(i) The idea is to organise the rural poor, in particular women, into small Self Help Groups (SHGs) and pool their savings.

(ii) A typical SHG has 15 to 20 members, who meet and save regularly.

(iii) Saving per member varies from Rs. 25 to Rs. 100 or more, depending on the ability of the people to save.

(iv) Members can take small loans from the group itself to meet their needs.


(v) The group charges interest on these loans, but still less than what the moneylender charges.

(vi) After a year or two, if the group is regular in savings, it becomes eligible for availing loans from the bank.

(vii) Loan is sanctioned in the name of the group and is meant to create self-employment opportunities for the members.

(viii) Most of the important decisions regarding the savings and loan activities are taken by the group members.


(ix) The group decides as regards the loan to be granted-the purpose, amount, interest to be charged and repayment schedule, etc.

(x) Any case of non-repayment of the loan by any one member is followed seriously by other members in the group.