Performance of Self-Help Groups (SHGs) in Accessing Formal Banking Services: Evidence from Rural Assam

Abstract

The Self-Help Group (SHG) movement has emerged as a vital instrument for promoting financial inclusion, women empowerment, and rural development in India. The present study, titled “Performance of Self-Help Groups (SHGs) in Accessing Formal Banking Services: Evidence from Rural Assam,” examines the extent to which SHGs in Nagaon District have been able to access and utilize formal banking services under the SHG–Bank Linkage Programme (SBLP). Using both primary and secondary data, the study adopts a descriptive and analytical research design covering 100 SHG members from 10 groups operating under the Assam State Rural Livelihood Mission. The findings reveal that most SHGs have successfully opened bank accounts and availed loans for productive purposes such as agriculture, handicrafts, and micro-enterprises. The repayment performance is highly satisfactory, with 80 percent of SHGs maintaining regular loan repayment schedules. However, challenges such as lengthy documentation, limited digital literacy, and procedural delays continue to affect accessibility. Statistical analysis using correlation (r = +0.78) and hypothesis testing confirms a strong and significant relationship between banking access and SHG performance. The study concludes that enhanced financial literacy, digital training, and simplified banking procedures are essential for improving SHG efficiency and ensuring sustainable financial inclusion in rural Assam.