12

Sa-Dhan Patrika

Volume 6

Issue 2

simple yet effective product was

require any major changes in the

designed.

prevailing system of accounting.

A loan product was designed for the

Savings for its members

members of SHGs who wanted to

purchase grains collectively. The product

Two groups (17 members) of Dharamraj

is offered twice a year before the season

Mahila Sabha (a cluster of 26 SHGs),

of purchase. The other features of the

Bichdi purchased wheat in the month of

product  like  interest  rates,  loan

May 2004. A total of 44 quintals of wheat

repayment period and penalty clauses

at Rs 832 per quintal was purchased

are the same as that of a small loan

amounting to Rs 36,608. The prevailing

product.

local rate was Rs 900 per quintal of

wheat. The net profit made was Rs 2992.

The Process involved

This translates to Rs 176 savings per

member, which is more than six months

The  demand  for  maize/wheat  is

of their savings! Similarly, last year 217

collected from the members of Self Help

quintals of maize were purchased in

Groups (SHGs) two months before the

seven clusters, resulting in a saving of Rs

actual purchase. This is done at the

17,360 for its members.

regular meeting of the SHGs. Demand

from SHGs falling under a cluster is then

Strengthening Clusters as institutions,

totalled at the cluster meeting to obtain

which add value

the total demand. Based on the

demand and the prevailing rate, each

Apart from saving members' money, a

SHG remits the amount to a small

larger impact has been the recognition

committee  formed  involving  the

of the cluster by the SHGs as an institution

members from the concerned SHGs. In

that could contribute to their benefit.

case of shortfall of money within the

HVVS aims to make its entire microfinance

individual SHGs, the fund is transferred

programme sustainable over a period

between SHGs, but within the cluster.

of three years. This product has helped

The committee along with the HVVS staff

them in demonstrating to the SHGs the

contacts nearby markets (most of the

advantages of coming together. It has

time, the people know which village has

also strengthened the microfinance

produced  surplus  grains)  for  the

programme itself, with members seeing

availability and price of the grains. If

"new" benefits of attending meetings

necessary, visits are also made to

and participating in the cluster meetings.

ascertain the quality and bargain.

Based on the success of this initiative,

The committee makes the purchase in

clusters have initiated purchase of other

bulk and offloads the demanded amount

items (sugar, tea, oil) on their own.

of grain in each SHG. The SHG then

Though the benefits from these are yet

distributes the grain as per the demand

to be seen, this simple innovation has

list of the members.

paved the way for an innovative route

HVVS is planning

to sustainability of the microfinance

The total value of the grain purchased is

to evolve the

programme (based on the SHG- cluster

charged to the individual member's

clusters as

model). HVVS is planning to evolve the

account. The member pays back the

"service

clusters as "service providers" for SHGs,

loan as per the terms of agreement with

based on a user-fee model. The services

providers" for

the SHG.

being explored at present are bulk

SHGs, based on a

purchase of consumption goods and

user-fee model

Impact

value addition to the produce of its

members. Though financial services are

The uniqueness of the product is in its

in great demand, HVVS is cautiously

simplicity. It does not require any skill

moving  towards  these  only  after

building of staff, nor orienting the

establishing systems and building the

members on how it will work. It does not

capacity of the leaders to handle

financial transactions.

Subham Singh

Subham Singh, based at Bangalore, is a freelance consultant in the area of

microfinance and livelihoods.

ibtada@sancharnet.in