How India’s women-led self-help groups are redefining rural entrepreneurship

At a bustling fairground in India, Saroj tends to curious customers drawn by the aroma of traditional sweets. Once confined to dairy farming in her village, she now leads a team of women as an entrepreneur, crafting a new narrative of rural enterprise. With stories like hers at the fore, a quiet revolution is brewing in the rural economy of India.

Across the country, over 12 million Self-Help Groups (SHGs), of which nearly 88 per cent are women-led, are transforming rural women from informal labourers into micro-entrepreneurs, artisans, and leaders.

But behind the success stories and record sales lies a more complex question: can these collectives scale sustainably, bridge structural inequities, and what is required to offer a solution to India’s stagnating female labour force participation?

According to the Periodic
Labour Force Survey (2025), approximately 71.6 per cent of rural women are self employed. Despite this important contribution to the country’s economy, women have very limited access to social safety nets and suffer from systemic disadvantages that prevent them from escaping the grip of poverty despite their dedicated hard work.

Genesis of Self-Help Groups (SHGs)

In the 1970s and 1980s, the concept of wage-based employment began to emerge not just as a form of livelihood, but as a right. An essential form of support aimed at creating systems where dignified employment could be guaranteed. It wasn’t only about providing working capital; it was also about offering freedom from exploitative or demeaning forms of labour.

After the initial phase of capital infusion, Self-Help Groups (SHGs) which proliferated in the early 1990’s began to rely on a revolving fund model. Evidence from that period shows that most SHGs utilized this revolving fund primarily to meet their everyday livelihood needs. Over time, this approach reflected a growing demand for autonomy and economic self-reliance among rural women.

The
World Bank terms Self-Help Groups as a unique and dominant model of financial inclusion in India, particularly for women and micro enterprises. At the very basic level, the idea of a self-help group is the ability to “help one’s own self.” The aim is to instill financial literacy in rural women and support them to use their skills to attain financial independence.

Firstpost spoke to Dr. Ruchira Bhattacharya at the National Institute of Rural Development and Panchayati Raj to unpack the ground realities of this initiative. In a virtual conversation, Dr. Bhattacharya explains, “Self Help Group-based programs promulgate the collective movement by strengthening the federations toward higher order, linking them with banks, supply channels, markets and monitoring their progress.”

Apart from giving finance and capital for women’s livelihood and income, an equally important part of the micro-finance collectives is capacity building, awareness creation and empowerment of its recipients – i.e. women.

“Women’s groups offer both direct and indirect pathways to economic empowerment, making them an exciting tool for policy practitioners and implementers seeking to further women’s economic interests in South Asia,” states the World Bank.

Digital Leap: A double-edged sword?

Beyond just a government scheme, this initiative has garnered attention for its focus on helping women to channelise their skills and creativity to earn a livelihood. Recently, several
E-commerce companies, including Amazon and Flipkart, have agreed to provide a space for the products made by these women.

For instance, Amazon Saheli, an Amazon initiative to bring to the fore locally made products from women entrepreneurs, has officially partnered with Self-Help groups for training, marketing support, and enhancing customer visibility.

As of July 2025, well over nine million Self Help Groups have been formed in India as per data provided by the Ministry of Rural Development. Platforms like E-SARAS which is an E-commerce App tailored for self-help groups, leverages digital technology to empower craftswomen.

The sales are ever-expanding as the ‘Saras Ajeevika Mela,’ an open fair for product display and sales, broke a 26-year-old record by registering sales of 80 million rupees at the India International Trade Fair held in November last year, said the Ministry. The self-help groups are now eyeing export potential with the help of global E-commerce platforms. However, data on export sales are yet to be released.

“With the help of digital platforms, women in our community are able to earn a livelihood and gain access to the market to showcase our skills,” said Shalini Soni, a Self-help group leader in India, known for crafting exquisite traditional handbags.

Providing digital inclusion is just the first step in the journey. Many women who are part of these self-help groups do not have formal training to make any product. For instance, if a collective makes pickles, no two bottles will likely be the same; therefore, quality control becomes a huge hindrance.

Shedding light on this Dr. Bhattacharya opines, “Digital marketplaces have been extremely beneficial for Self-Help Groups that have formalized into companies and built recognizable brands. But for smaller SHGs, sudden exposure to intense digital competition can be detrimental, putting immense pressure on capacity and quality. It’s not a black-and-white picture.”

Redefining Work and Womanhood

When the word ‘
Entrepreneurship’ comes to mind, an image of a corporate set-up is likely to pop-up. However, this notion is up for a transformation as women from remote villages in India are coming out of the closed doors, reviving traditional arts and crafts and travelling all over the country to sell their products.

One such woman is Neelam Yadav from Pataudi, Haryana. She began her journey in 2017 with a group of eleven women, her products are now known across the country.

“I started Dev-Mahila SHG with pool-funding. After a few years, we took a loan from a Gramin bank (Rural bank) and created our own brand of pickles and spices using the traditional recipes of our mothers and grandmothers. Today, we travel to different fairs and marketplaces to sell them.”

Like Neelam, several women in India are running small-scale businesses and, in some cases, they are also the key breadwinners in their families.

