International Research Journal of Education and Technology

In Bihar, Self- Help Group was started in the year 1988 through Holy Cross Sister at Tilhara village of Ichhak block (West Champaran) which was inhabited by Birhor tribe which had mostly the poor people who did not have money for food also. Later on in the same year, SHG was formed by PRADAN in Hazaribagh unit. The early days of SHG model was not very successful but with the efforts of banking and other governmental sector towards providing funds to the SHGs, the model became all the way more dominant in the developing State like Bihar. With the progress and growth of SHG model, few Non- Governmental Organizations also entered the sector for providing benefits under the head of microfinance. In the year 1993, Reserve Bank of India had a meeting in Patna Secretariat on micro- credit and its related subsidy. After the meeting successfully held, banks started giving loans to SHGs without any guarantee for the first time in Bihar. Bank of Maharashtra and Canara bank were first two banks which came up with the guidelines for SHGs for providing them loans. After the year 1993, the pressure was built up on other banks as well and thereafter different nationalized banks started opening accounts and lending loans to the groups in Bihar.

Keywords: SHG, Dominant, Growth, Benefits, Microfinance