Role of Self-Help Groups in Promoting Saving Habits Among the Members: A Study with Reference to Self Help Groups Formed by Spandana Trust, Mangalore, Dakshina Kannada District, Karnataka State

Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 103 Role of Self-Help Groups in Promoting Saving Habits Among the Members: A Study with Reference to Self Help Groups Formed by Spandana Trust, Mangalore, Dakshina Kannada District, Karnataka State Dr. Therese Pereira Associate Professor Government First Grade College Kavoor, Mangalore Manuscript ID: JRD -2025(I)-170918 ISSN: 2230-9578 Volume 17 Issue 9(III)| Pp 103-111 Sept. 2025 Submitted: 12 Aug. 2025 Revised: 22 Aug. 2025 Accepted: 20 Sept. 2025 Published: 30 Sept. 2025 Abstract This study explores the crucial role of Self-Help Groups (SHGs) in fostering financial discipline and economic stability among economically underprivileged members. SHGs function as a vital link, allowing members to pool periodic savings into a common corpus and gain access to small loans (microfinance). The research addresses a specific gap in literature by focusing exclusively on the SHGs promoted by the Spandana Charitable Trust, Mangalore. The primary objectives are to analyze the changes in saving habits and income levels of members after joining the SHGs. Furthermore, the study aims to determine if there is a significant difference in saving habits and income levels between SHG members in urban (Mangalore) and rural (Bantwal) areas of the Dakshina Kannada District. The methodology is exploratory, relying on primary data collected via a questionnaire from a sample size of 220 members. The data was analyzed using statistical tools, including the Chi-Square Test. The paper argues that SHGs are effective mechanisms for mobilizing savings, enhancing members' income levels, and promoting women empowerment, given that over 90% of the respondents were female. Keywords: Saving Habits, Microfinance, Income Enhancement, Women Empowerment, Spandana Trust, Rural-Urban Comparison Introduction: Self-Help Groups (SHGs) consist of economically underprivileged people interests who contribute savings periodically to build a corpus fund from which small loans (microfinance) are lent to the members according to their needs. They act as the link between poor people and the formal institutions where the members are able to access banks and other financial institutions for depositing savings and obtaining micro loans (microfinance) for meeting their economic and social needs. Today, in most of the rural areas, the formation of Self-Help Groups has helped the participating families to save a part of their income and to generate income by using the microfinance more effectively for productive purposes and have led to multiplier effects in improving their economic positions. In Dakshina Kannada District, a number of NGOs, Social Development Institutions and Charitable Institutions have formed SHGs under their guidance. In this connection, it is apt to study the role of self-help groups in mobilising the savings and enhancing the income level of their members. 1.1 Review of Literature: Many researchers have analysed this fact. A summary of few research studies relevant to this research paper have been discussed to understand the status and role of microfinance in different parts of the world. Quick Response Code: Website: https://jrdrvb.org/ DOI: 10.5281/zenodo.16885235 Creative Commons (CC BY-NC-SA 4.0) This is an open access journal, and articles are distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Public License, which allows others to remix, tweak, and build upon the work noncommercially, as long as appropriate credit is given and the new creations ae licensed under the idential terms. Address for correspondence: Dr. Therese Pereira, Associate Professor, Government First Grade College Kavoor, Mangalore How to cite this article: T. Pereira. (2025). Role of Self-Help Groups in Promoting Saving Habits Among the Members: A Study with Reference to Self Help Groups Formed by Spandana Trust, Mangalore, Dakshina Kannada District, Karnataka State. Journal of Research & Development, 17(9(III), 103-111 Original Article Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 104 Ramlingam et al (1987) proved that the social status of beneficiaries of Integrated Rural Development Programme (IRDP) had considerably enhanced from lower to higher status. Yunus Mohammad (1998) wrote that money entering a house through a woman brings more profit to the family and