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Sachivalayam General Studies Add-ons (Part B Common) · Chapter 4

Women Empowerment: SHGs, SERP/Mepma, Community Organisations and Bank Linkage

What to remember

  • A Self-Help Group (SHG) is a small group of poor women who save regularly, lend to each other, and later borrow from banks. AP built one of India's largest SHG movements, supported by SERP in rural areas and Mepma in urban areas.
  • Community organisations are built in tiers: SHG, Village Organisation (VO), Mandal Samakhya (MS) and Zilla Samakhya (ZS). The federations give women collective strength.
  • Bank linkage means SHGs open savings accounts, take loans from banks, and repay on time, which builds credit history and reduces dependence on moneylenders.

1. Why women empowerment

Empowerment means giving women the knowledge, resources and decision-making power to control their lives. Its parts are economic (income, assets, credit), social (education, health, respect), political (participation in local bodies) and legal (rights and protection). Women's groups have also improved nutrition, school attendance and village sanitation.

Constitutional support: Article 14 and 15(3) (special provisions for women and children), Article 16, Article 39 (equal pay and livelihood) and Article 243D and 243T (reservation of seats for women in Panchayats and Municipalities, not less than one-third). AP has a higher share, 50 per cent, for women in local bodies. The Nari Shakti Vandan Adhiniyam (2023) provides one-third reservation for women in the Lok Sabha and State Assemblies, to take effect after the delimitation exercise that follows the Census.

2. Self-Help Groups

Features:

  • A group of about 10 to 20 members, usually women from similar poor families.
  • Meets regularly (often weekly), saves a small amount, and gives small loans to members from the group fund (internal lending).
  • Keeps books and registers; leaders are chosen from among members and rotated.
  • After some months, the group is rated and linked to a bank.

Panchasutra (five principles) often quoted for SHGs: regular meetings, regular savings, regular internal lending, regular repayment, and up-to-date books of accounts.

Advantages: collateral-free small credit, savings habit, lower interest than moneylenders, confidence, and a platform to take up social issues, such as alcohol, child marriage and school dropout.

Limits: weak book-keeping, domination by a few members, loans used for consumption, and poor market links for products.

3. Earlier steps and AP's institutions

StepMain idea
DWCRA (c. 1982)Development of Women and Children in Rural Areas: early group-based income scheme
Velugu (2000)AP's poverty programme with community organisations, run by SERP
Indira Kranthi Patham (IKP)Later name of the rural poverty reduction effort in AP
MepmaMission for Elimination of Poverty in Municipal Areas, for the urban poor
Stree NidhiA credit cooperative of SHG federations giving quick small loans

SERP (Society for Elimination of Rural Poverty): a State society under the Rural Development Department, set up in 2000 to organise the rural poor, mostly women, into SHGs and federations. It works on livelihoods, bank linkage, social development (health, nutrition, education), and market links for products. The National Rural Livelihoods Mission was built on this kind of model.

Mepma: does for urban areas what SERP does in rural areas. It supports urban women's SHGs, town-level and slum-level federations, livelihood training and bank loans. It works through the urban local bodies.

Stree Nidhi: a cooperative owned by SHG federations that gives credit quickly, especially where bank loans are delayed. It uses technology for lending and repayment.

4. Community-based organisations (CBOs): the tier system

LevelBodyRole
GroupSHGSavings, internal lending, loans
VillageVillage Organisation (VO)Federation of SHGs; monitors groups; village-level collection and support
MandalMandal Samakhya (MS)Federation of VOs; links to banks and officials
DistrictZilla Samakhya (ZS)Federation of MSs; policy voice and coordination

In towns, the equivalent bodies are SHGs, slum-level federations (SLFs) and town-level federations (TLFs). Federations also run local activities such as procurement centres, milk collection, and nutrition support. Each federation has paid community resource persons and book-keepers, many from the SHGs themselves.

