SHG's and JLG's


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Here is the descriptive information about the Self Help Groups and Joint Liability Groups.

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  • we are a one and half year old NGO working in different govt. development schemes in Almora district of Uttarakhand. We wish to associate our self with NABARD , we approached to NABARD but they denied and reported that NABARD only associate 3 year old NGOs, is it true? and how could we associated with NABARD, how could we form JLGs?
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SHG's and JLG's

  1. 1. SHG’s & JLG’s<br />Group Delivery Models<br />
  2. 2. .<br />10-15 local women.<br />
  3. 3. SHG’s<br />Small regular savings over a few months until there is enough capital in the group to begin lending. <br />Funds may then be lent back to the members or to others in the village for any purpose.<br />Group of micro entrepreneurs having homogenous social and economic backgrounds, voluntarily coming together to save regular small sums of money, mutually agreeing to contribute to a common fund and to meet their emergency needs on the basis of mutual help. <br />
  4. 4. SHG-Bank Linkage Program<br /><ul><li>NGO acts as intermediary in between the bank and the SHG.
  5. 5. NGO helps the SHG members in filling up the forms and other formalities w.r.t. the bank for getting loan from the bank.
  6. 6. NGO generally provides training to the SHG members for 6 months so that they can handle all these things themselves.
  7. 7. After 6 months the SHG members starts working themselves.</li></li></ul><li>Self Help Group (SHG) - Model<br /><ul><li>Affinity group of 10-20 members
  8. 8. Weekly group meetings
  9. 9. Leader elected by group members
  10. 10. Small and regular savings
  11. 11. Group has a savings bank account operated by group representative
  12. 12. Internal lending to members from own savings
  13. 13. External loan to the Group as a whole
  14. 14. Disbursement of loans to members at the discretion of group </li></li></ul><li>Joint Liability Group (JLG) <br /><ul><li>5 member Joint liability Groups
  15. 15. 40 member centres
  16. 16. Weekly group meetings
  17. 17. Established methodology for
  18. 18. Group recognition
  19. 19. Client screening
  20. 20. Loan sanctioning
  21. 21. Collections
  22. 22. Collections enforced through
  23. 23. Joint liability
  24. 24. Peer pressure
  25. 25. One time membership fee</li></li></ul><li>Delivery SystemPartner wise<br /><ul><li>CBMD- JLG model
  26. 26. ASSCOD- SHG model
  27. 27. Roshan Vikas- Cooperative model
  28. 28. Karuna Trust- SHG model
  29. 29. Pragati- SHG model
  30. 30. Hope IRDS(AP)- SHG (JLG)
  31. 31. Pragati- SHG model
  32. 32. Hope Foundation, Kerala- Sangam (JLG)- Each Sangam has 5 groups having 10</li></ul>members each.<br /><ul><li>Gram Utthan- SHG model
  33. 33. BMSKSS- SHG model
  34. 34. GMASS, Karnataka- SHG model
  35. 35. New Life- SHG model
  36. 36. Udyogini- SHG model
  37. 37. SAGRAS- SHG and JLG model</li></li></ul><li>Group Formation ProceduresJoint Liability Group<br />Primarily this can be done in two stages :<br />Introductory Meeting <br />Training Sessions <br />Introductory Meeting- For starting up of formation of group the field staff will move in the specified areas and will conduct introductory meetings in the areas. These meetings are important, as these meetings will create an understanding about the organization in the new areas.   <br /> Then the training session starts.<br />
  38. 38. .<br />1st day training<br />The field staff will meet the potential members at the decided date and time for the first get-together. <br />Introduction about the organization and about its hierarchy. <br />Then decides the time and date for the next meeting.<br />2nd day training<br />At the 2nd get-together field staff will train the members in the aspects of Group and centre structure along with sitting mode and Importance of meetings<br /> 3rd day training<br />At the third get-together the field staff will administer the training on rules and regulations and fee and product details.<br /> 4th day training<br />At the 4th get-together the field staff will conduct House (or) Business unit verification {Random-base}<br /> <br />
  39. 39. .<br />Group Appraisal Test - Interacting with members by asking questions related to:<br /> Member Income sources <br />Member involvement in Income Generative Programs <br />Member qualifications <br />Member role as part of group <br />Group structure <br />Group Leader Role in minimizing risk <br />Centre Structure <br />Centre Leader Role in recovery problems <br />Attendance importance <br />Members’ knowledge about organization and its products & services etc. <br />Rules and regulations of the organization.  <br />
