5. How to organize a Self-Help Group

Based on years of working with self-help groups, the following conceptual phases in the group building process have been evolved. These phases are typical of the SHGs that we are talking about. While explaining each phase, a time frame for each phase has been mentioned. This time frame is an approximate estimation based on experience. Variations to this estimation are possible depending on the specific context. The time frame is mentioned in a progressive manner.

5a - Phase I: Preparatory phase (Month 4- 6)

In the preparatory phase, the development worker or CBR staff visits the community frequently and holds informal discussions to understand the community as well as to develop rapport with it. S/he meets people in their families, in their fields, and in other situations. This gives him/her a good insight and understanding into the general life and copping mechanisms of the people.

Through informal discussions the CBR staff motivates the people to work together for their development and introduces the concept of SHGs as an option. S/he allows the ideas to sink in and let people act upon it. Those who show interest and want to come together are asked to meet a few times and try to understand the concept. The CBR staff facilitates these sessions and provides any clarity the people want about the concept of SHG.

CBR staff to document general information with regard to the community needs also uses this technique. This will come in handy as baseline information, which can be used for latter comparison and analysis. The CBR staff may also conduct a wealth ranking exercise to understand the relative economic status of all the families. The staff to get his/her meeting with the most disadvantaged families may use this method.

At the end of these series of phases, depending on the interest of the persons who came together for the meeting, a group or more groups may be formed. This phase may last for four to six months. However, it requires much less time to introduce concept, if it is already familiar in the area.

5b - Phase II. Initial phase of group formation (Month 4- 6)

In the second phase membership is regularized, those who lose interest after the clarification on the group process, may leave at this stage. (It is natural for any people to joint the group in the initial stage, hoping to get some material benefits). Those who stay back formulate certain rules and regulations for smooth function of the group. They name their group, select three office bearers, decide and allocate responsibilities, make rules on meetings, and savings. Subsequently they start regular meetings and savings as per the rules. Relevant document such as minute's book, saving books, cash books and individual passbooks are introduced at this stage.

This stage may last for four to six months, at the end of which there are regular meetings taking place, a group common fund is established, office bearers elected, basic rule of functioning formulated and documentation has been introduced.

5c - Phase III. Group stabilization (lending own fund) (10 - 15 months)

In the third phase, the group may decide to lend its money to members. The CBR worker facilitates discussion on setting up rules and regulations on lending by asking relevant questions. Sometimes this can also be facilitated as a formal training session where the group is made to reflect on certain issues, which help them in formulating their rules. Later on, the group may hold a separate meeting, where, based on the training inputs, it may formulate specific rules and regulations to regulate its credit activities. It should be noted that since the group is working in a hypothetical situation, many rules might be formed as the group starts lending and as when it comes across certain problems.

The CBR worker however, based on their experiences with other groups, would be able to give the group some suggestions in this regard. Care must be taken however, to see that the groups are not unduly influenced by the staff. Further, if the group is reluctant to agree on certain suggestions made by the staff, which may be very obvious to the staff, the staff should allow the group decision to prevail, because the group eventually is likely to learn such things by itself. The staff should always remember that they are facilitators and not decision-makers. Once the rules and regulations for lending have been formulated, the group starts lending based on them.

The CBR worker facilitates the group meetings and make sure that the group uses its terms on all occasions. S/he ensures that the group discusses all the proposals for borrowing from members objectively and considers each application on its merit. If there are any differences of option with regard to lending, the CBR worker facilitates such differences and makes the group arrived at a consensus.

Once loans are given it is also the responsibility of the group to see if the members have actually used the loan for the stated purpose.
This may not be possible in all cases. However, the staff should encourage the group to evolve a system of physical verification of the loan utilization. This is only to ensure that the members are not put into undue hardship while repaying the loan amount if the money has been used in the right way.

This phase may last for at least six month period to even twelve months. During this phase the groups acquire valuable skills in loan management, group funding management, bookkeeping and facilitation and decision-making. It has established terms and conditions for lending activities. The group would have started lending activities with its own fund. The members, on their part would have understood the procedures of borrowing and repaying loans, apart from loan utilization.

