Sunday, 22 September 2019

Self Help Group-2 , Banking Fundamentals to Know for Students.

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                                       Self-Help Group (SHG) is a small voluntary association of poor people, preferably from the same socio-economic background. They come together for the purpose of solving their common problems through self-help and mutual help. The SHG promotes small savings among its members. The savings are kept with a bank. This common fund is in the name of the SHG. SHG is a group formed by the community, which has a specific number of members like 15 or 20. Usually, the number of members in one SHG does not exceed twenty. In such a group the poorest would come together for emergency, disaster, social reasons, economic support to each other have ease of conversation, social interaction, and economic interactions.

                                                   The SHGs comprise very poor people who do not have access to formal financial institutions. They act as the forum for the members to provide space and support to each other. It also enables the members to learn to cooperate and work in a group environment. The SHGs provide savings mechanism, which suits the needs of the members. It also provides a cost-effective delivery mechanism for a small credit to its members. The SHGs significantly contribute to the empowerment of the poor.
  • To sensitize people of the target area for the need of SHG and its relevance in their empowerment process.
  • To create group feeling among members.
  • To enhance the confidence and capabilities of members.
  • To develop collective decision making among members.
  • To encourage the habit of saving among members and facilitate the accumulation of their own capital resource base.
  • To motivate members taking up social responsibilities particularly related to development.
                                                      Non Governmental Organisations (NGOs) Social Workers, health workers, village level workers, etc Informal Associations of local people Development oriented government departments Banks Bank personnel and other individuals (in their personal capacities) Farmers' Clubs under the Vikas Volunteer Vahini ( VVV) Programme of NABARD Other development institutions

                                                                The SHG-bank linkage program is targeted to reach the poorest sections, which are bypassed by the formal banking system. Therefore, it is essential that only the very poor be considered as the target group for the SHG -bank linkage program.

                                                                An SHG can be an all-women group, all-men group, or even a mixed Group. However, it has been the experience that women's groups perform better in all the important activities of SHGs. Mixed group is not preferred in many of the places, due to the presence of conflicting interests.

                                                                  Training can contribute significantly to the success of the SHG bank linkage program. Appropriate training (formal or informal) at each stage of SHGs' growth is one of the essential inputs required.

                                                     Training is essential for all partner agencies who participate in the SHG bank linking program. The details regarding the different types of training needs, organizational facilities, modules, etc are presented in Section 4 - Capacity Building of Partner Institutions in microFinance.

                                                                 As far as possible, the membership of an SHG may comprise people from the comparable socio-economic background. Though difficult to define in clear terms, a major indicator of homogeneity in membership is the absence of conflicting interests among members.

There should not be any discrimination among members based on caste, religion or political affiliations.

Ideally, the group size may be between 15 and 20, so that the members are participative in all activities of the SHG. In a smaller group, members get the opportunity to speak openly and freely. However, the membership may not be too small that its financial transactions turn out to be insignificant.

Total participation in regular group meetings lends strength to the effectiveness of SHGs. To achieve this, the SHGs should place a strong emphasis on regular attendance in the group meetings.

It is important that all financial and non-financial transactions are transparent in an SHG. This promotes trust, mutual faith, and confidence among its members. Maintenance of books of accounts as also other records like the minute's book, attendance register, etc., are important.

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