The Value of Group Savings and Lending to the Poorest People

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December 21, 2011

This is a guest post from Sudarshan Behera, Field Executive for our Livelihood Pathways for the Poorest project in Gaya, India.

Sugia Devi was a changed woman on November 7, 2011. She had just left the free cataract clinic in Bodhgaya in India’s northern state of Bihar and was grateful for her improved eyesight. She couldn’t wait to thank the people who had made it possible: the members of her adapted self-help group (ASHG).

Sugia Devi and her husband

Sugia Devi and her husband.

The group is part of Livelihood Pathways for the Poorest, a joint project of Grameen Foundation’s Solutions for the Poorest group and BASIX/The Livelihood School that is designed to enhance the skills of the ultra-poor, link them to income-generating activities and build their savings habits.

Sugia lives in Khaneta village with her husband and her son, and his family. When she first heard about the ASHG in August, her husband did not want her to join the program because of mistrust and a lack of understanding about the benefits of participation. She persisted and began attending meetings and saving a small amount each week. Starting with an initial deposit of 10 rupees (about 2 cents), by November she had saved 130 rupees (about $2.40). But it still wasn’t enough to pay her fare to get to the free clinic in Bodhgaya some 30 kilometres (19 miles) away.

That’s when Sugia turned to the members of her ASHG. In addition to providing a safe place to save, the groups also provide its members with quick access to short-term loans. Sugia’s group members approved her loan of 100 rupees, enabling her to cover her transportation costs for her operation.

Today, Sugia’s husband has a better appreciation for the value of the self-help groups, while she knows that her family can rely on the group when they need help. As her husband noted, before the ASHG, the family would have had to borrow from moneylenders who typically don’t lend less than 500 rupees (about $9), at very high interest rates.

Sugia has recovered from her operation, and now Friday – the day her ASHG meets – has a special importance in her life.

Comments

great article , love this blog

Sudarsan......Its a live example of life & livelihoods support to the ultra poor! This reflects the TLS & Grameen Foundations contrbution to involve poorest of the poors to the mainstream. Good works done.......

Sanjib Sarangi,
Indian Grameen Services, ODISHA

What makes me happy reading this blog is that Sudarshan, you have begun to 'see' the work of development as a positive contribution to the thousands of approaches being practiced worldwide. Keep up your dedication and writing. Best luck!

Tabrez

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