5d - Phase IV. Group consultation (36 - 48 months)

In the fourth phase, the agency assists the group with working capital assistance. It monitors the performance of the group in the third phase with reference to their processes of decision-making in lending, the loan utilities of the members, and the repayment patterns. Based on these factors, and also on the overall performance of the groups, the agency decides to assist the group with a working capital. The assistance is in the form of an interest-free loan, to be repaid by the group to the agency over a mutually agreed repayment schedule. This form of assistance strengthens the decision making of the groups and their managerial capacity, apart from increasing their common fund, through accrued interests. The CBR worker is equity and social justice in the decision made by the group.

Intensive training of the group is conducted in this stage, as this is also the stage of the consolidation. Training of SHGs takes place basically in all stages, which may vary in content and intensity. In this stage a package of training sessions may be planned and implemented. This package should take into account, the training needs expressed by the group members.

This phase may last for two to three years. During this phase the other inputs of the agency mainly; capital and intensity are given intensively. Facilitation of group meetings by staff starts reducing in this phase, and by the end of this phase, staff attends meetings only occasionally. The group is able to borrow capital from the agency and repay in installments. Within the group it learns how to use the capital to lend to members. The group funding experiences an increase due to the interest accruing from the capital assistance. Members are able to get larger loans and can plan bigger enterprises.

The agency may also have to provide some assistance in the form of skill training on marketing, entrepreneurship and any other Income Generation Activities skills, requested by the group. Alternatively, the group may be linked to some other agencies in order to provide such assistance.

5e - Phase V. Withdrawal phase (36 - 60 months)

The last phase is the withdrawal phase. In this phase the outside agency gradually withdraws its active present in the group. In the other words, the agency trains the group to independently handle all activities. Thus this phase may be basically listing all activities of the group, which they should handle independently. Thus in reality, phasing out starts much earlier than suggested. As part of this phase, the agency needs to evolve certain support structures, which can continue to serve the SHGs once the agency phase out of the groups. Such a support structure, the agency can think of setting up federation/s of SHGs.

These federation/s have the potential to carry out a wide range of activities. The minimum a federation can do is to provide some kind of moral support to the group when the Cambodian Vision in Development agency withdraws, so that the groups do not feel sense of isolation. Further, such networking may add to the strength of the SHGs, which are made aware that they are not working in a vacuum, isolated from each other. The fact that all groups share a common philosophy motivates them to carry on.

Apart from forming federation/s, linkage with certain financial institution/s for further financial requirement of the SHGs may be essential. Depending on the situation, the agency may link the groups with an existing financial institution/, or may have to create an appropriate financial institution, which can take over that capital assistance role of the withdrawing agency. The third kind of linkages would be with other agencies, which provide certain skills, and information, which may be necessary for the further growth of the group.

By the end of this stage the groups are able to function independently and communicate with the Cambodian Vision in Development agency and other agencies through their federation/s. The groups continue to help their members in the spirit of cooperation and mutual help. The groups also start looking beyond the limited objective of their own members and address larger issues. Linkages within federation of the SHGs as well as linkages with the other PO/CBOs like the Village Development Committee (VDC) within their village or communes helps them in understanding the larger issues and participate in solving them. The confidence they have acquired through the innumerable meetings they have participated in the SHGs help them in taking an active role in the larger decision making bodies.

Linkages with outside agencies for financial and skill related needs of the groups makes the phase out of the facilitation agency relatively smooth. In case there is no financial agency, which can cater to the needs of the groups, the phase out may involve setting up of a financial institution, probably run by the community to take over the functions of the WCA of the agency.

Since there are so many uncertainties with regard to some of the linkages mentioned above, often it is very difficult to say exactly when the agency can withdraw from the area. However, partial phase out is possible, if the agency is able to monitor the groups through the federation.

