6 – Grassroots Entrepreneurs through Self Help Groups

Introduction

Women in India are becoming more involved in areas of the economy traditionally considered men’s realm. On the other hand, women’s entrepreneurship is still in its infancy in India, particularly in rural areas. Women’s entrepreneurship has recently become a topic of discussion. Women have become more aware of their existence, rights, and working conditions. Self-help groups (SHGs) are becoming increasingly vital for women who want to start a business with the help of microfinance. SHGs are becoming more common not only among rural women entrepreneurs but also among metropolitan women entrepreneurs.

In a modified version, India has adopted Bangladesh’s model. Microfinance has evolved as a significant tool in the new economy for alleviating poverty and empowering women. Self-help groups (SHGs) and credit management groups have sprung up in India due to the availability of microfinance. As a result, the SHG movement has spread across India. SHG members are increasingly turning into entrepreneurs. Women have essential qualities such as innovative thinking and foresight, the ability to make quick and effective decisions, the ability to mobilise and marshal resources, strong determination and self-confidence, the willingness to take risks, the ability to accept change at the right time, and access to and alertness to the latest scientific and technological information. As a result, they are actively running their businesses with the help of SHGs. Food processing and preservation, catering services and fast food centres, interior decoration, DTP and Bookbinding, dairy, poultry, household appliances, stationeries, packing and packaging, diagnostic lab and pathology clinics, communication centres with telecom, fax, browsing, and Xeroxing facilities, readymade garments, embroidery and fashion designing, retail selling, art and painting works, and hiring of warehouses and godowns are all businesses that they are actively involved in. Though women’s entrepreneurship is a relatively new phenomenon in India, it rose to prominence in the late 1970s; We now witness an increasing number of women venturing into various business and economic activities, as well as the service sector. Though women’s entrepreneurship began in urban regions, it has recently spread to rural ones.

6.1 Definition and Meaning of Grassroots Entrepreneurs

Civic activists who develop campaigns or other organisational endeavours to address societal problems—in our case, to increase liberty—are known as grassroots entrepreneurs. Social entrepreneurship is another name for the concept. While profit is a genuine social benefit for business entrepreneurs, grassroots endeavours have different goals, such as winning school choice legislation or rallying against a tax hike.

“A person who pursues an innovative idea with the potential to remedy a community problem,” says a grassroots entrepreneur. These people are willing to take the risk and put in the effort to make a positive difference in society through their efforts.”

Kalamandir, for example, works with tribals in Jharkhand to encourage, cultivate, and spread a finer aesthetic sense among individuals, communities, organisations, and social groupings, bridging the gap between producers and consumers.

Entrepreneurs change the face of business, and grassroots entrepreneurs change society by seizing opportunities that others miss, changing processes, innovating new ways, and developing long-term solutions to improve society. Unlike business entrepreneurs, who are driven by profit, grassroots entrepreneurs are driven by a desire to better society. Despite this distinction, grassroots entrepreneurs are just as imaginative and change-oriented as their corporate counterparts, seeking new and better solutions to society’s issues.

Grassroots entrepreneurs are:

1. Ambitious: Grassroots entrepreneurs address significant social challenges, such as raising low-income students’ college enrollment rates and combating poverty in emerging countries.
2. Mission-driven: The key criterion of a successful grassroots entrepreneur is creating social value, not wealth. While money accumulation is an essential component of the process, it is not the goal in and of itself. The real goal is to promote systemic societal transformation.
3. Strategic: Grassroots entrepreneurs, like commercial entrepreneurs, perceive and act on opportunities to change the system, find solutions, and design new techniques that generate social value. Like the best commercial entrepreneurs, they are laser-focused and hard-driving—even ruthless—in pursuing a social purpose.
4. Resourceful: Grassroots entrepreneurs have limited access to finance and typical market support structures since they work in a social setting rather than the corporate sector.
5. Results-oriented: Ultimately, grassroots entrepreneurs want to see measurable results. These findings alter existing realities, provide new opportunities for the underprivileged, and unleash society’s potential for social transformation.

Today, grassroots entrepreneurs work in various countries to provide opportunities for those who might otherwise be trapped in hopeless lives.

Social entrepreneurs share a dedication to pioneering innovation that reshapes society and benefits humanity, whether they work on a local or international scale. Simply put, they are pragmatic problem solvers who aren’t scared to take on the world’s most challenging issues.

Example: Prof. Muhammad Yunus, who won the Nobel Peace Prize for his work expanding micro-lending to the poor in Bangladesh, comedian Drew Carey, who produces pro-freedom videos with Reason TV, and Ward Connerly, who pioneered ballot measures opposing racial quotas in state governments, are all well-known grassroots entrepreneurs.

Microfinance organisations, educational initiatives, offering financial services in underserved areas, and assisting children orphaned by epidemic sickness are all examples of grassroots entrepreneurship. A social entrepreneur’s main purpose is not to profit but to make widespread societal changes. To succeed in his or her cause, a social entrepreneur must be financially competent.

6.2 Self-Help Groups

A Self-Help Group (SHG) is a group of 12 to 20 women from similar socioeconomic backgrounds who choose to work together for their advancement. The ability of the SHG to instil sound habits of thrift, saving, and banking among its members is its distinguishing feature. The SHG idea emphasises regular savings, frequent meetings, mandatory attendance, and systematic training. From among themselves, each group chooses one animator and two spokesmen. The animator is in charge of leading the group and keeping track of the various registers. The representatives assist the animator and keep track of the group’s finances.

SHG is a small group of rural poor people who have voluntarily gotten together to create a group to improve their social and economic position.

