Self-Help Groups Have Trippled Women's Incomes Since 2019: Report

A report by the State Bank of India observed that female members of self-help groups (SHGs) have seen a striking boost in their income over the last five years. Soumya Kanti Ghosh, a Chief Economic Adviser with the SBI said in the March 11 report that women's incomes have more than tripled between the Financial Years 2019 and 2024. Ghosh said that the COVID-19 pandemic created opportunities for SHGs to "exponentially" increase their activities. Taking 2018-19 as the base year, the report found that the income credited in female SHG members' bank accounts is set to increase from Rs 100 to Rs 307 as per the data available for the first nine months of FY23.

According to Money Control, the report noted that the biggest income boost was seen in the case of urban SHG members who, this year, are set to earn Rs 462 if their income in 2018-19 is assumed to be Rs 100. Moreover, while rural SHG members have seen a smaller increase in their incomes, 65% of them have moved into Upper Quantiles in FY24 when compared to FY19.

Women's Participation In Economy

Notably, the rural female Labour Force Participation Rate (LFPR) rose from 21.7% in 2017-18 (July-June) to 34.6% in 2022-23, according to the Statistics Ministry's Periodic Labour Force Survey, showing a rising inclination of women's contribution to the economy. "The jump in Rural Female LFPR is significantly correlated with the rise in Female SHG members' income… an 11% jump associated with 2.25 times jump in income in only 4 years," Economist Soumya Kanti Ghosh said in the latest SBI report.

The report showed that the biggest income jump – 4.7 times – has been for those younger than 27 years of age. When scrutinised based on location, the SBI data shows that while Southern Indian states, where SHGs first started, have consistently shown great results, other States are catching on too. Women of Uttarakhand, Punjab, Gujarat, Odisha, and Bihar are increasingly benefiting from SHGs. 

Andhra Pradesh and Telangana are leaders in SHGs, however, new players from states like Tamil Nadu, Kerala, Punjab, and Gujarat have also significantly increased female SHG incomes in recent times. The report delves into the government's Lakhpati Didi scheme, which aims to train women in SHGs to earn a sustainable income of at least 1 lakh per annum. "SHG is now a mass movement… By FY27, most states in India will have Lakhpati Didis," Ghosh wrote. 

The study also found that SHG members seem to favour transacting digitally, with expenditure via ATMs nearly constant from 2018-19 to 2022-23. Moreover, nearly 73% of rural SHG point-of-sale transactions are in metro regions, while 30.5% of rural ATM transactions are in urban and metro regions. 

"Income from SHG gives the members purchasing power to spend in not just their own district but also in other districts of their own as well as other states. Distance travelled by SHG members can be to the nearest district to as far as within the State from 20 km to 2,000 km," the report reads.