A Self-Help Group (SHG) is a small voluntary, informal association of people, preferably from the same socio-economic background. They come together to inculcate a habit of savings among their members through self-help and mutual help. The SHG promotes small savings among its members. The savings are kept with a bank.
In terms of banking, an SHG comprises of 10-20 members who are brought together normally by NGOs, and are encouraged to take up livelihood activities like tailoring, handicrafts, fabric making from e-charkhas etc., The members save individually and these savings can be lent to any of the members in time of their need. Some banks also lend to SHGs.
As per regulations, SHGs are allowed to open Savings Accounts