6. Role of CVD in SHG Processes

Cambodian Vision in Development agency and its staff have very clear roles to play in organizing SHGs. They can be broadly mentioned as:

6a - Facilitation

Facilitation is the most vital input from Cambodian Vision in Development agency into the SHG processes. It is also the single largest investment made, in term of time, by the agency to the group. It has tremendous implications in ensuring the quality and even the future of the group. Good facilitation can create strong self-reliant groups, where as poor facilitation may result in over-dependent groups, which may cause to exist, once the external support is withdrawn.

Facilitation is crucial to SHGs because the groups are addressing the problems of the poor and the disadvantaged. These are people who had less experience in organizing, sharing and questioning. We are talking about groups of people who have, by and large, remained passive especially at community level.

Facilitation is used to motivate this disadvantaged population to get out of the inertia they have been in all these years. Due to the nature of these problems, facilitation in SHGs takes on a kind of a "fasciculation" mode.

It means that the facilitator plays a proactive role in trying to inculcate certain value of self-help, mutual cooperation, solidarity, equality, equity and social justice. Since the concept has in-built elements which are aimed at fostering the above values and thereby empowerment the disadvantaged people, the facilitator needs to play a proactive role in making the groups practice these values.

This form of facilitation is also fraught with dangers. Since the above-mentioned values do not automatically manifest in the community, it needs to be actively professed. As a result the facilitator may be seen as too forceful and inflexible in his/her approach. Further, if this community is willingly adopting all the suggestions of the facilitator, she/he may use this importance to manipulate the situation. Instead of making the group self-reliant and empowerment, we may end up having a group that is at the mercy of the facilitator. The relationship between the facilitator and the group under such circumstances is not very different from the relationship that the group members have with the dominant sections in the community. The facilitator should be aware of these dangers and be able to make the distinction between manipulation and facilitation. S/he has to be sensitive to understand the perceptions of the group so that facilitation becomes easy.

Facilitation is a task aimed at enabling the group in handling all its affairs on its own. Apart from internalizing the aforesaid values in the groups, it is also aimed at training the group members, on the job, on the various tasks of the group so that the members take over the overall management tasks of the group.

Thus initially the CBR worker helps the groups in conduction meetings. Eventually the whole aspect of meetings - assembling, listing agenda, discussing on each agenda one by one, ensuring every body's participation, paraphrasing or summarizing the discussions to facilitate decision-making, deciding on the particular point, moving on to the other point in the agenda and going through the same process, at the end reading out the whole minutes to the group and obtaining signatures of all members against the minutes - are handled by the group itself.

Additionally in the financial meetings, the group learns how to conduct the meeting and the transactions-saving, repaying principle, interest, totaling all receipts along with the previous closing balance, keeping aside money for all the liabilities of the month, like WCA, stationary to be bought,..Etc. Opening up on discussion on the borrowing by announcing the money available for borrowing, receiving oral proposals, discussing and prioritizing them and later making final decision on loans, making payments recording all the above into the appropriate books, and reading out the entire details of transaction including the money left over. Through active facilitation, the staff transfers skills to the groups in handling all the above tasks during meetings.

In the initial stage of the self-help grouping, the staffs are more intensely involved in facilitating the groups than in the later stages. Slowly and methodically, as the group becomes familiar with the processes, the staff needs to hand over simple tasks to the group. This helps the group to gain confidence and enabling them to take over more complex tasks so that the ultimate phase out happens in a smooth way. The facilitator has to encourage, prod, cajole and motivate the group in taking over the various tasks of the group. If a supportive atmosphere is created for their learning the group learns faster and the phasing out stages can happen faster as well. By the time the group is years old, most of the routine functions like conducting meetings, bookkeeping, and loan management should be easily handled by the groups.

6b - Training

Training plays a very important role in the capacity building process of the SHGs. Therefore the entire activity need to be carefully planned and carried out systematically. Firstly, we need to think and decide how to go about this task. I think that the various responsibilities of training can divide into four main steps as following:

We shall see what have been involved in each of those steps.

i) Training needs assessment

Needs assessments are the important prerequisite for undertaking any activity. The purpose of this exercise is to help in planning activities, which are more relevant to the target groups or communities. Since it is the training needs of the groups we need to assess, it is important that the needs assessment exercise involve the groups fully in determining their training needs. Training needs assessment of SHGs should, first of all, consider these questions.

