SHG Training Manual

CHAPTER – I
Introduction
NERCORMP is a livelihood and rural development project aimed to transform

the intervened lives of the poor and marginalized Tribal families in North East (NE)
India. NERCORMP is a joint developmental initiative in North East India of the North
Eastern Council (NEC), Ministry of DONER and International Fund for Agricultural
Development (IFAD). Its broad objective can be summarized as follows:
“To improve the livelihoods of vulnerable groups in a sustainable manner

through improved management of their resource base in a way that contributes to
preservation and restoration of the environment”.
The Project was launched against a backdrop of not many successful Rural
Development interventions in North East. Equally glaring was the weak and often
absence of right Social and Developmental Institutes at the grass root level.
Therefore, one main objective was to perform a SUCCESSFUL

DEVELOPMENTAL PROJECT and at the same time come up with a TRUE
DEVELOPMENTAL MODEL evolved from the grass root. It also aimed to establish a
sense of stakeholder ship / ownership by the Communities.
This project can proudly claim and even proclaim the establishment of SHGs
as growth engines in each of our project villages.
Sustaining long-term interventions, especially in development activities,

require strong and robust institutional arrangement. In our project, Institution building
becomes necessary not only to respond to preferences of the community members
but also to efficiently utilize the natural resources and traditional knowledge available
in the area. The institutions are to provide services consistent with the people’s
aspiration, taste and preferences.
It is in this context that the NERCORMP facilitated the formation of SHGs
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The women Self Help Group is mainly to address and empower women
related issues both in livelihood and social sector. The thrust of SHG revolves
around credit plus activities. To sustain SHGs, establishment of linkage with formal
financial institution is address in the project.
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CHAPTER – 2
What is SHG?
a) Definition/Meaning: Self-help groups are small group structures formed

for mutual assistance, satisfying a common need, overcoming problem and bringing
about desired social and/or personal change for accomplishment of a special
purpose. It is a group of homogeneous people coming together with a purpose of
thrift and savings to achieve prominence in the community as key actors in provision
of credit.
b) Characteristics of SHG
i) Homogeneous group: Are group of people with similar characteristics, caste,

creed, sex, occupation, geographical area, place of origin. Same language, income
level, etc
ii) Affinity: Are group of people bound by mutual trust, respect, affection, who
support one another and amongst whom exploitative relationships do not exist.
iii) Geographical proximity: Preferable people from the same village.
iv) Size of groups: As per the RBI guidelines a group must consist of 10-20
members.
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CHAPTER – 3
PROCESS FOR FORMATION OF SHG
PRA Exercise
Mobilization and and Identification of
Sensitization of the Visioning Target people
community (village level)
Group Formation Group

and Orientation Visioning
I. Community Mobilization and Sensitization
i) Selection of village should be need based.
ii) Collate information of the villages from the different line departments
e.g. revenue, statistics, election, etc.
iii) Interaction with village elders, youth, and women, preferably separately
and explain to them the reason for the visit.
iv) Fixed the date, time and venue for the meeting where the communities
feel convenient.
v) Venue should be located at a location that could be relatively easy

