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parked in bank accounts do show their financial literacy. Often we do mistake their basic
illiteracy for financial illiteracy. Obviously we are mistaken. Fixed deposits do give the
highest interest with the least risk and hence many members part their extra money there.
This is what we term as “high frequency” savings or savings from seasonal income which
could be used at a time of need. We also find from the data that members do keep large
sums of money both in banks and with chits/friends. This we think is for liquidity. One
of the most important requirements for members is the requirement of money at the right
time. They might be able to predict educational or festival needs periodically, however
might not be able to forecast medical or other emergency contingencies. Hence as much
they would want interest for their money earned they would also require liquidity too.
11.3 Why high or low savings?
We find that some groups start with low savings however increase the same very quickly.
It is also found that some groups do not increase the savings amount and keep it low.
The table 11.1 below gives reasons why savings has been high or low. This has
emanated from the FGDs (Focus Group Discussion) with members.
Table 11.1
Why Savings is high or low
High Savings
Low Savings
Interest Income
Lack of awareness
Higher loans from High savings
Lack of recourses
Discipline of savings
Conservative society
No conflict as long as savings is equal
