Role of Self-Help Groups in Promoting Micro-Entrepreneurship

Abstract

This study examines the role of Self-Help Groups (SHGs) in promoting micro-entrepreneurship and improving the economic condition of members through small business activities. The study focuses on analysing the influence of financial literacy, access to micro-credit, income-generation loans, government micro-enterprise schemes, and training and skill development support on entrepreneurial growth. The research adopted a descriptive research design and collected primary data through a structured questionnaire from 100 SHG members in selected rural and semi-urban areas of Mulbagal Taluk. Secondary data was collected from reports, journals, books, and websites. Regression analysis was used to examine the relationship between selected variables and micro-entrepreneurship. The findings indicate that SHGs support entrepreneurship by improving financial access, promoting savings, encouraging business participation, and developing entrepreneurial skills. Training and skill development support and financial literacy showed a stronger positive influence compared to other factors. However, challenges such as limited awareness, unequal access to credit, and low technology adoption continue to affect growth. The study concludes that strengthening financial education, improving training programs, and increasing institutional support can enhance sustainable micro- entrepreneurship and long-term economic development. The findings show that SHGs play an important role in encouraging entrepreneurship by improving access to finance, promoting savings, supporting income-generating activities, and developing members’ entrepreneurial skills. Among the factors studied, training and skill development support and financial literacy have a stronger positive influence on micro-entrepreneurship. However, some members continue to face difficulties such as limited financial awareness, unequal access to credit, inadequate knowledge of government schemes, and low adoption of technology. These challenges restrict the growth and sustainability of micro-enterprises. The study concludes that SHGs can contribute significantly to economic development when members receive proper financial education, regular skill training, easier access to credit, and stronger institutional support. Strengthening these areas can help SHG members establish sustainable businesses, increase income, improve their living standards, and achieve greater economic independence.