The basic idea behind the SHGs is meant to create self – employment opportunities for the poor. The SHGs help poor borrowers to overcome the problem of lack of collateral. They can get timely loans for a variety of purposes and at a reasonable interest rate. Moreover, SHGs are the building blocks of organizations of rural poor.

A "SHG" is an informal association to enhance the member's financial security as primary focus and other common interest of members such as area development,,, awareness,,, motivation,,, leadership,,, training and associating in other social inter-mediation programmes for the benefit of the entire community...

Basic Idea behind SHGs for the Poor

Introduction
Self-Help Groups (SHGs) for the poor are a concept that aims to empower individuals living in poverty by providing them with a platform to come together, save money, access credit, and engage in various income-generating activities. The basic idea behind SHGs is to promote financial inclusion, build social capital, and enhance the overall well-being of marginalized communities.

1. Formation of Self-Help Groups
SHGs are formed by bringing together a small group of individuals, typically from the same community or locality, who face similar socio-economic challenges. The group members voluntarily contribute a small amount of money regularly, which forms a common pool of funds. They also participate in regular meetings to discuss their financial needs, share experiences, and make collective decisions.

2. Savings and Credit
One of the primary objectives of SHGs is to encourage savings among its members. The group members contribute a fixed amount of money into the common pool, which is then used to provide loans to the members in need. This system allows the poor to accumulate savings over time and provides them with access to affordable credit without relying on traditional banking institutions, which may be inaccessible or unaffordable for them.

3. Income Generation
SHGs also focus on promoting income-generating activities among their members. The pooled funds can be utilized to provide loans for starting small businesses or engaging in agricultural activities. By supporting and guiding their members in entrepreneurial endeavors, SHGs enable individuals to generate a sustainable source of income, thereby breaking the cycle of poverty.

4. Skill Development and Capacity Building
SHGs not only provide financial support but also emphasize skill development and capacity building. They organize training programs, workshops, and awareness campaigns to enhance the knowledge and abilities of their members. These initiatives aim to equip individuals with essential skills, such as entrepreneurship, financial management, and marketing, thereby empowering them to make informed decisions and improve their livelihoods.

5. Social Empowerment and Collective Action
Another significant aspect of SHGs is the social empowerment they bring to their members. By coming together, individuals gain a collective voice and can address common issues affecting their lives, such as gender inequality, access to healthcare, education, and social welfare. SHGs encourage collective action, enabling members to advocate for their rights, demand better services, and create a supportive network within their community.

Conclusion
The basic idea behind SHGs for the poor is to provide a platform for marginalized individuals to come together, pool their resources, access credit, engage in income-generating activities, and enhance their overall well-being. These groups promote financial inclusion, skill development, and social empowerment, ultimately helping individuals lift themselves out of poverty and improve their quality of life.