they prefer supporting their partner for business development. Hartwig (1999) in his study on the SHGs in Africa reported that SHGs of Africa have increased the family income of the members and thereby ensure food security and children education. Sam Afrane (2002) in his paper reviews that microfinance involvement has achieved major improvements in terms of increased incomes, improved access to facilities, and empowerment of women. Nataraj (2004) in his study identified that the average savings per SHG and average savings per member in case of SHGs promoted by RRB was better compared to NGO sponsored SHGs. Nathalie Holvoet (2004) in her research highlights how microfinance enters the household, and who brings it in and how microfinance impacts schooling and literacy. Chris D. Gingrich (2004), in his paper made a study of savings and credit co-operatives in Nepal to understand the impact of microfinance. Dipankar Datta (2004), in his research article studied the role of micro credit in the eradication of poverty and empowerment of women. Ganesh (2005) reported that in Akola district of Maharashtra all the families with BPL status have raised their status in a short time period. Gangaiah et al (2006) reported that SHGs had positive impact on income generation in the village selected. Mahesha, V. and Akash, S. B. (2011), concluded that in Shimoga District members were able to obtain funds through SHGs and have been successful in empowering the women. From the review of literature, it is clear that, Self Help Groups (SHGs) contribute to higher levels of savings and income, better standards of living, leading to development of economies. Many studies focus on the savings habits and income generation activities of the SHG members in different parts of the world including India. However, the Self Help Groups promoted by Spandana Charitable Trust, Jeppu, Mangalore in Dakshina Kannada District are not studied specifically. Hence, the present study is taken up to fill the research gap and to analyse the role of SHGs promoted by the NGO under study, in promoting saving habits among the members and in enhancing the income levels of their members. 1.2 Objectives of the Study: The study has been undertaken with a few objectives which are listed below: To analyse the changes in the saving habits of the members after joining Self Help Groups. To assess the changes in the income level of the members and their family after join the SHGs. To find out if there is significant difference in the saving habits and income levels of the members of the SHGs between urban and rural area. 1.3 Research Methodology: This study is exploratory in nature and the paper is prepared based on the primary data collected through questionnaire from the members of the self-help groups functioning in two taluks of Dakshina Kannada District, Karnataka State. Random sampling technique was used for the study. However, care has been taken to give equal weightage for both the taluks. The collected data was analysed using simple statistical tools like percentages, mean, standard deviation, Chi Square Test etc. for drawing inferences. 1.4 Scope of the Study: The study is confined to the SHGs promoted by Spandana Charitable Trust, managed by the Society of Sisters of Charity, established with the objectives of upliftment of the marginalised and deprived through the process of empowerment. Since the activities are confined to two taluks only, the data collected covers only Mangalore and Bantwal Taluk. Mangalore is considered as urban area whereas Bantwal is considered to be the rural area for the purpose of analysis. 1.5 Limitations of the Study: As the study is confined to a specific NGO and to only two taluks, the results may not be universally applicable. Moreover, the responses of the members may be biassed. Due to time constraint the study is not comprehensive. 2.0 Analysis of the Data: An analysis of the data is given in following paragraphs: 2.1 Sample size: Table 1 & Fig.1 indicates the sample size covered in urban and non-urban area. Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 105 Table 1: Sample size Area Taluk No. of respondents Percentage Urban Mangalore 112 50.91 Rural Bantwal 108 49.09 Total 220 100.00 Source: Field Survey Fig.1: Sample Size (%) Source: Field Survey Table 1 and Fig.1 show that the total sample size is 220 of which 112 respondents (50.91%) belong to Mangalore (urban) and 108 respondents (49.09%) belong to Bantwal (rural). 