• What are the objectives, roles and functions of SHG?
• What is the present status of the SHGs in relation to the above questions?

These two questions need to be thoroughly examined by both the CVD expectation and the groups themselves. CVD should facilitate these discussions by providing clarifications wherever needed, for e.g., what is the objective of SHG as CVD sees it should be. The choice should, as far as possible, be left to the members so that the needs assessment become more realistic.

This exercise should, in principle, be carried out with all the groups to understand the needs, which may vary from group to group. At the end of this exercise CVD should have a list of training needs expressed by the groups, preferably recorded separately for each group.

While it is easy to decide on the training needs related to the SHG objective and group functioning, it is to broad and vague to decide the training needs of members in their day - to - day lives.
However it is important to understand these needs too, in order to execute the training program as holistic as possible. These needs relate to their immediate living conditions.

There is a third set of training needs is related to the larger situation in which the groups are placed. Issues like governance, environment, impact of the market economy on rural life, the changing in social values, etc., are some examples to illustrate these training needs. These are macro-level issues, which have influence over their micro life situation. Cambodian Vision in development should, come to a general agreement on purpose and methodology of training needs assessment.

ii) Preparation of training and design

This constitutes the translation of training needs into specific training modules wherein clear messages addressing the needs are imparted. This forms the most crucial part of the training program because an ill-designed training module could fail in reaching the desired objectives. This step involves the following process:

• Grouping of the training needs which are common
• Converting the needs into issues or topics of training
• Preparation of training designs for each topic/module
• Preparation of a supplementary note on the content and methodology for each module.
• Logical sequence of the topic (should be flexible to accommodate specific needs)
• Training of trainer

The methodology adopted should foster maximum participation. In order to make the learning interesting are various techniques like stories, games, role-plays, small group discussions, etc., need to be appropriately used. Care should be taken to ensure that the methodology creates a non-threatening, cordial and informal atmosphere, which is conductive to learning. The examples, stories, games etc. should be sensitive to the socio-cultural context of the community, to gender relation, etc.

The supplementary note should contain a summary of the content to be included in the session and the important messages to be arrived at. This helps in bringing about certain uniformity in what we are talking to various groups. The note should also explain the various techniques used in the session in a "how to use" fashion so that any trainer who is not familiar with a particular technique learns how to use the same.

The last stage of preparation is training of trainer. This in fact starts in the beginning of this whole program. The future trainers will be involved in the whole design preparation so that get a first hand experience in curriculum development. This enables them to understand the training modules better and thus impart the same more effectively. However in the end it would be good to test the modules through some mock sessions where the trainers would use the modules and understand how to use them.

iii) Training implementation

This is the real action part of the whole training program. This step involves scheduling of the training modules to the SHGs. The scheduling should take into account the convenience of both the groups as well as the CVD staff. Monthly training schedules should be drawn in the CVD meetings and the same schedule should be adhered too as far as possible. The groups will be informed in advance about the date of training. The group will also informed about the topic of the session so that it does not come as a surprise to the members. On the other hand it enables them to participate in the session with relevant questions.

The duration of the training module depends on the participants and the facilitators agreed upon. Sometime intensive training program spanning 3 days to one week are found to be very effective. It gives the trainees and the trainers an opportunity to lives together and maximizes learning. However in general, the duration of all modules will be of one day.

It is better to organize the session in the office premises of CVD, rather than in the village, to avoid inhibition while discussing certain sensitive issues. Lunch and refreshments may be provided by CVD during the training sessions. All members of the groups are required to attend the group-training programs.

