PM Modi's vow to create 3 crore ‘lakhpati didis’ led by women’s self-help groups

SHGs role in lakhpati didi mission: Riding high on India’s enhanced bank linkages and digital framework, better connectivity between rural parts of the country with the urban centres, as many as 8.5 million Self Help Groups (SHGs) across India with over 9.21 crore members are seeing growth of ‘lakhpati didi’ initiative of the central government to create three crore empowered women under this mission across the country. 

As per a report issued by the public sector lender State Bank of India (SBI), female SHG members' income has seen a three-fold increase beginning between March 2019 and December 24. Besides, the bank linkages of SHGs, as per the SBI report, is proving to be a game-changer as 97.5 per cent of the SHGs are in the possession of a bank account. 

“As many as 82.05 lakh out of the 84.93 lakh SHGs are a part of the robust bank relationship, of SHGs as a group and its individual members, inter alia, has enabled credit onboarding and saturation,” reads the report.  The report has attributed the growth in financial activities and robust financial inclusion of SHGs to COVID-19, a period that saw ample opportunities for SHG activities to scale up exponentially, the report added.  

“Credit linkage, digital access, and targeted policy measures, coupled with an unwavering sense of entrepreneurial spirit have ensured female SHG members' accounts witnessed income tripling during FY19-FY24 (credits in accounts), with urban female members showing 4.6X increase while age group over 27 years harnessing income increase of 4.7 times, a testimony to young nation theory,” reads the report.  

“Most of the female SHG members belong to the age of 35 to 50 years with a median age of 43 years,” the report further said.   

SHGs contribution to economy

India’s SHG movement is driven by ‘of the women, by the women but for the nation’ mantra helping in computing women’s share in contribution to Gross Value Added (GVA) / economic output, says the SBI report. 

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As per the report with the help of a formalisation drive that captures the increasing share of women in the formal sector as evidenced by the increasing female Labour Force Participation Rate (LFPR), the ‘lakhpati didis’ are truly the mascot of a new Bharat. 

“The linkage of SHGs with banks has seen 97.5 per cent  of the SHGs at present having a bank account. 82.05 lakh out of 84.93 lakh SHGs are in possession of a bank account,” said the report. 

Connectivity, mobility boost 

The government’s focus on boosting road infrastructure through interconnected loops of village roads with state and national highways has eased access of the rural population to India’s urban markets. As much as 7.50 lakh km road stretch built under Pradhan Mantri Gram Sadak Yojana has seen the National Highway now extend by 1.50 lakh km, says the report.  

“The inter-district upward mobility of expenditure is showing an exponential growth,” the report has said, further adding that, ‘lakhpati didis’ can now traverse long distances for sale and purchase of goods. “This is horizontal integration of rural and urban,” the report has said.  

Digital spending patterns 

In terms of Point of Sale (POS) transactions, 72.7 per cent  of rural SHG make these payments in metro regions, essentially outside their districts. “The rural SHG members also spend considerably well in semi-urban and urban regions. 30.5 per cent of rural ATM transactions are in urban and metro regions and outside their districts,” the report says. 

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A better road infrastructure connecting rural India to urban centres also ensures that spending patterns of the urban population take places outside their districts, with 4.5 per cent of POS spend of urban areas are taking place in rural and semi urban, the report has added. 
“The average limit sanctioned to SHGs has increased by 2.2 times in FY24 when compared to FY19. Limit has been judiciously utilised by SHGs with credit demand increasing but average limit utilization so far staying below 80% indicating hygiene in credit utilisation,” says the report adding that the credit availed is also being repaid judiciously and in time, with average credit repayment increasing by 3.9 times in FY24 over FY19.

State-wise performance 

While Andhra Pradesh and Telangana are leaders in SHGs, other states like Tamil Nadu, Uttarakhand, Kerala, Punjab, Gujarat have also significantly increased female SHG incomes in recent times, says the report. 

“The female SHG members of Haryana, Madhya Pradesh, West Bengal, and Jharkhand are expected to cross annual income of Rs 1 lakh in one year,” the report further says, adding that SHG members of UP, Maharashtra, Chhattisgarh, and Rajasthan may take two more years to earn annual income of Rs 1 lakh by FY27, India will have millions of ‘lakhpati didis’ in almost every state, says the SBI report.  

UPI trends & SHGs 

Pointing out the trends witnessed in the withdrawals of SHG members at ATM kiosks, the report said expenditure at ATMs has been nearly constant during FY19-23 for SHG members, while the average SHG members spending at POS has increased by 1.7 times during FY20-FY23, and highest spending is observed in urban and metro regions.
“When it comes to UPI, share of Person to Merchant (P2M) transactions in UPI transactions by SHG members has nearly doubled in four years, across four regions in the country signifying ease of digital payments for merchant payments permeating physical boundaries, says the report.  The expenditure through the Aadhar Enabled system has increased by at least three times in FY24 from FY23 in all regions, the SBI report on SHGs and emergence of ‘lakhpati didis’ has added.