2.2 Gender details: Table 2 and Fig.2 gives the information of the gender: For the purpose of comparing urban and rural area, χ2 test is applied and ‘p’ is calculated. Table 2: Gender Gender Area Total χ2 d. f. p Urban Rural Male 12 (10.71%) 09 (8.33%) 21 (9.55%) 0.240 1 0.624 NS Female 100 (89.29%) 99 (91.67%) 199 (90.45%) Total 112 (100%) 108 (100%) 220 (100%) Figures in parenthesis represent percentages to total Source: Field Survey Fig.2: Gender (%) Source: Field Survey 50.91 49.09 Urban Mangalore Rural Bantwal 10.71 89.29 8.33 91.67 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 Male Female Urban Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 106 Table 2 and Fig.2 show that 90.45% of the respondents were female members and the rest 9.55% were male members on the whole. Among the urban population, 89.29% of the members were female members and among the urban population 91.67% were female members, which signifies women empowerment. χ2 test shows that there is no significant difference between urban and rural area with respect to male and female members (p=0.624>0.05). 2.3 Marital status: Table 3 gives the detailed information about the marital status of the members and shows if there is any significant difference between urban and rural area (χ2 test). Table 3: Marital status Marital Status Area Total χ2 d. f. p Urban Rural Married 108 (96.42%) 106 (98.15%) 214 (97.27%) 2.684 1 0.101 NS Unmarried 04 (3.57%) 02 (1.85%) 06 (2.73%) Total 112 (100.0%) 108 (100.0%) 220 (100.0%) Figures in parenthesis represent percentages to total Source: Field Survey As shown in Table 3, overall analysis indicates that 97.27% of the respondents were married. In the urban area, 96.42% were married whereas in the rural area 98.15% were married. Further χ2 test shows that there is no significant difference between urban and rural area with respect to marital status of the members (p=0.101>0.05). 2.4 Type of the family: Table 4 gives a description of the type of the family and explains about difference between the urban and rural area with respect to type of family (χ2 test). Table 4: Family Type Family Type Area Total χ2 d. f. p Urban Rural Joint Family 31 (27.68%) 22 (20.00%) 53 (24.09%) 4.343 1 0.037 Sig. Nuclear Family 81 (72.32%) 86 (80.00%) 167 (75.91%) Total 112 (100.0%) 108 (100.0%) 220 (100.0%) Figures in parenthesis represent percentages to tal Source: Field Survey Fig.3: Family Type (%) Source: Field Survey 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% Urban Rural Total 27.68% 20.00% 24.09% 72.32% 80.00% 75.91% Family Type Nucle ar Famil y Joint Famil y Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 107 Table 4 and Fig.3 indicate that 75.91% of the members belonged to nuclear family. In the urban area, 72.32% were living in nuclear family but in rural area 80% were living in nuclear family. χ2 test shows that nuclear family constitute major portion in rural area and joint families in the urban area. So, there is significant difference between urban and rural area with respect to type of the family (p=0.037<0.05). 2.5 Members in the family: Table 5 and Fig.4 gives the information on number of members in the families: Table 5: Members in family Total members Area Total χ2 d.f. p Urban Rural 1-3 07 (6.25%) 08 (7.40) 15 (7.3%) 2.428 2 0.297 NS 4-6 86 (77.79%) 87 (80.56%) 173 (79.0%) 7 & above 19 (16.96%) 13 (12.04%) 32 (13.7%) Total 112 (100.0%) 108 (100.0%) 220 (100.0%) Figures in parenthesis represent percentages to total. Source: Field Survey Fig.4: Members in Family(%) Source: Field Survey Table 5 and Fig.4 indicates that 79% of the beneficiaries have 4-6 members in their homes. In the urban area, 77.79% of the beneficiaries have 4-6 members whereas in rural area 80.56% of the families have 4-6 members. χ2 test shows that there is no significant difference between urban and rural area in this respect (p=0.297>0.05). 2.6 Monthly expenditure of the family: Table 6 gives the details on monthly expenditure of the family. 