accessible by all the villagers, especially women.
vi) Take a tour around the village to have a sense of the surrounding.
vii) Ample time should be given for conducting the meeting.
viii) Meeting should be chaired most preferably by the Village Headman.
ix) Explanation should be to the point, precise, and clear.
x) The importance of having SHGs should be explained.
xi) Meeting should be interactive and inclusive.
xii) Elicit suggestions/ comments from the communities.
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II. PRA Exercise and Visioning (village level)
Steps for Conducting PRA Exercise
i) Material to be used
a. Village Map
b. Chart paper
c. Rangoli Powder (four to five colours)
d. Markers/sketch pen
e. Pencil & eraser
f. Scale/ruler
g. Local material such as stones, green leaves, bamboo, etc.
ii) To obtain permission from the village headman/chief to conduct PRA.
iii) Facilitator should make a one day Night Halt prior to the PRA exercise
(To make Time Line of the village and Internalization of the ethos of
the village and rapport building with the villagers)
iv) PRA Exercise start
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v) Social Mapping: Communities take part in demarcating their village
boundary to identify numbers of households, church, schools, institutions, village link
roads, etc. This information will be vital to know the social structures of the villages.
Sample format is given below:
vi) Resource Mapping: To demarcate the resources available in the village such
as Jhum land, orchards, forest cover, catchment area, rivers and streams,
agricultural land, terrace cultivation, etc. This information will be vital to know the
actual socio-economic condition of the villagers. Sample format is given below:
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vii) Seasonal work schedule: The communities have to prepare a chart showing the monthly work plan in the
village. This will be helpful to the implementing agency to know the actual work schedule of the communities. Based
on this information implementing agency can suggest the communities to take up various activities. Sample format is
given below:
Activities Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Rainfall
Jhum
Terrace
Cultivation
Orchards
(Orange)
Infrastructure
Education
Labour
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viii) Linkages: linkages with government line department & financial
institutions and other agencies to enhance the skills and financial position.
ix) Resources (Inflow/Outflow):
a. Inflow: The communities have to list down what are the items coming
from outside to their villages.
b. Outflow: The communities have to list down what the items are going
out from their villages.
For Example:
Inflow Approx. Qty./Nos. Outflow Approx. Qty/ Nos.
1. Salt 1. Livestock
2. Utensils 2. Vegetable
3. Sugar 3. Ginger
4. Tea Leafs 4. Orange
5. Soap and detergent 5. Broom Grass
6. Livestock 6. Arecanut
7. Kerosene
8. Dal, Muster Oil
9. Fish & Dry Fish, meat, etc
10. Potato, Onion, etc
11. Iron
12. Cosmetics items
13. Watch, Radio, Tape, TV, etc
14. Sandal, Shoes
15. Electrical Items
16. Building Materials
17. Books, register, pen, pencil, etc
18. Cloths
19. Others
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After this exercise the community will know what are the item that flow from outside
market to the village every month and what are the items & quantity going from the
village to nearby market every month.
x) SWOT Analysis of the village: The community has to carry out SWOT
analysis to find out their Strength, Weakness, Opportunities and Threats of the
villagers in details on a chart paper.
xi) Criteria for formation of groups (on the basis of affinity-trust, homogeneous,
geographical proximity and wealth ranking data).
(a) Identification Characteristics of SHG Members:
i. Sorting out the members (ideal 15-20 members, purely on

voluntary basis, and based on wealth ranking data, e.g. same
income category, same mindset)
ii. Fine tuning of members (Grouping and Regrouping of

members)
iii. Naming of the group (allow them to have their own choice,
preferably local name)
iv. Election of the office bearers (President, Secretary, Treasurer

based on Consensus decisions)
v. Participatory – All the members should interact and work

together.
vi. Accommodative – Willing to take any suggestion from any

members & discuss on it.
vii. Timely address issues raised by the members
viii. Formulation of Rules & Regulations
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(b) In depth Orientation for Groups:
After the group formation the following point are to be taken into
consideration.
i) Basic concepts (What is a Group?)
ii) What is Affinity Group?
iii) Concept of SHG.
iv) Structure of SHG
v) Why SHG for alternate model of development?
It will bring sustainable development for the SHG and change the economic
condition of village and as whole.
vi) What kind of membership an SHG should have?
SHG who have gathered together for a specific purpose at a specific place
and who share a common interest
vii) How is SHG suitable for the rural poor in sourcing credit?
 To be able to lend small amount of money to service daily needs such

