Role of financial institutions in promoting Self Help Groups and Women empowerment
Author(s):
Dr. Mangalamma. K. M.
Keywords:
Group, Savings and thrift, Capital formation, Women empowerment, Finance.
Abstract
Self Help Group is a small, homogenous affinity group of rural poor, comprising of not more than 20 members each. These groups represent and foster true democratic culture, wherein all members of the group take active part in decision making. The membership is open, voluntary and group is primarily formed to practice voluntary savings and thrift on a regular basis. Members save on a regular basis and contribute to the ‘Group Common Fund (GCF)’. The fund includes not only the savings of the members but also grants from Non-governmental organizations (NGO’s), or promoter, fine imposed on members for various irregularities, government aid for various programmes, service charges on external loan (inter SHG lending and borrowings) etc., All common expenses related to the group will be met from this ‘Group Common Fund’. All savings and surplus of the fund would be rotated as short term loans amongst members at a rate of interest, decided by the group and loan is given to the needy members on a priority basis. “Savings first-credit later”, is the motto of every group and its members. For about six months in the beginning, the group collects the thrift and savings and no loan is given to any member. This tests the patience and tries to instill mutual trust amongst the members. During this period the groups are expected to open a savings bank account with a bank or financial institution which would like to extend loan or credit at later stage. In turn RBI has directed all banks to allow Self Help Groups, both registered or unregistered, to open savings bank account with them. These financial institutions play a vital role in enhancing the savings habits of the self help groups members and contribute immensely in achieving women empowerment. This paper analyses, the role of such financial institution.
Article Details
Unique Paper ID: 150256

Publication Volume & Issue: Volume 6, Issue 7

Page(s): 6 - 10
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