesses, agriculture ventures, or community development initiatives.

    • Decision-making is democratic, with all members contributing to discussions on how funds are utilized.

​​

  • Capacity Building:

    • Regular training is provided to enhance members' skills in areas like financial literacy, business management, and project implementation.

    • This ensures the sustainability and scalability of SHG activities.

​​

Adaptation Across Regions:

​

  • Cultural Sensitivity:

    • SHG formation is flexible and adaptable to align with the cultural and social norms of different countries. This ensures inclusivity and respect for diverse values.

​​

  • Collaborative Frameworks:

    • Partnerships with local financial institutions, development agencies, and governments are leveraged to provide technical and financial support to SHGs.

    • Successful global models, such as the NABARD initiative in India, demonstrate how pilot projects can be scaled for widespread impact.

​​

  • Savings and Rotational Lending:

    • Members contribute to a common fund, enabling a rotational lending system where loans are provided based on needs or opportunities.

    • Interest earned on these loans is reinvested to grow the group's financial capacity.

​​

Outcomes of SHGs:

​

  • Economic Empowerment:

    • Members benefit from increased access to financial resources, enabling them to start small businesses, improve agricultural productivity, or meet urgent needs.

​​

  • Social Cohesion:

    • SHGs foster a sense of community and collective responsibility, reducing social inequalities and empowering marginalized groups.

​​

  • Sustainability:

    • By focusing on self-reliance, SHGs create a sustainable model for community development that can operate independently over time.

​​

By fostering savings, credit access, and self-help initiatives, SHGs serve as a powerful tool for socio-economic transformation. Farmer’s Pride International (FPI) integrates this model into its Rural and Urban Agriculture Innovative Production Program (RUAIPP), tailoring it to the unique needs of communities worldwide while ensuring alignment with local norms and values.

​

  FPI MICROFINANCE SELF HELP GROUPS

Farmers Pride International encourages its members to form themselves into Microfinance self-help groups upon joining the organisation, these groups stand as credit schemes to help members to raise money for income-generating schemes some of which will end up being commercial farming groups, FPI further encourages them to work with it in its Agriculture investment projects, investing what they have raised into these projects will help them to learn to start and manage an income generation projects. For 6 months members of the newly founded branch will organise themselves and start small contributions from their monthly earnings and grow capital that will be borrowed by members specifically for starting projects with FPI guidance.  

1718445532952.png
Harvesting Tea Leaf

Role of SHG in building sustainable incomes through Agriculture

Self-help groups engaged in development activities have the potential to empower their members through the provision of knowledge, skills, motivation, and competencies that underpin sustainable agriculture

 

Self Help Farmer groups can be an important institution for the transformation of smallholder farming, increase productivity and incomes thereby reducing poverty. Agricultural policies across Africa should focus more on the stepping up of agriculture and farmers’ Self Help Groups and increase the market orientation of the smallholder farmers. Besides contributing toward economic development, these groups are important for social networking, group involvement helps to establish appropriate marketing relationships and to minimize input costs.

Read more on how to set up and manage an SHG>>

FPI's Categories of Self-Help Groups

Based on the FPI theory of change and activities, its SHG’s are broadly categorized into the following groups that cater to their requirements -

  • Groups formed exclusively for thrift and credit management for self-reliance.

  • Groups to improve the status and quality of life of poor rural women and children.

  • Groups to enhance the impact of development programmes.

  • Groups that aim to involve the community in planning and implementation of programs for sustained need-based development activities after withdrawal of external assistance.

  • The Savings Group is an entry point for members to get together and stimulate empowerment.

  • Groups for promoting farmers’ (men and/or women's) interests and to act as a collective unit to interact with extension agencies and build up their capacities in agriculture. Read more on how to start an SHG>>>>

Microfinance.webp
bottom of page