Premium
An economic model of self‐help groups: policy implications for banks and NGO initiatives
Author(s) -
Sivramkrishna Sashi,
Panigrahi Ramakrushna
Publication year - 2001
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.780
Subject(s) - typology , institution , set (abstract data type) , cost sharing , public economics , financial institution , business , economics , financial system , finance , political science , sociology , social science , computer science , anthropology , law , programming language
Abstract In India, the Self‐Help Group (SHG) has emerged as a suitable innovative institution in bringing formal financial sector credit to poor. This article constructs an economic typology of SHGs based on four important economic variables, namely, interest on members' savings paid by the SHG, sharing of SHG surpluses by members, members' claim on exit from the SHG and lending rates charged by the SHG to members. An economic analysis of each type of SHG shows these variables to be important in terms of the members' costs of borrowing and demand for credit. Based on the analysis, some leads for a set of policy guidelines for each type of SHG are presented. Copyright © 2001 John Wiley & Sons, Ltd.