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MICROFINANCE
Partnership Over Poverty

Self Help Group membership can range from five to fifteen women. And while ages, religion, education level and other aspects may differ, the common thread that binds the group together is extreme poverty and a desire for transformation.

Self Help Group members are most often neighbours and have pre-existing bonds of friendship, a factor critical to the success of the group given the level of trust required among the members. The women meet at least once a month to deposit their savings, receive loans, repay loans, and discuss topics of common interest.

At first glance, it would appear that women join or form a Self Help Group to pool their resources and gain access to credit. And while this is part of the story, it’s definitely not the entire story. Women, especially those marginalized by extreme poverty, join together to pool their knowledge, share their experiences, learn from each other, provide support, and build up their confidence and capacity to take charge of their lives in an incredibly challenging environment. Something as simple as learning to sign your own name can have a transforming impact for someone who has spent their entire life on the margins of society. Evidence of the life-changing impact of Self Help Groups is found in the fact that communities often turn to the groups as a source of knowledge and support.

For nine months after a Self Help Group is formed, members participate in monthly training sessions about money management, small business planning, communication, conflict resolution, and setting goals, among other things. Six months after a group has begun saving they become eligible for a loan from HOPE International Development Agency. The first loan is $50 per person in the group, though the group is free to distribute this money in whatever way they decide. Subsequent loans are given when the previous loans are paid off and increase in size from $50 per person to $100 per person, and eventually up to $500 per person. Loans are repaid according to different methods at an interest rate of 2.5% per month. Two percent of this is repaid to HOPE in order to be re-loaned to other groups and 0.5% stays in the group in order to help build their common funds.