By Balasiewdor Makri
Ask a rural bank manager which borrowers he trusts most, and many will give an answer that surprises people in cities: groups of village women. Not businessmen with property papers. Not salaried clerks. Women who meet every week, save a little each time, and borrow against each other’s word.
Nearly 95 per cent of loans extended to SHGs in the state are repaid on time, according to figures presented before the Assembly this year. Banks have disbursed approximately ₹755 crore to these groups, with more than 40,800 SHGs regularly servicing their loans. This record reflects not only a strong culture of repayment but also the growing capacity of rural women to manage credit, sustain livelihoods and participate meaningfully in the formal economy.
For a segment of borrowers often underserved by conventional financial institutions, Meghalaya’s SHGs are demonstrating that collective enterprise, when supported by access to credit and institutional linkages, can be both financially viable and economically transformative. Few categories of borrowers in India can match this level of repayment performance, underscoring the potential of women-led collectives as reliable partners in financial inclusion and grassroots economic development.
The mechanism is worth understanding, because it is one of the quiet successes of Indian development. A self-help group of ten to fifteen women pools small savings and lends to its own members first. Over time, a track record builds. Once linked to a bank, the group can borrow without collateral at about seven per cent interest, far below what a moneylender charges. Members keep track of one another’s financial commitments, encourage timely repayments and recognize that an individual’s default can affect the entire group’s access to future credit. Since the benefits of borrowing are shared and future opportunities depend on maintaining a good repayment record, each member has a personal stake in ensuring that others meet their obligations.
In many ways, social trust performs a function that conventional lending systems rely on physical collateral, such as property or a mortgage, to fulfil. Instead of securing loans against individual assets, these groups draw strength from mutual accountability, community ties and the understanding that one member’s financial decisions can have consequences for everyone.
The scale of change here is striking. Membership has grown from around 40,000 women eight years ago to nearly 5.8 lakh today, while bank credit to groups, once below Rs 100 crore, has risen to its current levels. More than 41,000 members have reached what the national mission calls lakhpati status, an annual household income of at least one lakh rupees. The Chief Minister credited the officers and community workers of the State Rural Livelihoods Society for this, which is where credit belongs: the work is done village by village, meeting by meeting.
Let it be the visit of Droupadi Murmu, Honourable President of India to Meghalaya where she interacted with over 20,000 SHG members at Baljek, or subsequent visits by different central ministers, interacting with SHGs of Meghalaya has become a key part of their visit. It shows that our success and growth of the state are well linked and interrelated.
The next stage, however, is enterprise, not only savings. Last week in Tura, vehicles were handed over to groups under the Aajeevika Grameen Express Yojana, which offers subsidized loans for rural transport. It sounds minor. It is not. In villages far from a motorable market, a group owned vehicle can carry produce to town, bring back supplies, and earn fares along the way. It turns the cost that every family bears alone into a business the group runs together.
There is more to do. Urban areas such as Mawlai have lagged behind rural blocks in forming groups, and the model needs adapting for city life. Lakhpati is a milestone, not a destination; many members will need help with marketing, packaging and digital payments to grow further. And success brings its own risk: easy credit can become overborrowing if groups are pushed to take loans they do not need.
Meghalaya’s rural women are moving beyond collective savings to become entrepreneurs, strengthen local industries, and open new markets for the state’s products. What started as small savings-and-credit collectives has now grown into a powerful engine of economic participation and growth.
Rooted in Meghalaya’s matrilineal social fabric, where women play a central role in family and community life, self-help groups (SHGs) are increasingly connecting with formal supply chains, processing and even international retail markets.
But the basic lesson is already clear. When institutions trust poor women with money, they repay the trust. That is worth remembering the next time someone argues that rural people cannot manage finance. Nearly six lakh women in Meghalaya are proving otherwise every week.
(The author is an SHG member and Bank Sakhi, Umsning C&RD Block)
