Self-Help Groups as Grassroots Governance Institutions: Pathways to Sustainable Livelihoods and Decent Work in Rural India

Abstract Informal economies dominate rural areas across developing countries, where jobs lack stability and access to formal labour markets remains limited. In India, Self-Help Groups (SHG) foster collective savings and enable women’s participation in livelihood activities. While widely studied as microfinance institutions, less attention has been paid to their role in improving employment quality and local economic resilience. Recent development debates highlight Environmental, Social, and Governance (ESG) principles as markers of sustainable economic practice. However, these discussions largely focus on corporate organisations, overlooking community-based rural institutions. This paper connects research on SHGs in rural enterprise with ESG-oriented development frameworks. Drawing on qualitative interviews with women-led SHGs and institutional analysis in rural Odisha, India, the study develops a conceptual framework linking SHG governance practices to ESG dimensions and improved rural livelihood outcomes. These groups evolve from microfinance collectives into social institutions where women challenge traditional roles and transition toward more stable livelihoods. Integrating SHGs into ESG discussions shifts attention from corporate actors to grassroots institutions supporting inclusive rural economic transformation. The findings have implications for policymakers and development practitioners designing inclusive sustainability strategies.