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Jnana Prabodhini Suvarna Gokhale. SHGs And financial literacy Experience of Jnana Prabodhini. SHGs of Jnana Prabodhini. Numbers and Work Area First SHG in 1995 in Shivapur, Haveli District: - Pune Blocks :- Haveli, Bhor, Velhe Villages :- Around 40 Clusters :- 15
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Jnana PrabodhiniSuvarna Gokhale SHGs And financial literacy Experience of Jnana Prabodhini
SHGs of Jnana Prabodhini Numbers and Work Area First SHG in 1995 in Shivapur, Haveli District: - Pune Blocks :- Haveli, Bhor, Velhe Villages :- Around 40 Clusters :- 15 SHGs :- 300 Membership:- 5,100 Monthly Savings :- Rs. 6 lacks Monthly Loans :- Around Rs. 16 lacks Yearly Turnover :- Around 2crors
Typical SHG Member A Profile • Married woman of 35+ years of age • Schooling up to 4th standard • No exposure outside house duties • First time visitor of a bank • Scared of paperwork • Can read with difficulty • Functionally illiterate • Accounting literacy is Zero So doesn’t even know how to tally vertical and horizontal rows in Income Expenditure sheet • No exposure of handling money
Impact: Economical • Availability of credit at low interest rates (In comparison to informal credit) • Transparency in transactions, so no cheating • Easy loans without paperwork • They also earn money from the group as they are owners • Skill Development (Counting of notes, Use of calculator) • Development of financial analytical skills (They start evaluating loan applications based on need, cause and repayment capacity) ….
Impact:Economical • Some start micro-businesses and risk their own capital for the business • Introduction to formal financial institutes • Their involvement with Money matters increases …. “It’s also my job, not only dhanyacha”
Where does JP differfrom other NGOs? Krushikanya, Udyogini, Arogya Prabodhika • Setting social norms Til gul- Instead of Haladi kumkum • Pressure of SGSY • Role model of APL groups for quality improvement • Make SHGs From SHGs to SIGs (Special Interest Groups) • self reliant and then withdraw Sanghanidhi and Membership fee
Problems faced by SHG Members in the banks * Transition from Non-formal sector to formal sector Wife of Moneylender is the Moneylender but wife of Branch Manager is not the bank * Bank has no personalised approach. They need everything in writing * Only male officers most of the time * Do not even basic banking information (e.g., Savings a/c and Loan a/c are different) * Need lot of paperwork for everything * Overhead costs in dealing with banks is high (travel, time etc.)
Lessons learned…. BANKERS: • Social network and faith as security • Increased recovery rate • Best platform to increase no. of beneficiaries • Preliminary scrutiny of repayment is taken care of • Scrutiny of viability of loan is also taken care of
Lessons learned…. GOVT.: • New platform for poverty eradication Increased Outreach MEMBERs: • Inculcation of saving habit • Alternative to savings in Post Office • Easy access to Loan based on Savings
Some Suggestions About Linkage • 50 % of the members within an SHG should have availed of loan internally • Ratio for loan lending must be related to rotation, not with savings • Group Life Insurance as a prerequisite as no SHG loan is secured • Bank Loan lending must be in front of members who don’t want loan.
Vittiya Saksharata Abhiyanwith CAB Initial impressions about banks • I will be named as guaranteer without my knowledge (Now they know it is not so) • There is only saving account and FD (Came to know about Savings products of bank) • Not comfortable with banks • Bank transactions are open for all, There is no privacy in keeping money there (Banks’ transactions are private. Other people don’t know about your transactions) • Bank Manager is the final authority and inflexible
Vittiya Saksharata Abhiyan Post Survey impressions • Now they think that the bank has come to their village • Awareness of education loan • Those who were just above the subsistence level benefited the most • Importance of signature understood by all • Initially they associated ‘bank’ with loan only. Now they associate bank with ‘Savings Account’ too.
Vittiya Saksharata Abhiyan Lessons learned and Suggestions • You can have a program without any politics and politicians • Ladies staff required in every ‘Rural’ bank • A bank counter in village, -even once a week for an hour- will be very useful • Group Home Loan scheme needed