as income generation activity, education, health, etc.
 SHGs can provide timely credit/loans to its members.
 SHGs impose affordable rate of interest. e.g. 1-2% per month.
 Members trust one another and act as a guarantor for each other
thereby not requiring formal security, and utilize their peer pressure to
ensure proper loan use and repayment.
 SHGs can avail credit from any commercial banks.
viii) List out the total advantages and disadvantages of various sources of
Credit.
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Source of Credit Advantages Disadvantages
Co-operative Societies  Reasonable interest rates  Only for members
 Political interference
 Not timely
 Need for deposits
 Only big loans are
available
 Need for
security/guarantor.
Private Financial  Timely, adequate, and  High rate of interest
Institutions/Money need based.
 Need for
Lenders.
security/mortgage
 Risk of loosing property
 Harassment on non-
repayment.
Banks  Should have a Bank  Need of
Account security/guarantor
recommendations
 Reasonable rate of
interest  No timely credit.
 Some loans without  Long process
security/guarantor
 To much paper work.
 Long term loans with
payment in installment
ix) Aims and objectives of the SHG
x) Functions of SHG
xi) Rules and Regulations
xii) How to conduct meeting (Proceedings, agenda, recording of minutes

books etc.)
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xiii) Planning and Resource mobilization (IGAs, Livelihood
development)
Planning involves the following.
 What work/activity do we want to do? And why?
 When do we need to finish it?
 How will we do it?
 What resources do we need?
 Do we have all the resources we need? Where can we get them from?
 Who will do what work?
Resource mobilization involves:
 Mobilizing all the resources in time so that there is no waste in time, effort,
material and abilities.
 Good resource mobilization would involve getting the right thing at the right
time in the right quantity, at the right place and at the right price.
xiv) Importance of book keeping
It is important to know all decision taken in the SHG meeting and in order ensure
transparency & accountability among all the members and it is also important that all
decision taken in the last meeting should be follow up in the next meeting.
xv) Importance of Leadership rotation
Rotation of Office Bearers and group leaders once in two years in a phased manner
is preferable; however the group may like to take the final decision. Rotational of
Office Bearers should not be one time to keep the momentum effectively.
xvi) SHG Grading
xvii) The importance of linkages with banks (Sustainability of SHG)
xviii) Credit plus Activities. (Insurance, Health Issues, Gender Issues,

Payment services, remittances, etc.
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xxi) Common Fund management: (regular savings, fund raising, loaning
procedures, prioritization of loan in an SHG)
Donation
Social
Work
Loan
Fine
Loan Bank
Interest Interest
Saving
Membership
Fee
Common
Fund
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CHAPTER – 4
Identification of Target people
Group will be formed based on the Wealth Ranking (WR) data
a. Listing out households by names
b. Explain the exercise of WR (Better off, Middle, Poor & Poorest)
c. For each household distribute one piece of paper to write HHs names &
number.
d. Fix economic categories of people (Separate for Better off, Middle, Poor &
Poorest)
Wealth Ranking:-
After completing Social Mapping, Resource Mapping, resources

inflow/outflow & group visioning they should categories every households based on
the resource available in the village and itself also. The facilitator should ask every
household to put themselves in which categories they belong.
It is the facilitator roles to follow up and suggest them to follow the Criteria for
selection of category which is given below for reference.
Grade – A (Better Off)
1. Their should be enough rice for the whole year (from wet terrace or from
Jhum)
2. There should be income through permanent Orchards.
3. At least one member from household should be a service holder or master