  40. 40. .<br />Group means:<br />Combination of 5 individual Women members who are performing as a unit and passed in the GAT.  If a group is passed in the GAT then only they will be eligible for receiving the loans.  <br />Responsibilities of the group:<br />The group members will elect one group leader (it is purely group choice) <br />Selected Group Members must belong to one area. <br />The members may belong to one area, but may be involved in different activities and trades subject to the condition that they should not involve in illegal & immoral activities or trades. <br />As loan will be given to all the members at a time group will have joint liability regarding loan. All members in the group are liable to each other.<br />All the members should sign as a counter guarantee to all. <br />In case of any members payment is ‘delayed or due’, rest of the group members are liable for that payment. <br />In case of any member drop out from the group voluntarily or by rule, the group should take a new member into the group.<br />
  41. 41. .<br />Center Means:<br />It’s a combination of 3-4 groups. Every week all the groups will meet at a fixed place for MF activities conducted by the Field staff.<br /> Responsibilities of the Centre<br />The centre members will elect center leader (it is purely members choice) <br />They must reside in the same area. <br />The members may belong to one area, but may be involved in different activities and trades<br />As loan will be given to all the members at a time all the members will have joint liability regarding loan. All members of the centre are liable to each other. <br />All the members should sign as a counter guarantee to all. <br />In case of any members payment is ‘delayed or due’, rest of the centre members are liable for that payment. <br />In case of any member drop out from the group voluntarily or by force, the centre can take a new member into the group.<br />
  42. 42. Group formation process SHG’s<br />Group consists of 12-15members only.<br />Steps:<br /><ul><li>Identification of potential areas (magnitude of poverty, size of the village/slum, physical access)
  43. 43. Conducting preliminary survey (ensuring potentiality, financial landscaping)
  44. 44. Conducting general meetings (briefing about the organization and credit policy)
  45. 45. Identification of preliminary group (member selection)</li></ul> - monthly income(individual less than 1500 & family less than 2500)<br /><ul><li>Intensive group orientation (after election of the group members)</li></ul>At the end verification of the group regarding their punctuality, discipline,<br />awareness and understanding about the organization.<br /><ul><li>PRA and PLA </li></li></ul><li>PRA & PLA<br /> Participatory rural appraisal (PRA) is an approach used by non <br /> governmental organizations(NGOs) and other agencies involved in rural development.<br />The approach aims to incorporate the knowledge and opinions of rural people in the planning and management of development projects and programs.<br />Action research or participatory action researchis a significant methodology for intervention, development and change within communities and groups<br />It is mainly for the disaster management.<br /> After PRA and PLA the selected group members are trained on book keeping, accounts and HR related aspects. Then they elect their real leader by proper procedure of election.<br />
  46. 46. .<br />
  47. 47. .<br />Rules for formation of SHG :<br />The number of members should between 10-20 <br />Only one member per family to be covered in the SHG <br />Weekly meeting on a fixed day & time should be made compulsory <br />All the transactions & discussions should be done in the meeting only <br />For the first 3 months emphasis should be on regularly of meeting, 100% participation, regular saving & regular deposit in the bank<br />Between 3-6 months a SHG concept training has to be arranged for all the members <br />Participation of bank officials in the SHG meeting at least once in 3 months is essential for maintaining the quality of SHG <br />
  48. 48. Difference <br />
  49. 49. .<br />Weaknesses of SHG model<br />- Need management skills <br /> - can be hijacked internally or externally<br /> - cash may not be secure, if savings are held within the group<br />Advantage of financing through these groups<br />- An economically poor individual gains strength as a part of a group.<br /> -Reduces transaction cost for both lenders and borrowers.<br />
  50. 50. .<br /> Thank you<br />
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