In general each of the training session would be handled by at least two staff, one of them being the staff in charge of the concern group. The training team should have a brief planning session on the eve of each training session in order to discuss their respective role during the session. Care should be taken to ensure that there is compatibility between the team members and that they do not express complicating ideas to the groups. This planning session also helps in getting the entire required materials ready before the start of the session.

iv) Training documentation, follow-up, and evaluation

This step tells us if everything has gone on well and that the groups have been benefited or not from the training programs.

A follow-up plan is built into the design of each training module, which is specific to the concerned topic. The follow-up is planned in term of concrete action plans, which are made by each group at the end of each training module. The concerned CBR staff is responsible to monitor the follow-up action plan and facilitate the groups in carrying out the same.

A detailed training report should be written by the staff in charge of the group so that it enable monitoring, following-up, and evaluation exercises. The responsible staff shall maintain a separate file for each group on training. They will also ensure that the training sessions are recorded in the SHGs minute book so that the group too has the training records. This means that each group will have to bring its minute book for the training sessions. Further the general meetings may be used by the groups to revise and reflect on the training learned.

A mid course evaluation may be conducted, if we felt necessary. In CVD, we considered that this action is very crucial in order to check the effectiveness and the quality of the training sessions and their application. This action could be done with the assistance from the Human Resource Department (HRD) to ensure if the training program heading to the right direction and to make necessary modification.

At the end of the entire module of training for the SHGs, a detailed and thorough evaluation may be conducted to see if the objectives of the training are attained. This evaluation can also be conducted with help from different units of CVD.

CVD may also invite external evaluators, preferably from other agencies. Learning from such evaluation exercises should be incorporated into the next round of the training programs.

Apart from the training program for the group as a whole, certain other training program will have to be organized for specific responsibility. Training for the leaders/office bearers is important. The book keeping training for the secretaries of the groups need to be intensified and regularized until each of them is able to handle the books independently.

Some important areas or topics where the SHGs may need training are as follow:

• Understanding and internalizing the concept of SHGs
• Conducting and facilitating their meetings effectively
• Collective leadership and decision making in SHGs
• Skills in book keeping on all group documents
• Problem solving and conflict resolution in group
• Credit management
• Cooperation, mutual help and in building solidarity
• Awareness on larger issue such as environment, gender, human rights, etc.
• Increase their self-confidence and self-respect, etc.

Training in SHGs can start at any stage of the group, once it has stabilized. However, it has to allow some time for the group to become strong enough before in can have any effect. Training can play a very effective role especially during the withdrawal stage when the weakness of the groups needs to be addressed.

7. Working Capital Assistance (WCA)

Working Capital Assistance - WCA, would be provided to the groups that have managed their own money satisfactory over a period of time. Loan would be given directly to groups. This money goes into the common fund of the groups. Later the groups decide how to use the assistance, for lending to members. Then the groups repay the money to the agency through the CBR project. The repayment schedule/rate would be jointly agreed between the groups and CVD. However, the groups are encouraged to repay on a monthly installment basis, preferably from the very next month of borrowing. Here, WCA is an interim arrangement until the groups are able to link up to financial institutions.

Rationale: As said earlier in the previous section, the rationale for providing WCA is in three folds:

• WCA increases the common fund and thereby enables a group to grant larger loans to its members.

• Since it is given to a group on account of its god performance, WCA provides an incentive for good group work.

• WCA helps enhance the decision-making capacities of the groups by providing them opportunities for managing larger amount.

CVD can decide whether to give this assistance or not. If it decides to do so, it still has to whether it wants to charge an interest, whether it wants the group to repay starting right away, in monthly installment, or prefers to keep the amount in the group for a while and later take back the total amount, or a combination of these two alternatives.

CVD may evolve certain procedures to implement this assistance. Since the assistance is aimed at making the groups strong and self-reliant, the criteria used to select groups for assistance should be focused on aspect of groups functioning.
The criteria should be measurable or observable. Once the criteria are decided certain minimum standards may be set for each of the criteria. Each of the groups requesting for assistance may be assessed against these criteria and the request may be decided based on this assessment.

