1. INTRODUCTION
As per the scheme of micro-financing of NMDFC, an
interest free loan of Rs.2.15 lacs is available to each selected NGO for
the purpose of promotion of self-help groups. Self-help groups are
extremely helpful in allowing NGOs to know a large number of individuals
intimately and relate to them in a variety of ways including facilitating
credit availability. Self-help groups become more important for expanding
the activity of the NGOs in new and virgin areas. They serve as
decentralised centres of administration for NGOs. Such groups become
significant agents for bringing about changes in the lives of members.
2. DEFINITION OF SELF-HELP GROUPS
A homogeneous group will be of 15- 20 eligible beneficiaries each. These
persons may select their own leader and also fix the tenure for such
leadership.
3. SPECIFIC FUNCTIONS TO BE PERFORMED BY SHGs
I. Emphasising that there is a great strength in getting united.
II. Effecting regular saving and credit activity within the group,
which would follow
explanatory sessions on the difference between consumer
credit, production credit and the use of credit for socio-economic
transformation in the lives ofthe members of the SHG.
III. Analysis of the existing formal and non-formal credit system.
IV. Articulation of the groups' requirement in terms of credit,
enhancement of skills required for Income Generation activity.
V. Facilitating easy access to credit and instituting the mechanism for
its effective channelisation.
VI. Teaching importance of regular repayment and using group dynamics for
the same.
VII. Applying viable norms for interest rates, repayment schedules,
gestation period, extension, writing off bad debts and the requirements
for communication with the financing institution.
VIII. Serving as platform for review of the cost benefit of the income
generation activities being undertaken.
IX. Undertaking identification of needs for upgradation of technical
skills in the IG activity undertaken.
X. Any other activity including consideration of social issues impinging
on the lives of the beneficiaries.
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