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from the same is higher than investing in any financial institution. This leads us
to believe that flexible savings products do have an appetite within a great
majority of members.
Conflict? :
In some SHG groups which were initially formed, the savings amount
was very low, even as low as Rs. 10 per week. Hence the amount given as loan
from the savings was about Rs. 1,000. Most groups had 12-15 members. The
turn to get a loan was often long. On probing we found that there was consensus
on who the loan had to be given. Most members understood when there was an
emergency and at times they have even divided the loan among two members.
Most members saw both this saving and internal loan an added bonus to their
loans. They felt that this activity also increased their understanding and trust
among members.
11.3.2: Why low savings?
Lack of awareness:
Many members lack the knowledge that increased savings
can benefit them in the form of loans. We find this particularly rampant in
Karnataka where members save the mandated amount and park their funds in the
bank for a 7% return. They claim that they have not heard of internal loans.
Probably educating them on this will help.
Lack of resources:
Another genuine reason for low savings was lack of
resources. Many members were worried if they can save the increased amount
every week or every month. Hence they kept their mandatory voluntary savings
amount low.