7a - Procedure for Approval

In order to receive WCA, the concerned groups may have to submit a written proposal to CVD through the facilitation of CBR project, containing:

• An application stating nature and purpose of the request, signed by three office bearers

• A copy of minutes of the meeting, in which the group decided to request WCA from CVD, signed by all of the groups' members.

• A copy of the most recent trial balance of the groups accounts, signed by the three office bearers

The concerned CBR worker presents the proposals for the WCA, on behalf of the group, in the monthly CBR project meeting. S/He attached his or her recommendations to the proposal before making the presentation.
The recommendation includes her/his comments on the size of the assistance requested, to enable the CBR to take appropriate decision. The CBR recommendations may be given due weight since they are working closely with the group. All the CBR staff-manager, assistance manager and CBR worker in the CBR project meeting then discuss the proposals, and decisions are taken. In principle, decisions could include the following:

• The proposal could be approved on a requested amount or a smaller.

• The proposal could be returned to the group for clarification.

• The proposal could be rejected.

For each proposal, the manager writes the decision made and reasons for the decision on the proposal. Once the CBR agrees to give a group WCA, the concerned worker prepares an agreement to be signed between the group and the CBR project.

Agreements are written in Khmer and contain details of the assistance, the repayment schedule, and a provision for action in case of irregularities in repaying or misused of the assistance. (For a specimen copy of the agreement, see section III).
All the group members sign on behalf of the group, and the manager and concerned staff sign on behalf of the CBR project.

A copy of the agreement was given to the group. As soon as the agreement is signed and the amount of WCA is handed over to the group in each regular group meeting. Thus the whole group becomes a witness to the capital given by the CBR.

Subsequently from the next month onwards the group starts repaying. Initially the CBR staff that attends the meetings may receive the installment repaid to the CBR project. He submits the same to the office (Accountant/Manager) and obtains a receipt, which he gives to the group.

However the group may also assign the office bearers or any other member with the responsibility of repaying the installment to the CBR project directly. This is the preferred option since this does not make participation of the CBR staff in the meeting of the group, compulsory.
Each group keeps a separate record on the WCA and repayment in either its cashbook or loan register. The CBR worker gives the groups printed receipts, signed by the manager or accountant, for each installment repaid to the CBR project.

7b - Criteria for approving WCA

CVD may have to evolve certain criteria to assess the loan applications of the groups. The criteria may be evolved in consultation with the groups. As a point of reference, I have shared what happened in Samlaut CBR project with regard to this issue as the following:

In September 2000, CVD organized a meeting of the office bearers of all the groups to decide on the criteria required for the groups for them to be eligible for WCA. In the meeting groups decided on ten criteria that they would have to meet:

1. Regular meetings: At least twice a month.

2. Regular attendance: At least 75 % times

3. Regular saving: As per the decision of the groups

4. Quality meeting: The discussion in meetings takes place democratically, all members participate and decisions taken collectively.

5. Prioritization of loans: The group gives preference to loans, which are urgent in nature than the ones, which can wait. Loans for more vulnerable given priority.

6. Regular repayment: Repayment is done as per schedule

7. Overdue: Overdue if at all is present should be negligible

8. Loan default: There should be not loan default. If there is one what are the group measure should overcome such problem.

9. Loan utilization: The members use Loans for stated purposes. The group makes physical verification of assets bought by the members.

10. All members are aware and familiar with all the rules of the group.

The CBR project staff met to determine how to use these criteria to decide which groups should receive loans, and how much each should receive. The field staff felt that the maximum loan to a group can receive should be three times of that common group fund.

They felt that a smaller amount would not sufficiently motivate group, which were functioning very well. The field staff decided that a group seeking WCA would be evaluated jointly by the group and the concerned CBR staff against the criteria developed earlier. The group should receive some score from 0 to 10 for each of the criteria, so its total score could rang from 0 to 100 points.

The amount of WCA given to a group would depend on both its score and the amount of money in the group's common fund at the time of the request, calculated as follow:

• No assistance if the score is between 0 - 50

• Assistance equal to the group common fund, if the score is between 51 -75

• Assistance equal to twice the groups common fund if the score is between 76 - 90

• Assistance equals to third time of the group's common fund if score is 91 - 100.