0 10 20 30 40 50 60 70 80 90 100 Urban Rural Total 6.25 7.4 7.3 77.79 80.56 79 16.96 12.04 13.7 7 & Above 4 to 6 1 to 3 Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 108 Table 6: Monthly expenditure monthly expenditure of the family Area Total χ2 d.f. p Urban Rural Below 5,000 06 (5.56%) 14 (12.5%) 20 (9.09%) 13.962 6 0.030 Sig. 5,000-6,000 37 (34.25%) 25 (22.32%) 62 (28.18%) 6,000-7,000 18 (16.67%) 21 (18.75%) 39 (17.73%) 7,000-8,000 14 (12.96%) 18 (16.07%) 32 (14.55%) 8,000-9,000 11 (10.19%) 14 (12.5%) 25 (11.36%) 9,000-10,000 14 (12.96%) 15 (13.39%) 29 (13.18%) Above 10,000 08 (7.41%) 05 (4.47%) 13 (5.91%) Total 108 (100.0%) 112 (100.0%) 220 (100.0%) Figures in parenthesis represent percentages to total Source: Field Survey Table 6 shows that, 28.18% of the respondents spend between 5,000-6,000 a month and only 9.09% have expenditure below Rs.5,000 and 5.91% have an expenditure above Rs.10,000. χ2 Test shows that there is significant difference between the urban and rural area with respect to monthly expenditure (p=0.030<0.05) because percentage of members with monthly expenditure of Rs.5,000-6,000 in urban area more than in rural area. Similarly, members with expenditure below Rs.5,000 are less and above Rs.10,000 are more in the urban area than rural area. 2.7 Monthly savings: Table 7 gives the data of monthly savings before and after joining the SHGs. Wilcoxon signed Rank test is applied to verify if there is any significant shift in the savings level. Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 109 Table 7: Monthly savings Source: Field Survey Table 7 shows that before joining the SHG 76.78% of the members in rural area and 78.7% in urban area did not have any monthly savings but after joining the SHG there are no members with NIL savings. After joining the SHG, the percentage of members with a saving upto Rs.1,000 has been increased to 89.29% in rural area and 90.74% in urban which indicates that the members have inculcated the habit of saving after joining the SHG. Wilcoxon Signed Rank test shows that there is a significant shift in the savings after joining the SHG in rural, urban and overall study area. 2.8 Source of contribution to savings: In Table 8 Fishers Exact Test is applied to know whether there is significant difference between urban and rural area with respect to the sources of contribution to savings. Table 8: Source of contribution Source of contribution to savings Area Total Urban Rural Own income from IGA 89 (82.41%) 100 (89.29%) 189 (85.92%) Spouse's income 14 (12.96%) 09 (8.03%) 23 (10.45%) Parent's income 00 (0.0%) 01 (0.89%) 01 (0.45%) Other source (children, other family members) 05 (4.63%) 02 (1.79%) 07 (3.18%) Total 108 (100.0%) 112 (100.0%) 220 (100.0%) Fishers exact test p=0.010, HS Figures in parenthesis represent percentages to total Source: Field Survey Monthly savings Area Change in Monthly Savings Wilcoxon signed rank test Z value p Urban Rural No. of respo ndent % No. of respo ndent % Before Joining SHG Nil 85 78.7% 86 76.78% Urban 12.780 .000 HS Below 1,000 22 20.37% 25 22.32% 1,000-2,000 1 0.93% 1 0.89% 2,000 - 3,000 0 0 0 0 3,000 - 4,000 0 0 0 0 4,000 - 5,000 0 0 0 0 Above 5,000 0 0 0 0 Total 108 100.0 % 112 100.0 % After joining SHG Nil 0 0 0 0 Rural 15.710 .000 HS Below 1,000 98 90.74% 100 89.29% 1,000 - 2,000 08 7.41% 9 8.04% 2,000 - 3,000 0 0 2 1.78% 3,000 - 4,000 2 1.85% 0 0 4,000 - 5,000 0 0 1 0.89% Above 5,000 0 0 0 0 Total 108 100.0 % 112 100.0 % Total 20.250 .000 HS Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 110 Fig.5: Source of contribution Source: Field Survey From table 8 and Fig.5, it is clear that 85.92% of the respondents contribute to the savings of the SHG from their own income and the rest contribute from their parents’/ spouses’ income or other sources. Fishers Exact Test shows that there is significant difference between the urban and rural area with respect to the source from which the savings are contributed by the members (p=0.010<0.05). Though majority of the beneficiaries use their own source of income for saving, the percentage of members contributing from the own source is less in urban area than rural area and the number of people depending on spouses for the contribution to savings is more in urban area than in rural area. 2.9 Change in monthly savings: Table 9 explains the changes in the saving habits of members after joining SHG and shows if there is significant difference between urban and rural area with respect to the same (χ2 test). Hypothesis: H0: There is no positive change in the monthly savings of the members after joining SHGs. H1: There is a positive change in the monthly savings of the members after joining SHGs. Table 9: Change in savings Positive change in monthly savings Area Total χ2 dif. P Urban Rural No 17 (15.74%) 18 (16.07%) 35 (15.91%) 0.000 1 0.984 NS Yes 91 (84.26%) 94 (83.93%) 185 (84.09%) Total 108 (100.0%) 112 (100.0%) 220 (100.0%) Figures in parenthesis represent percentages to total Source: Field Survey As per Table 9, 84.09% of the members have shown positive change in their monthly savings after joining the SHG. Hence there is a positive change in monthly savings both in rural and urban area. Further χ2 test shows that there is no significant difference between urban and rural area with respect to change in the level of monthly savings (p=0.984>0.05). Test of Hypothesis: The hypothesis is tested by applying χ2 test. Table 9 indicates that p>0.05 and hence null hypothesis (H0) is rejected and research hypothesis (H1) that there is a positive change in the monthly savings of the members after joining SHGs is accepted. 