Aspiration Problems for the Indian Rural Poor: Research on Self-Help Groups and Micro-Finance

Our paper explores how poor rural households in India are increasingly accumulating debt through micro-finance initiatives channelled through local selfhelp groups (SHGs). The aim of micro-finance and SHGs is to provide a cheap source of capital for investment in self-sustaining economic practices – typified by the Velugu programme. However, the reality of micro-finance has been more complicated. It has created a class- and caste-related debt-dependency and vulnerability whilst also channelling poor households, and women in particular, into subordinate areas of the economy, which ultimately serve to maintain fundamental inequalities in Indian society. The initiatives may, in addition, be viewed as aspects of broader processes of financialisation.