1. It might be formal (registered) or informal (unregistered).
2. The notions of thrift, credit, and self-help are emphasised in this concept.
3. SHG members agree to save and contribute to a common fund regularly.
4. The members agree to use this common fund and any other funds (such as grants and bank loans) they may acquire to make small loans to deserving members based on the group’s choice.

6.2.1 SHGs are required.

The rural poor are unable to work for a variety of reasons. The majority of them are socially backward, illiterate, lack motivation, and have a poor economic foundation. Individually, the poor are not only in terms of socioeconomic status but also lack access to knowledge and information, which are critical elements in today’s growth process. They can, however, overcome many of these flaws when they work together. As a result, SHGs are required, which are defined as follows:

1. To mobilise individual members’ resources to benefit the group’s economic development.
2. To improve the poor’s living conditions in rural areas.
3. To instil in the poor a habit of saving from their meagre wages.
4. Members can make use of local resources that are otherwise unused.
5. To activate individual skills in the interest of the group.
6. It is essential to raise knowledge of one’s rights and responsibilities and to make people aware of them.
7. To provide financial assistance to needy members and release them from predatory money lenders’ clutches.
8. To build entrepreneurial skills by exploiting natural aptitude and ability.
9. To identify difficulties that members are having and to come up with solutions that are realistic to adopt.
10. To serve as a conduit for the village’s socioeconomic development.
11. We are establishing relationships with non-governmental organisations (NGOs) for financial and non-financial aid and support.
12. To plan skill development training to foster entrepreneurial abilities.
13. To foster mutual understanding, trust, and self-confidence in believing that “each one is for everyone.”
14. To foster teamwork based on the principle that “two heads are better than one.”
15. To cultivate leadership characteristics to lead the group and develop followers to attain the objectives.
16. It can be used as an effective delivery channel for rural finance, reducing the gap between rural and urban areas.

6.3 SHG Microfinance as a Tool for Grassroot Entrepreneurship

Women in rural areas now have a secondary status in social life, economic activity, and family decision-making. Many socioeconomic barriers limit their ability to engage in productive work, generate employment, and income-generating activities. As a result, policies promoting women’s empowerment and entrepreneurship must be developed.

Undeniably, if women are given proper skills and decision-making opportunities, they will demonstrate that they are, if not superior, at least equal to males. Women are considered good leaders in situations requiring collaboration, group integration, listening skills, and motivation. According to recent trends in India and even globally, women are significantly superior to men in several facets of development. The only issue is that women have had fewer opportunities to pursue many spheres of economic activity. As a result, it is critical to empower women today by allowing them to participate in various economic activities to become economically self-sufficient and socially confident in their endeavours.

Microfinance through self-help groups is vital in grassroots entrepreneurship and women’s empowerment. As a member of a group, an economically disadvantaged individual acquires strength. Furthermore, SHG financing lowers transaction costs for both lenders and borrowers. While lenders are responsible for a single SHG account rather than many small individual accounts, borrowers who join an SHG save money on travel (to and from the branch and other locations) to complete paperwork and on lost workdays canvassing for loans. A Non-Governmental Organization (NGO) is a non-profit organisation dedicated to social intermediation, such as forming microentrepreneur SHGs and entrusting them to banks for credit linkage, and financial intermediation, such as borrowing large sums of money from banks for on-lending to SHGs.

Microcredit appears to enhance the lives of the poor by allowing them to buy and invest more, allowing them to move up the economic ladder. As a result, these tiny loans appear to positively impact poverty by encouraging enterprise and self-reliance among the poor. SHGs have evolved into grass-roots social, economic, and financial intermediation institutions, concentrating on the underprivileged. The SBLP is “overwhelmingly founded on the notion of financial services being linked to the cash flows of low-income client groups, and hence aim to facilitate relatively frequent and extremely tiny or micro-loan and saving transactions,” according to its website (Sinha, 2003). Microfinance in India served nearly 33 million Indians in 2007–08, an increase of 9 million over the previous year, through its two major routes: the Self-Help Group Bank Linkage Programme (SBLP) and Microfinance Institutions (MFIs). In India, women account for four out of every five microfinance consumers.

Self-help groups are typically informal organisations whose members have a common understanding of the need for and necessity of collective action. These organisations encourage members to save money and combine their resources for multi-dimensional development.

SHGs typically include 10 to 20 members, and it is assumed that inside the group, there will be a genuinely democratic culture in which all members must actively engage in the decision-making process.

SHG membership guarantees that women are socially and politically empowered.

The SHG concept revitalises rural women by assisting them in breaking the terrible cycle of poverty, allowing them to become economically viable.

Self-help groups (SHGs) have successfully empowered rural women through entrepreneurial initiatives. Their income, spending, and saving habits have increased, significantly impacting their social and economic lives.

Rang De is a good example. It is a peer-to-peer internet platform that makes low-cost microcredit accessible to India’s rural and urban poor. Ramakrishna and Smita Ram founded it in January 2008.

According to a study, people are becoming more socially aware of themselves, their family’s social position, the size of their social circle, and their involvement in intrafamily and business decision-making. Rural women’s self-confidence, self-reliance, and independence increased due to their participation in SHG entrepreneurship and other activities. SHGs could be linked to literacy programmes run by the government, and they could be made an integral part of SHG activities. SHG members may benefit from increased literacy levels to overcome cognitive limits and better understand government policies, technical understanding, and required abilities.

Rural women may be persuaded to take out loans to start their businesses. Self-help groups raise awareness about various lending facilities, financial incentives, and subsidies. Because women are less technologically empowered than men, they will be forced to use labour-saving, drudgery-reducing, income-generating, and productivity-increasing technology. Entrepreneurship education and training could be provided at all levels of education, starting with elementary school. It could assist rural women in developing a positive self-concept, self-reliance, self-confidence, and independence.