ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Mahendra Varman PSubscribe to Mahendra Varman P

Impact of Self-Help Groups on Formal Banking Habits

Deposits are foundations upon which banks thrive and grow. The twin objectives of a commercial bank, i e, acquiring deposits and advancing credit cannot be attained without good banking habits of the people. Therefore, people's banking habits seem to be a major factor that affects sustainability of the banks concerned. In microfinancing in India, self-help groups (SHGs), which recently came into existence as informal organisations, are linked to banks and its members are mainly women. This paper makes a modest attempt to examine whether there is any association between the growth of SHGs and the increase in female bank deposit accounts and whether SHGs have a tendency to influence account holding in formal banks. In the process, the paper tries to trace the socio-economic factors that determine deposit and credit account holdings (banking habits) in formal banks, among individuals and households.
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