The followings are some of essential characteristics of SHGs:
i. A group of persons of small means.
ii. A group can be registered or unregistered.
iii. Members of the group come together out of their volition. However, sometimes groups are promoted by NGO and banks. In such a case these are called as self help promoting institutions.
iv. The limit of members of the group is restricted in between 10-20.
v. Members contribute a part of their earnings regularly to a common fund.
vi. There is frequent meeting of members to decide on terms and conditions on savings and loans.
vii. Records maintained by the groups are membership register minute book, saving book and loan book.
viii. There is the provision of borrowing from bank and use of borrowing for credit of its members.