5. Bank linkage

  • NABARD launched the SHG-Bank Linkage Programme (SHG-BLP) as a pilot in 1992; it became a mainstream programme from the mid-1990s. It is one of the largest microfinance programmes in the world.
  • Models: Model I - SHGs formed and financed by the bank itself; Model II - SHGs formed by NGOs and linked to banks; Model III - NGOs borrow from banks and on-lend to SHGs.
  • Steps: savings account in the SHG's name, rating after a few months, loan equal to a multiple of savings, regular repayment, and then repeat and larger loans.
  • Interest subvention: a Government scheme under which prompt-paying SHGs get loans at reduced effective interest, with the Government covering the difference. In AP, schemes have been known as Pavala Vaddi and Sunna Vaddi (zero-interest loans on prompt repayment). Check the latest official release for current rates and eligibility.
  • Bank Mitras/Business Correspondents (often SHG women) bring banking to villages.
  • Jan Dhan accounts, DBT and UPI help women hold their own accounts and receive benefits.
  • Credit linkage with livelihoods: dairy, poultry, tailoring, petty shops, agri-processing and e-commerce are common activities; MUDRA loans support micro-enterprises.

6. National missions

  • DAY-NRLM (Deendayal Antyodaya Yojana - National Rural Livelihoods Mission): started in 2011 as Aajeevika and renamed later; it mobilises rural poor women into SHGs and federations.
  • DAY-NULM (National Urban Livelihoods Mission, 2013): the urban equivalent; it replaced the Swarna Jayanti Shahari Rozgar Yojana (SJSRY).
  • These missions support capital for revolving funds, community investment funds, training, and market linkages.
  • Lakhpati Didi is a later national drive to help SHG women earn a good yearly income.

7. Other AP schemes for women (qualitative)

AP has run schemes for LPG connections (Deepam), pension insurance for SHG women (Abhaya Hastam), financial help for women from SC, ST, BC and minority communities in a certain age group (YSR Cheyutha), help to clear old SHG loan outstanding (YSR Aasara) and cash support to mothers for children's education (Amma Vodi, replaced from 2025 by Talliki Vandanam). Schemes change with governments, so check the latest official release. Village and ward secretariats have a Women Police and a Women and Child Welfare Assistant to help in safety and welfare matters.

7A. How an SHG works: records and a worked example

A group keeps a few simple books: a minutes (resolution) book, an attendance and savings register, a loan ledger and a bank passbook. Every meeting begins with savings collection, then loan repayments, then new loan requests, and ends with minutes signed by members.

*Worked example.* Twelve women save Rs 100 each per month. Monthly savings = 12 x 100 = Rs 1,200. After 10 months the group fund (without interest) = Rs 12,000. If a bank gives a loan equal to a multiple of savings, say four times, the loan limit = 4 x 12,000 = Rs 48,000. The group then lends within itself according to need, at an agreed monthly interest that stays in the group fund.

Role of the secretariat functionary: help women form and register groups, check that they have bank accounts, spread information on schemes, support the federation, and help with digital banking. The functionary should not take over leadership of the group; empowerment comes from the members running their own group.

8. Outcomes and challenges

Outcomes: better savings and credit access, greater voice in the Gram Sabha, more women contesting local elections, reduced moneylender dependence, and improved health and nutrition awareness.

Challenges: repayment stress, over-borrowing, low market access, risks of microfinance lenders (AP had a microfinance crisis in 2010), and the need for skills, digital training and safe workplaces.

Exam traps

  • SERP is rural; Mepma is urban.
  • DWCRA (c. 1982) is older than Velugu (2000).
  • SHG-BLP is by NABARD (1992 pilot); it is not an RBI scheme.
  • VO is at village level; MS is at mandal level; ZS is at district level.
  • Interest subvention means the Government covers part of the interest; the SHG does not get a free loan.
  • The legal reservation for women in Panchayats is at least one-third; AP follows 50 per cent.
  • The Nari Shakti Vandan Adhiniyam concerns the Lok Sabha and Assemblies, not Panchayats.
  • NRLM is rural; NULM is urban.

