2020 · GS Paper 2 · Q17 · 15 marks
"Micro-Finance as an anti-poverty vaccine, is aimed at asset creation and income security of the rural poor in India". Evaluate the role of the Self Help Groups in achieving the twin objectives along with empowering women in rural India.
In short
Women's SHGs have delivered income security and greater voice for rural women, but durable asset creation remains partial because most groups stall at petty trade and loans are sometimes controlled by men. DAY-NRLM has mobilised over 10.05 crore rural women households into SHGs.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 295 words
Productive assets
Repeat bank-linked loans finance cattle, goats and village shops, and the Lakhpati Didi target, now 6 crore women (PIB, 2026), measures income earned, not loans given.
Income security
Group savings carry households through illness and crop failure without distress sales.
Modest gains
The 2015 Hyderabad evaluation by Banerjee, Duflo and co-authors found more business investment but no rise in average consumption.
Debt-trap risk
The 2010 Andhra Pradesh crisis exposed multiple lending, and the RBI's 2022 framework now caps repayments at half of household income.
Agency and voice
Credit in a woman's name raises her household say, and Bihar's Jeevika didis pressed for the 2016 liquor ban.
Proxy borrowing
Where men control the loan, women bear the debt without the gain (Goetz and Sen Gupta, 1996).
Enterprise gap
a 2025 NITI Aayog WEP and MicroSave Consulting report found 30% of women-led individual enterprises were not credit-ready.
Credit plus
Skills, insurance, federations and credit-bureau reporting should accompany every loan.
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SHGs6 questions
Asked in 6 of 14 sittings since 2013
- 2021Can the vicious cycle of gender inequality, poverty and malnutrition be broken through microfinancing of women SHGs? Explain with examples.
- 2017"The emergence of the Self-Help Groups (SHGs) in contemporary times points to the slow but steady withdrawal of the State from developmental activities." Examine the role of the SHGs in developmental activities and the measures taken by the Government of India to promote the SHGs.
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Question from the official UPSC Civil Services (Main) Examination 2020 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.