From Microcredit to Microenterprise: SHGs as Engines of Women’s Entrepreneurial Growth

Abstract

Self-Help Groups (SHGs) have become a powerful tool for increasing women’s economic participation by connecting access to microcredit with microenterprise growth. This study looks at how SHGs support women’s entrepreneurial development. It focuses on how group financial practices can turn into lasting business efforts. SHGs help women save money, access microcredit, develop skills, and receive support from peers. This allows them to move from basic economic activities to income-generating microenterprises.
The study shows that, in addition to financial inclusion, SHGs build entrepreneurial confidence, improve decision-making skills, and strengthen social connections among women members. The collective approach lowers individual risk, improves credit habits, and promotes innovation at the community level. Insights from research reveal that being part of SHGs significantly boosts business stability, income consistency, and socio-economic empowerment for women entrepreneurs.
However, obstacles like limited market access, insufficient training, and difficulties in scaling still hinder long-term growth. The study concludes that enhancing SHG-led entrepreneurship with policy support, skill development, and market connections can drive inclusive growth and strengthen women’s roles as active contributors to local economies.