(i) Problem of Raw materials.
(ii) Problem of Finance.
(iii) Problem in Marketing.
(iv) Problems of under-utilisation of capacity.
(v) Other Problems-in adequate availability of credit facility, deficient managerial and technical skills.

SHGs in Tamil Nadu:
In Tamil Nadu, Tamil Nadu Corporation for Development of Women Limited (TNCDW) was established in the year 1983 with the prime objective of socio-economic development and empowerment of rural women. The Government of TamilNadu spearheaded the Self Help Group concept in the country by forming SHGs in Dharmapuri district with the assistance of International Fund for Agricultural Development (IFAD) in September 1989. The success of the IFAD project paved way for the now popularly called "Mahalir Thittam" project, which was launched during 1997-98 with the State Government funding and was progressively extended to all the 30 districts. The SHG movement has now emerged as a powerful and vibrant movement illuminating the lives of many poor women in the state.

Institutional sources of finance for MSMEs:
There are many Banks and Financial institutions which provide financial assistance to Micro Small and Medium Enterprises and start-ups.
(a) Commercial Banks:
(i) Public sector banks (eg.) State Bank of India, Indian Bank, Indian Overseas Bank, Canara Bank.
(ii) Private sector banks (eg.) ICICI, Axis Bank, City Union Bank, HDFC, Karur Vysya Bank, Tamilnadu Mercantile Bank.
(b) Regional Rural bank:
(eg.) Pandian Rural bank, Pallavan Rural Bank, Vallalar Rural Bank.
(c) Co-operative Banks:
(eg.) TNSC Bank, District Central Co-operative Banks.
(d) Micro Finance Institutions:
(eg.) MUDRABank.
(e) Non-Banking Finance Institutions:
(i) (eg.) National Small Industries Corporation Ltd (NSIC).
(ii) Small Industries Development Bank of India (SIDBI).

In December 2017 there were 45,67,090 SHGs in India. The total number of members in SHGs during the same period stood at 5,02,65,933. at all India level. The five year plans of the government of India has given due recognition to the relevance of the Self-help group concept to implement developmental schemes at the grassroots level.

(i) There are three distinct modes of credit to SHGs.
(ii) Under the first mode, banks lend directly to the SHGs.
(iii) In the second mode, banks provide loans to NGOs for lending to the SHGs and ultimately to Micro Entrepreneurs.
(iv) Under the third mode, banks extend Credit to SHGs with the NGOs serving as facilitators.
(v) Out of these three modes, the last method of direct lending by bank with NGOs facilitations is widely practised.

(i) The motto of every group members should be "save first" - Credit Later"
(ii) Self help group is homogeneous in terms of Economic Status.
(iii) The ideal size of a self help group ranges between 10 to 20 members.

The MSME sector contributes about 8% to Gross Domestic Product (GDP) besides 45% to the total manufacturing output and 40% to the exports from the country on the production of more than 6000 products. This sector consists of 36 million units and provides employment to over 8 crore people.

In Tamil Nadu MSMEs sector produces a wide variety of products in almost all fields. The prominent among them are textiles, Electronic Products, Engineering products, Auto ancillaries, Leather products, Chemicals, Plastics, Garments, Jewellery, etc.

Enterprise	Manufacturing Sector	Service Sector
A medium enterprise	More than 5 Crores but not exceeding Rs.10 crores	More than Rs.2 crores but not exceeding Rs.5 crores

Functions of Self Help Groups:
(i) Developing and enhancing the decision-making capacity of members.
(ii) Increasing general awareness on literacy among members.
(iii) Equipping the poor with basic skills for understanding monetary transactions.
(iv) Maintaining books and registers to ensure Proper Accounts.
(v) Submitting the Accounts for Annual Audit by a Qualified Auditor.
(vi) Providing necessary training in the chosen field.
(vii) Deciding the loan amount to be sanctioned to the group members.