SHG-Bank Linkages in Uttar Pradesh: Pathways to Women Empowerment through Micro-finance

Abstract

This study examines the performance of Self-Help Groups (SHGs), particularly women-exclusive SHGs, in Uttar Pradesh, focusing on their financial inclusion and empowerment role. Employing cluster analysis, benchmarking, and proportional analysis, the research evaluates disparities in the performance of public, private, regional rural, and cooperative banks across metrics such as savings mobilization, loans disbursed, and loans outstanding from 2007 to 2023. Findings reveal that public sector banks consistently outperform, driving the majority of SHG-linked activities and demonstrating their institutional commitment to rural financial inclusion. In contrast, private and cooperative banks lag significantly, indicating underutilized potential in fostering SHG participation. Women-exclusive SHGs emerge as the dominant contributors, accounting for a substantial share of savings and credit activities, underscoring their pivotal role in rural development and household financial stability. However, disparities in engagement across bank types highlight the need for targeted policy interventions to enhance the involvement of underperforming institutions. The study concludes with recommendations for strengthening capacity-building initiatives, promoting gender-sensitive financial policies, and incentivizing private sector participation to create a more equitable SHG ecosystem. While the findings provide actionable insights for policymakers, the study acknowledges limitations such as the reliance on secondary data and the geographic scope limited to Uttar Pradesh, suggesting directions for future research to explore qualitative perspectives and broader regional analyses.