The experience of Samlaut has been shared to give some indication of what can happen in this process. The implementing agency may decide on its own approach in this regard.

The agency will also have to take a decision on the future of the assistance. How many times will it provide assistance to the given groups? Under normal circumstances and NGO cannot guarantee its continuation of support to the groups or to any community for that mater. This does not mean that the community may not need any monetary assistance later on. How the group can access credit from out side need to be answered as part of the withdrawal strategy of the agency in relation with the groups.

7c - Some general points on WCA

Group Requirement for receiving WCA: WCA should clearly be seen as a reward for good group functioning. Appropriate requirements for groups seeking WCA include, among other, regular meetings, high attendance at meetings, regular saving, good decision making process, good discussion, timely repayment of loans, and proper utilization of loans.

Use of WCA: The CBR project would not restrict the use of WCA as long as it meets the genuine needs of the members and results in their development. Groups would not be allowed to use WCA to give loans to non-group members.

Interest: Several factors would be taken into consideration when determining the amount of money loaned to each group. These included the group's performance, its ability to manage money and keep appropriate records, and its members' own saving. For practical purposes, WCA should not normally be more than twice the size of groups' owns common funding or saving. A group's need for money would be secondary consideration. (However, in Samlaut, the staff decides to give loans up to three times the size of the group's common fund.)

One negative aspect of basing the assistance on the size of the groups' fund is that groups with larger funds, normally comprising members who are better off, tend to get bigger assistance and poorer groups tend to get smaller assistance. At the same time it should be noted that the poorer group might not be in a position to use and manage larger funds. Therefore the agency should keep these factors in mind while deciding the size of the loan assistance.

Repayment schedule: In order to inculcate a Psychology of repayment, the agency/CBR may require all groups to repay in monthly installments. The size of installments may be agreed upon mutually between the group and the CBR project, and may differ from one group to the other. It would depend on the size of the WCA loans the terms and conditions of lending within the group, and other factors. Repayment may not depend on the end use of the WCA, and therefore the groups would be responsible for repayment, if necessary, from their common funds. This is a test of the groups' attitude towards the assistance and its willingness to part with its own common fund for repayment.

7d - Future of WCA

In general WCA is an interim measure taken by the agency to provide credit to the groups. In the long term run, this should be taken over by the formal financial institutions in the area. However, given the uncertainty in the present political and economic situation in the country, it is hard to predict that there will be financial institution in rural area, which are accessible to the community we are working with. Hence we may have to make a medium term arrangement if credit is still a strong need of the community. A kind of a community structure may be set up which can manage the WCA, which can be handed over to the community, based on certain regulations with regard to its use.

This transfer of ownership of the fund has to be done with extreme causation and it needs to have clear stipulations and sanctions on its misuse. Close monitoring may be needed to be done by the agency in the initial phase of fund management by the community. Social justice, in deciding the loan applications from various groups needs to be assured. Otherwise the capital may be hijacked by the powerful groups and leave the poor groups out in the cold. The structure and the composition of the fund management body, its bylaws, procedures for funding, and all other aspects of fund management needs to thoroughly discussed by all the groups and the final shape of the system should be evolved based on consensus.

7e - Auditing

Auditing of SHGs is an effective monitoring tool. As explained in the elements of SHGs, auditing does not mean the conventional financial audit alone. In SHGS audit goes beyond merely financial aspects and looks into the whole functioning of the group, its decision-making processes, loan management, loan utilization by the group members, book of accounts, their maintenance and reconciliation. Ideally, auditing should happen twice a year. This measure keeps the groups on track and gives effective feedback on their performance, weaknesses concerns and strengths. This activity helps the groups to make necessary action plans to overcome their weaknesses, and, over a period of time, emerge into strong vibrant groups.

The earlier section on elements of SHGs has more details on audit in SHGs. In this section an audit format based on a checklist drawn up for CVD Samlaut SHG groups is enclosed as appendix III, for further reference.