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12.2.2 Savings in Banks
Members expressed the need for liquidity and flexibility which is just not present in most
large financial institutions. Large financial institutions are basically different in nature as
compared to SHGs or MFIs. SHGs by nature understand a clients profile and lending is
by trust, not collateral. In the same manner if it is essential to offer savings products that
would suit the members. Mandatory savings is just the starting point. Going forward
SHGs needs to offer savings products based on the needs of clients. IVDP does the same
by asking clients to enumerate their life time needs. With dream goals in their diaries
written out, members are encouraged to save for the same. However as per regulation
NGOs are not allowed to offer savings products, hence they advise members to save in
banks. Many members do not choose this option due to inflexibility of banks. Hence it
is time to innovate and offer several savings products with tie-ups with banks.
In 2014 two MFIs, Bandan and IDFC have been granted the status to offer full services to
clients. We are hoping that the MFI Bill which is ending in parliament to be passed will
be enacted. This will enable several SHGs/MFIs to offer thrift/savings products which
are oriented to the sector.
Key Findings
SHG members have the power to save and hence new savings products
should be offered by the SHG as compared to by the bank.
Flexible savings products related to members “dream goals” can be offered.
Members must be sensitized to insurance and pension products. Once they
see benefits accruing to other members they will take the same.