One-liners

  • 1. An SHG usually has 10 to 20 members.
  • 2. SERP was set up in 2000 to organise the rural poor.
  • 3. Mepma works for the urban poor.
  • 4. Stree Nidhi is a credit cooperative of SHG federations.
  • 5. The SHG tiers are SHG, VO, MS and ZS.
  • 6. NABARD started SHG-Bank Linkage in 1992.
  • 7. The Panchasutra has five principles.
  • 8. NRLM started in 2011 and NULM in 2013.
  • 9. Interest subvention rewards prompt repayment.
  • 10. Article 243D reserves one-third seats for women in Panchayats.
  • 11. The Nari Shakti Vandan Adhiniyam is of 2023.
  • 12. Jan Dhan, Aadhaar and mobile help women receive benefits directly.

Practice questions

  1. SERP in Andhra Pradesh stands for

    1. Society for Education of Rural People
    2. State Employment and Rural Planning
    3. State Enterprise for Rural Products
    4. Society for Elimination of Rural Poverty
    Answer

    D. Society for Elimination of Rural Poverty

    SERP organises the rural poor, mostly women, into SHGs.

  2. Mepma works mainly for

    1. tribal areas only
    2. large industries
    3. government employees
    4. the urban poor
    Answer

    D. the urban poor

    Mepma means Mission for Elimination of Poverty in Municipal Areas.

  3. An SHG usually consists of about

    1. 2 to 3 members
    2. 10 to 20 members
    3. 500 members
    4. 100 members
    Answer

    B. 10 to 20 members

    Small size helps in trust and regular meetings.

  4. The SHG-Bank Linkage Programme was started as a pilot by

    1. NABARD
    2. UIDAI
    3. SEBI
    4. IRDAI
    Answer

    A. NABARD

    NABARD began it in 1992.

  5. The correct order of community organisations from the lowest to the highest is

    1. Zilla Samakhya - Mandal Samakhya - VO - SHG
    2. SHG - Mandal Samakhya - VO - Zilla Samakhya
    3. SHG - VO - Mandal Samakhya - Zilla Samakhya
    4. VO - SHG - Zilla Samakhya - Mandal Samakhya
    Answer

    C. SHG - VO - Mandal Samakhya - Zilla Samakhya

    SHG, village, mandal, district.

  6. The first thing an SHG does after forming is to

    1. start a company
    2. take a big bank loan
    3. buy land
    4. start regular savings
    Answer

    D. start regular savings

    Savings come first, then internal lending.

  7. Statements: 1. SERP works mainly in rural areas. 2. Mepma works mainly in urban areas. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    C. Both 1 and 2

    Both are correct.

  8. Which is part of the Panchasutra of an SHG?

    1. Government jobs
    2. Regular meetings
    3. Annual elections
    4. Property mortgage
    Answer

    B. Regular meetings

    Meetings, savings, internal lending, repayment, and books.

  9. DWCRA stands for

    1. Development of Women and Children in Rural Areas
    2. District Women Credit and Rural Assistance
    3. Drought and Water Conservation in Rural Areas
    4. Distribution of Wages in Cooperative Rural Areas
    Answer

    A. Development of Women and Children in Rural Areas

    It was an early group-based scheme for women.

  10. Stree Nidhi is best described as

    1. a government bank
    2. a school for girls
    3. a credit cooperative of SHG federations
    4. a police unit
    Answer

    C. a credit cooperative of SHG federations

    It gives quick small loans to SHG women.

  11. Statements: 1. Velugu was a poverty reduction programme in AP started in 2000. 2. DWCRA is more recent than Velugu. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    A. 1 only

    DWCRA is older, from the early 1980s.

  12. Interest subvention for SHGs means

    1. the loan is never repaid
    2. the Government covers part of the interest on prompt repayment
    3. the bank pays interest on loans
    4. the borrower's interest is doubled
    Answer

    B. the Government covers part of the interest on prompt repayment

    It reduces the effective interest cost.

