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What Is the Difference Between SHG and NGO?

Self-help groups and non-governmental organisations are distinct yet so similar. In this article we will be elucidating on the pivotal differences between the two types of organizations.

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In every system and society, there are flaws that may be seen. Both of these organisations are dedicated to bridging those gaps and making society a better place. SHG and NGO are leading organisations that stand up for the rights of people. While NGOs carry out their functions on a large level, SHGs undertake social work on a small level


In our society, certain social and economic issues are very prevalent. Malnutrition, women’s safety, poverty, and the development of backward tribes and castes are all major concerns. NGOs work tirelessly at the state and national levels to address these and other pressing concerns. SHGs identify a problem that exists in a small group of disadvantaged individuals and provides the appropriate aid and assistance to that specific group. However, both  NGOs and SHGs seek to improve healthcare, sanitation, living conditions, and education prospects.

Organisational Structures

NGOs refer to non-governmental organisations whereas SHGs refer to self-help groups. The volunteering team in an NGO is more organised as it is registered legally as a society, trust or a Section 8 company. However, SHGs aren’t as organised as they are not governed by any specific act of India. Their formation is based on the principle under Article 19 (1) of the Indian Constitution which states that citizens are at liberty to form any group or association with mutual consent.

Though NGO and SHG are similar in actions they are different in structure and mechanism of function. Non-governmental organisations operate on a large scale to help a large population with their ideas and actions. 

On the other hand within its association, self-help groups have only about 20 to 30 members. They work to advance a small segment of society, often in underdeveloped or rural areas. They are founded on the premise of providing mutual aid and financial assistance to one another inside a group. A majority of SHGs are created by women for the benefit of other women in their committees.


Medium of Funding

Both the self-help groups and non-governmental organisations are self-reliant in the arena of finances and funding. The source of funding in SHGs is its members only which deposits a particular amount of money in their committee’s fund. 

NGOs on the other hand are funded by volunteering individuals and corporations. Eminent NGOs also receive funds from foreign countries. These funds are regulated by the Foreign Exchange Management Act, 1999 to maintain accuracy and transparency.


The powers of NGOs and SHG is limited. The difference between NGO and SHG is that an NGO is more powerful as compared to an SHG. The pivotal reason which allocates more power to a non-governmental organisation is its recognition level. As the expanse of work is executed on large levels in an NGO. They also operate welfare activities generally within a group of states or throughout the entire nation. This makes their work more prominent in the eyes of people as well as the government. This is exactly why they are awarded more applause and distinction as compared to self-help groups.  

Tier of Work

The area of governance is quite small in a self-help group and their work criteria are also limited. Their motive is to aid a small area of people who are facing problems, especially in the poorer sections of society. 

Let’s understand the work of an NGO and an SHG with the help of examples. 

An NGO works on bigger scales for the good of the population. CRY is an eminent NGO that works to eliminate the suffering of children in India. The expanse of this NGO successfully covers numerous Indian states. It works at a very large scale and helps underprivileged children combat major problems such as lack of education and scarcity of food. They strive to offer poor children with primary and secondary education. This group also makes a concerted effort to keep disadvantaged children out of the trap of child labour and malnutrition. Food is provided to underprivileged children through an Anganwadi network. As a result, there are two advantages to this movement. It encourages and strengthens the scale of labour for Anganwadi ladies while also assisting disadvantaged children.

SHG only functions inside a narrow spectrum and, in most cases, within their own association itself. SHGs are more often than not formed by a group of women. They assist one another financially by collecting money from one another or earning money with each other. All in all, SHGs are small and limited organisations, yet their work is done with utmost discipline and determination.


We have now seen the differences between NGOs and SHGs. These differences help us to attain a better understanding of these major subclasses of social welfare organisations. There might exist several structural and functional differences between NGOs and SHGs but their motive coincides. They both help people revive and combat social crises in an effective way. Without seeking any administrative help from the governmental bodies, they thrive to work for a better society.  

If you’re interested in working towards a better tomorrow, get in touch with our experts for help registering an NGO.


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