A Psychological Study of Identifying SHGS’ Group Level Challenges and its Impact on Sustainability of SHGS’ in Central India

Abstract

Purpose:

The researcher in this article examines the numerous difficulties self-help groups encounter on a group level, which fuels an increase in their outstanding loans and is currently the biggest issue in India's central region. The original impetus behind the establishment of self-help groups has undergone a transformation over the course of time. The present research endeavours to elucidate the determinants that influence the repayment behaviour of members with respect to loans. The objective of this manuscript is to (1) identify group level challenges of SHGs (2) to identify reasons behind rise in outstanding loan (3) to assess the impact of loan outstanding ratio on sustainability of a self-help groups.

Design: The present investigation employs a quantitative research design to explicate the phenomenon under evaluation. The selection of locations is based on the historical significance of Madhya Pradesh and Chhattisgarh in India, as well as the notable growth in the number of self-help groups (SHGs) which currently stands at an aggregate of 6,22,393 number of SHG’s. A total of 384 respondents were included in the study, with data collected from members residing in both Madhya Pradesh and Chhattisgarh.

Findings: Concerns regarding the inappropriate use of available finances, unfavourable peer pressure, and inadequate record keeping, with the exception of a lack of repaying culture on the other hand when researchers regressed the sustainability of SHG in central India as a dependent variable, they discovered that the group level problem of SHG in central India has a considerable impact on the sustainability of SHG in central India.

Practical implications: Today non-participation of Self-Help Groups (SHGs) is resulting in adverse consequences. It is imperative for non-governmental organisations (NGOs) and governmental bodies to exercise close scrutiny over self-help groups in order to ascertain their efficacy in managing loans. It is recommended that the loan be repaid promptly and that the borrowed funds be utilised for a profit-generating endeavour in order to foster growth.