Self-help groups create significant social impact. It is a social mobilization process of the poor for economic uplift and not merely a bank loan-enabler. Its success depends on unified action on the part of various stakeholders. This endeavour should result in comprehensive financing of target group for more effective performance.

As we march ahead towards becoming an economic superpower through the power of knowledge and hard work, an iconic story is being written in the villages around the country about the empowerment of the rural poor, especially the women folk. What distinguishes this story from the rest of the development initiatives is the fact that it is the power within which drives this movement. It is a story of the power of self-help among the rural poor originated as a reaction to the continued negligence and marginalization in the development politics of the country. A movement which has reached formidable proportion with over three million Self-Help Groups (SHGs) (over 90% of all women groups) covering over 40 million poor families seeking an identity of its own and making it undoubtedly the largest microfinance initiative anywhere in the world. The concept of self-help among the poor as a tool for their own development was first mooted by a few Non-Government Organization (NGO) volunteers a couple of decades ago. It was a result of the realization that the rural poor, especially the rural women, had to depend upon themselves for their survival. The socio, economic and political fabric of the country was so skewed against the poor and the women that they hardly counted in the development matrix of the country.

Although the formal banking system in the country was expanded considerably after the nationalization of banks in 1969, they continued to function with rigid systems and procedures with too much emphasis on security rather than the needs of the people. Elite bankers with obvious urban mindset always considered the poor as the `unbankables'. A few enlightened social workers, therefore, mooted the idea of organizing the rural poor, particularly the women, into small groups and imbibe the spirit of self-help. As economic independence was vital to the empowerment process, it was thought imperative that the group members find the necessary resources to fund their needs.

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