NABARD - Voluntary Savings in SHGs - page 81

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savings could lead to inequality among members. We hence need to offer
financial products over and above the voluntary saving product.
Member’s income is not very high; however their family income is relatively
high. This shows that they have the potential to save if needed. However they
feel that there are hardly any products offered by the NGO as a savings product.
In spite of having constraints like time and distance to save beyond the mandated
amount we find that there a majority of members who have availed the LIC
policy, taken to recurring deposit and fixed deposits. This is small amounts saved
over a period of time. Obviously they are in need of a variety of savings products
which makes them save periodically. We also find that a few members saved
very high amounts in fixed deposits and in chits/friends. The former is a reflexion
of their status in terms of wealth. The latter is more to do with liquidity of
money.
The interest rates that they charged for internal loans were either 24% or 12 %.
About 90% of members charged 24% interest as mandated by the NGO.
14.3 What are the policy options?
Joint loan products
We find that the SHG members trust one another but this trust does not
translate into joint business. They help one another in times of need but are
not willing to take risk together in terms of joint business. Group members
were comfortable lending money to each other; however they were not
comfortable in investing in each other’s business. One main reason for the
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