3.0 Findings of the Study: Following findings are summarised after the data analysis: 1. Since majority members are females, women empowerment is evident in SHGs. Moreover, due to greater family responsibility after marriage, more married women join SHGs. Further, there is no significant difference between urban and rural area with respect to gender and marital status of the members. 82.41 12.96 0 4.63 89.29 8.03 0.89 1.79 85.92 10.45 0.45 3.18 0 10 20 30 40 50 60 70 80 90 100 Own income from IGA Spouse's income Parent's income Other source Urban Rural Overall Journal of Research and Development Peer Reviewed International, Open Access Journal. ISSN : 2230-9578 | Website: https://jrdrvb.org Volume-17, Issue-9(III) | Sept. - 2025 111 2. Majority of them live in a nuclear family, having total members varying between 4-6, which indicates that the respondents have the major responsibility to take care of the needs of the dependent members in their families. There is a significant difference between urban and rural area with respect to the type of family. 3. Majority of the members have a monthly expenditure ranging between 5,000 and 6,000, which compels the members to save more. 4. Most of the members use own source of income earned through IGAs for contributing to the savings. Members except a few had no monthly savings before joining the SHGs but after joining the SHG most of them could save up to Rs.1,000 in a month. 5. On the whole, the study reveals that there is a positive change in the savings level of the members after joining the SHG. 3.1 Suggestions: The savings prescribed for all the members in the SHG is the same irrespective of their earning capacity and income level. It is advisable to collect the savings from the members according to their earning capacity so that the financially weak members will not be burdened and members with reasonable level of income may be encouraged to save more at each meeting. 3.2 Conclusion: It is evident from the study that overall savings of the members has improved considerably. Thus, Spandana Charitable Trust has been playing an important role in promoting saving habits among the members, through the formation of SHGs, thus, contributes prominently to the financial inclusion policy of the nation. References: 1. Afrane Sam, (2002). Impact assessment of microfinance interventions in Ghana and South Africa: A synthesis of major impacts and lessons. Journal of Microfinance, 4, 37-58 2. Dipankar Datta, (2004). Microcredit in Rural Bangladesh - Is It Reaching the Poorest? Journal of Microfinance, 6(1), 56 3. Dunford Christopher, (2000). In search of sound practices‖ for microfinance. Journal of Microfinance, 2, 6-12 4. Ganesh, K. S, (2005). Brick Maker becomes Brick Kilns Owner. Kurukshethra, 53(10), 47-48Gangaiah, C, Nagaraja, B, & Naidu Vasudevulu, C (2006). Impact of SHGs on Income and Employment. Kurukshetra, 54(5), 18-23 5. Gingrich Chris, D, (2004). Community Based Savings and Credit Cooperatives in Nepal - A Sustainable Means for Microfinance Delivery? Journal of Microfinance, 6(1), 22 6. Hartwig, E, (1999). Women’s organisations and SHGs – a step towards independence. Agriculture Rural Development, 33(2), 10-13 7. Holvoet Nathalie, (2004). Impact of Microfinance Programs on Children's Education: Do the Gender of the Borrower and Delivery Model Matter?. Journal of Microfinance, 6(2), 123 8. Mahesha, V, & Akash, S, B. (2011). Micro Finance to SHGs – A Case Study of Shivamoga. Southern Economist, 3(1), 29-32Nataraj (2004). Group Approach to Empowerment of Rural Women – IFAD Experience in Tamil Nadu State. Working Paper 5, Banker’s Institute of Rural Development, Lucknow 9. Ramalingam, S, Muthiah, M. & Sekar, V. (1987). Socio-economic Impact of IRDP on Weaker Sections. Indian Journal of Extension Education, 23(3 & 4), 65-67 10. Yunus Muhammad, (1998). Poverty Alleviation: Is Economics any Help? Lessons from the Grameen Bank Experience. Journal of International Affairs, 52 (1), 47-65