  13. In Model I of SHG-Bank linkage

    1. only NGOs lend
    2. banks lend only to NGOs
    3. banks themselves form and lend to SHGs
    4. SHGs lend to banks
    Answer

    C. banks themselves form and lend to SHGs

    Model I is the bank-led model.

  14. Which pair is correctly matched?

    1. SERP - urban
    2. NULM - rural
    3. Mepma - rural
    4. NRLM - rural
    Answer

    D. NRLM - rural

    NRLM is rural; NULM is urban; SERP is rural; Mepma is urban.

  15. Under the 73rd Amendment, the minimum reservation of seats for women in Panchayats is

    1. two-thirds
    2. one-fifth
    3. one-fourth
    4. one-third
    Answer

    D. one-third

    Article 243D reserves not less than one-third.

  16. Which of the following is a feature of SHG lending?

    1. Large loans against land
    2. Loans only to men
    3. No repayment
    4. Small loans without heavy collateral
    Answer

    D. Small loans without heavy collateral

    SHG loans are based on group trust.

  17. Statements: 1. The Nari Shakti Vandan Adhiniyam is about women's reservation in Parliament and Assemblies. 2. It is about Panchayat seats only. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    A. 1 only

    It covers the Lok Sabha and State Assemblies.

  18. DAY-NRLM began in

    1. 2023
    2. 2011
    3. 2000
    4. 1982
    Answer

    B. 2011

    It started in 2011 as Aajeevika.

  19. The National Urban Livelihoods Mission replaced

    1. PDS
    2. ICDS
    3. SJSRY
    4. MGNREGA
    Answer

    C. SJSRY

    NULM (2013) replaced the Swarna Jayanti Shahari Rozgar Yojana.

  20. A village organisation (VO) is a federation of

    1. SHGs
    2. districts
    3. Gram Panchayats
    4. banks
    Answer

    A. SHGs

    VOs are village federations of SHGs.

  21. In a typical SHG, group leaders are

    1. always the village head
    2. chosen from members and rotated
    3. appointed by the bank
    4. outsiders
    Answer

    B. chosen from members and rotated

    Rotation avoids domination by a few.

  22. What is the main purpose of a SHG's rating before linking to a bank?

    1. To check regular savings, meetings and records
    2. To check land ownership
    3. To fix its tax
    4. To approve its members' caste
    Answer

    A. To check regular savings, meetings and records

    Rating checks the group's discipline.

  23. Statements: 1. SHG-BLP is run by RBI. 2. SHG-BLP is a NABARD programme. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    B. 2 only

    NABARD launched it.

  24. Which is the principal benefit of SHG bank linkage for a poor woman?

    1. Exemption from all taxes
    2. Lifetime job
    3. Free land
    4. Access to credit and a credit history
    Answer

    D. Access to credit and a credit history

    Linkage builds credit access and reduces moneylender dependence.

  25. Stree Nidhi mainly meets the need of

    1. space research
    2. higher education
    3. quick small credit to SHG members
    4. tourism
    Answer

    C. quick small credit to SHG members

    It was set up for faster, cheaper loans.

  26. A woman asks how to start a poultry unit with SHG help. The functionary should first advise her to

    1. stop her savings
    2. buy land
    3. go to Delhi
    4. join or contact her SHG and the federation
    Answer

    D. join or contact her SHG and the federation

    SHGs and VOs provide training and loans.

  27. Which one is a risk of microfinance?

    1. Over-borrowing and harsh recovery
    2. Lower interest
    3. More employment
    4. Higher savings
    Answer

    A. Over-borrowing and harsh recovery

    The 2010 crisis in AP arose from such problems.

  28. The Abhaya Hastam scheme provided

    1. school uniforms
    2. crop insurance
    3. pension support to SHG women
    4. LPG cylinders
    Answer

    C. pension support to SHG women

    It was a pension scheme for SHG members.

