NABARD - Voluntary Savings in SHGs - page 74

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In Karnataka, more than even Tamil Nadu a high percent of members are unemployed or
housewives. They are part of the SHG group more for social interaction, saving, loans
from savings and the divided interest rate. Hence increasing flexible savings products
will benefit them.
Savings for “dream goals” may it an economic activity on known prospective expenditure
has been encouraged by some NGOs. This allows members to think ahead and save
instead of borrowing at high interest rate. This idea of “dream goal” should be
formalized in all SHGs just like mandatory savings.
Groups are self formed and each group has the capacity to save different amounts. We
find a big difference in the amount saved between groups. We also find that members
seem to save more in Tamil Nadu as compared to Karnataka. However the concept of
mandatory savings has made several groups to think beyond the same. It will be
worthwhile to have groups meet each other once in a way and speak about the innovative
ideas they have implemented like benefits of increased savings, the reduction of interest
rate etc.
Another main reason to save is the division of interest that groups do at the end of a year
or two. They have found that this amount is increasing and useful in purchasing a bulky
commodity. This is another reason to have more savings products as members feel that
they are earning from their saving.
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