Self Help Group is one of the formal people institution and microfinance institution which enables the poor and marginal families in rural villages and urban slums to mainstream with the formal banking system. SAND has experience in promoting and mainstreaming SHGs. They have promoted the SHGs and inculcating saving practices among the poor women in the working villages.
Further, through the savings practices, the group was viable to provide short term loans to the members through their savings. Money lenders are the major threats to the poor families, since they are readily available at their door steps, they were easily trapped into the loans at higher interest rates for their immediate needs. SHGs are the platform which supports the poor families to get rid of the money lender system and through SHG bank linkages they were able to avail their credit needs at lower interest rates.
Hence, SAND has facilitated bank linkages for the SHGs promoted in the working villages by networking with the nationalized banks available in the nearby villages.
Such a way the promotion of SHGs in the villages were support the poor women in the village towards fulfilling their credit needs for various purposes such as,
- Debt redemption
- Agriculture needs
- Business inputs, etc
Further, the SHGs in each of the villages will be grouped under Cluster structure which will be at panchayat level. The cluster will have representatives from each group will be act as the executive committee and there will be a board of directors will be among all the executive committee
members. The members of all the SHGs will be part of the General Committee. The cluster structure will be help in supporting the SHGs to facilitate financial discipline in terms of loans and repayments. It also supports in terms of problem solving, quality assurance, loan appraisal, member appraisal, etc.