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Table 13.1: Why Savings is high or low
High Savings
Low Savings
Interest Income
Lack of awareness
Higher loans from High savings
Lack of recourses
Disciple of savings
Conservative society
No conflict as long as savings is equal
The interest rates that they charged for internal loans were either 24% or 12 %. About
90% of members charged 24% interest. This was mandated by the NGO. Some
progressive groups reduced the interest rate stating that they empathise with members.
However no SHG implemented differential rates to different members. In this sense they
believed in equality no matter what the reason for loan was. They also found that they
did not have any conflicts in deciding to whom the loan should go to. It was decided on
priority basis. We also found that most SHGs allowed for a corpus collection between
Rs. 30,000 to Rs. 40,000 per member. Once this amount was reached they gave the
money collected back to the member and started a new corpus with savings. All in all the
management of savings by the member was rule driven – from the NGO. All matters
from book keeping, interest rates, withdrawal from corpus and managing the savings had
rules and the members followed the same. Conflicts were hence rare and if any was
solved by the NGO.