A recent study published in the Journal of Population Economics by Deshpande, Khanna, and Walia (2024) titled ‘An Indian Enigma? Labour market impacts of the world’s largest livelihoods program’ finds that SHG membership is positively associated with labour force participation and employment of rural women. The study further states, “We also find evidence that SHG membership is associated with a shift towards self-employment and a crowd-out of casual work among the employed.”

Setting an example for the women of her village, Saroj from
Gurugram, Haryana balances her household activities of Animal Husbandry and dessert-making for her Self-Help Group.

“Self Help groups have really helped us come out of our homes, where we were restricted to household chores and child-rearing.” Talking about the significance of skill-based training, Saroj has witnessed positive growth in her earnings, “My income has increased from 10 thousand rupees to nearly 35 thousand rupees per month in the past few years.”

Annual fairs like the ‘SARAS Ajeevika Mela’ are a crucial time for all the Self Help Groups across India as these fairs attract immense footfalls, thus making it a key platform for product showcase and brand building.

Apart from this, diverse forms of handloom, handicraft, and organic food products also uplift the rich cultural heritage of India. Exquisite jewellery, traditional delicacies, fabrics, spices, and souvenirs find pride of place in these stalls bustling with excitement.

Evidence points to a link between SHG mobilization and political participation and leadership of women. Javed, Zahra and Boudet in a study titled, ‘What do we know about interventions to increase women’s economic participation and empowerment in South Asia?,’ find that collective groups can positively affect women’s savings, civic inclusion (meaning participation in political and social life), and social capital, but are less successful in improving incomes and labour market participation, especially among programs operating at scale.

In an email conversation with Firstpost, the head of Self-Employed Women’s Association of India (SEWA) and award-winning social worker, Reema Nanavaty, noted that work and skill are extremely important to make the role of women and girls more meaningful and productive.

While the economy of scale seems to have a dead end as far as the growth of the self-help groups is concerned, the economy of scope has massive potential but not without policy interventions and structural changes. As of this date, most of the self-help groups are not in a position to prosper independently without state support.

Nanavaty opines, “There is a need to build economic organisations based on the skills or resources locally available. This needs long-term investment of time and resources along with institutional commitment.” She further asserts, “Institutions like the World Bank need to work with organisations like SEWA in designing projects, funding of activities flows accordingly that enables women’s leadership to grow.

Systemic Limits and Global Ambitions

While several avenues have opened up with the support of government funding for export marketing, the road to cross-border sales is rockier than what meets the eye.

“There are SHGs that have reached a point where they’re selling handcrafted products in international markets. These groups have completed all statutory requirements, found the right channels, and built a global reputation. In that sense, the potential is real and visible,” opines Dr. Bhattacharya.

She notes that policy mechanisms are taking gradual strides to peddle such transitions. “There are schemes and programs not just for SHGs but for India’s artisan communities, particularly tribal groups. For instance, the Tribal Co-operative Marketing Federation of India (TRIFED) organizes marketing events that connect artisans to export markets. Fairs like SARAS have international versions as well, creating opportunities for SHGs to showcase their products abroad.”

However, low levels of federation, quality control issues and market access limitations are some of the pressing challenges before the SHG-led initiatives for Global proliferation.

It is interesting that despite the current ramifications, Dr. Bhattacharya is not ready to take a pessimistic view on the situation as she argues, “Things are evolving. And if a few SHGs can reach this level, then with the right policy push and sustained support, many others can follow.”

To realise its full potential, Ananya Seth in the Harvard International Review asserts, “microfinance must address its operational challenges, ensure that it benefits the most vulnerable communities, and expand its scope to include skill development and business support services.”

Drivers of Change

The success of Self-help groups, however, doesn’t just hinge on loans or financial independence. Nanavaty states, “Our experience has shown that with organizing large numbers of low-income women, a holistic, integrated approach is essential. Giving women a voice through the self-confidence that comes from economic independence is very empowering.”

The true impact is often intangible and indirect. Nanavaty notes that mobilisation of women into formal collectives brings in a sense of solidarity and sisterhood.

Empowering women through Self-Help Groups isn’t only about financial independence. It’s also about building equity within households by reducing intra-household differences in bargaining power and giving women more say in how resources are used.

Hearing the Quiet Revolution

As gender-based stereotypes and exploitative norms are being shown the exit with the help of financial empowerment, a new generation of rural women is emerging—not just as workers, but as leaders and entrepreneurs.

Saroj, for instance, now earns enough to send all her children to quality schools, an outcome that signals real, transformative change. Yet, while these stories are powerful, they are still too few.

The scale of India’s SHG movement is vast, but sustainable, systemic empowerment remains uneven. Many women remain on the margins, and the leap from survival entrepreneurship to scalable enterprise is fraught with structural and market barriers. Platforms like Stories from the Field, a podcast by the
South Asia Gender Innovation Lab, offer a window into this evolving landscape.

Despite all challenges, it is true that women-led SHGs in India have sown a seed of change for the society that stands at the cross-sections of economics and empowerment. While the journey is far longer than where it stands today and the questions of labour force participation and mainstreaming of women-led enterprises still need major inquiry,

India places a firm bet on its women entrepreneurs as one of the key drivers of the rural economy.

Gates Foundation which is closely associated with India’s self-help group initiatives puts it, “As India surges toward its goal of being among the three largest economies in the world, with a
GDP of $5 trillion and more by 2030, the country’s SHGs and its women will continue to be significant contributors to this goal and help themselves and a million others imagine a better future.”