  29. Deepam scheme of AP is related to

    1. bus passes
    2. LPG connections for poor women
    3. scholarships
    4. crop loans
    Answer

    B. LPG connections for poor women

    It provided gas connections to poor households.

  30. Statements: 1. Article 15(3) allows special provisions for women and children. 2. Article 39 mentions equal pay for equal work. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    C. Both 1 and 2

    Both are correct.

  31. Mepma functions through

    1. urban local bodies
    2. courts
    3. gram panchayats
    4. the Army
    Answer

    A. urban local bodies

    It supports urban women through municipalities.

  32. The tier in towns equivalent to the VO is the

    1. Mandal Samakhya
    2. Slum Level Federation
    3. Gram Sabha
    4. Zilla Samakhya
    Answer

    B. Slum Level Federation

    SLFs federate urban SHGs at slum or ward level.

  33. YSR Cheyutha provided help to women of

    1. all farmers
    2. all students
    3. government employees
    4. SC, ST, BC and minority communities in a certain age range
    Answer

    D. SC, ST, BC and minority communities in a certain age range

    It was a financial help scheme for women in a specific age group.

  34. Which is NOT an objective of empowerment of women?

    1. Social respect
    2. Dependence on moneylenders
    3. Political participation
    4. Economic independence
    Answer

    B. Dependence on moneylenders

    Empowerment reduces, not increases, dependence.

  35. Statements: 1. An SHG needs a minimum savings account in the group's name. 2. Loans from banks are given after rating of the group. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    C. Both 1 and 2

    Both are standard steps.

  36. The word 'Samakhya' in AP's CBO means

    1. federation
    2. tax
    3. court
    4. bank
    Answer

    A. federation

    Samakhya is a federation of groups.

  37. Which of the following is a local use of SHG federations?

    1. Running courts
    2. Printing currency
    3. Collecting income tax
    4. Procurement of produce and nutrition support
    Answer

    D. Procurement of produce and nutrition support

    Federations manage local livelihood and welfare activities.

  38. In Model III of SHG-bank linkage

    1. NGOs borrow from banks and on-lend to SHGs
    2. banks fund Government
    3. SHGs are banks
    4. women fund NGOs
    Answer

    A. NGOs borrow from banks and on-lend to SHGs

    NGOs act as financial intermediaries.

  39. Statements: 1. Mepma is for urban poor. 2. SERP was set up in 1982. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    A. 1 only

    SERP was set up in 2000.

  40. MUDRA loans are meant for

    1. foreign trade
    2. micro enterprises
    3. defence
    4. big industries
    Answer

    B. micro enterprises

    MUDRA supports small businesses and entrepreneurs.

  41. The 2023 women's reservation law is called

    1. Mahila Samman Act
    2. Beti Bachao Act
    3. Stree Shakti Act
    4. Nari Shakti Vandan Adhiniyam
    Answer

    D. Nari Shakti Vandan Adhiniyam

    It reserves one-third seats in Lok Sabha and Assemblies.

  42. Which of the following helps SHG women to hold their own bank accounts?

    1. PDS
    2. ICDS
    3. Jan Dhan Yojana
    4. MGNREGA
    Answer

    C. Jan Dhan Yojana

    Jan Dhan gives basic accounts.

  43. Which one is a livelihood activity commonly taken up by SHG women?

    1. Running a stock exchange
    2. Steel manufacturing
    3. Operating a railway
    4. Dairy and tailoring
    Answer

    D. Dairy and tailoring

    Small, low-capital activities are typical.

  44. Statements: 1. Lakhpati Didi is a national drive for SHG women. 2. It is meant only for urban men. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    A. 1 only

    It targets SHG women.

  45. Which Article provides for reservation of seats for women in Municipalities?

    1. Article 243D
    2. Article 330
    3. Article 243T
    4. Article 21
    Answer

    C. Article 243T

    Article 243T covers Municipalities; Article 243D covers Panchayats.

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