roll.
4. At least one member from household should be a petty businessman.
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5. They should own livestock such as cow (5 numbers), pigs (10 numbers), Goat
(5-10 numbers), Chicken (15-20 numbers), approximately.
6. Gross annual income should be more than Rs.70, 000/-
7. At least two to three educated persons in the family & children are going to
school.
8. Semi pucca or pucca concrete house with electrification.
9. Their must be Semi to Pucca sanitary system in the house.
10. Household possessing permanent asset like Sewing machine, T.V., Radio,
Tape, Furniture and vehicle like scoter, bicycle etc.
Grade – B (Middle)
1. Their should be enough rice for 6 months (from wet terrace or from Jhum)
2. Less area under Permanent Orchards
3. No service holder in the family.
4. No side petty business in the family.
5. Livestock- cows less than– 2 numbers, pigs less than 2-3 numbers, Goats
less than– 2-4 numbers, Chicken less 8 -10 numbers, etc. approximately
6. Gross annual income should be in between Rs.30, 000 to Rs.50, 000.
7. Number of educated persons in the family very low.
8. Thatch & Bamboo house, but not electrified.
9. Population in the family is more than the family income.
10. Asset like radio only.
11. No sanitary system in the house.
Grade – C (Poor)
1. Enough rice for only two to three months (from wet terrace or jhumland)
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2. Totally dependent on daily wages in the village or near by village for rest of
the year.
3. Earning members in the family is a widow, single weak earner.
4. Parent cannot afford to send their Children to school.
5. Land and Orchards are limited, to marginal size (below 1.5 hectare.)
6. Only thatch & Bamboo house.
7. No asset in the house.
8. Gross annual income is less than Rs.25, 000.
9. No sanitary system in the house
10. Population in the family is higher than the family income.
11. No electricity in the house.
Grade – D (Poorest)
1. Enough rice for only one month (from wet terrace or jhum land).
2. Family totally dependent on daily wages exclusively in the village.
3. Annual income of the family less than Rs.15,000/-
4. No livestock in the family.
5. No assets in the house.
6. Absence of family land & property.
7. Open defecation practiced.
8. Kutcha house (thatched)
9. Area of jhum plot owned by the family is marginal.
10. No land and Orchards in the family.
11. Family members are mostly old & unable to work.
12. All illiterate in the family.
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CHAPTER – 5
Group Visioning:
i) What the group need to achieve in the next 10-15 years down the line.
ii) Need to list down the Weaknesses and Strengths of members

(Through Story telling etc.
iii) What they like to achieve (list down the dreams of each members and
as well as group)
iv) Arrive at a collective dream, decision and come up with consensus

(self-dependency)
v) Vision needs to be addressed noted in the minute’s book and pasted in

notice boards/ meeting place.
vi) What is group Mission? In their life time, what are their goals, aims and
Objectives?
vii) Mission: Actions/Steps towards realization of this dream.
viii) Steps to achieve these goals e.g. every parent has a dream for their
children.
ix) Group Brain Storming: Required to achieve their vision.
a. Past, Present and Future (listing out various wish lists) good health
care, credit availability with right amount and at the right time.
x) Prioritization of wish list.
xi) Who is going to take up all these; who are the agent of change, is
there any need for an organized body; yes or not; is it an SHG, etc.
xii) Need to form an organization/group.
Xiii) Future Plan (How they will do) where from they will get the fund.
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CHAPTER – 6
STRUCTURE OF SHG
i) Ideal Size (10-20 members)
ii) Office bearers: (Elected)
a) President
b) Secretary
c) Treasurer
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CHAPTER – 7
FUNCTIONS OF SHGS :
 Savings and thrift
 Regular Group Meeting
 Community mobilization
 Social agreement
 Credit
 Social work
 Gender issues
 Legal issues
 Promote Income Generating Activities
 Value addition/Production Units
 Village marketing
 Advocacy
 Maintaining books of records
Savings and thrift
i) Fix the rate and intervals of savings
ii) Regular saving / contribution and regular lending
iii) Opening of Saving Bank Account in commercial banks
iv) Accounting other incomes such as social work
viii) Entry into the Saving Books and Individual Pass Book
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Regular Group Meeting
i) There should be regular meeting
ii) Time, Place should be fixed
Community mobilization
i) Cleaning drive within village
ii) Community contribution should be encourage
iii) Health, Hygiene, education, should be encouraged.
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Credit
i) Credit need assessment
ii) Fund absorption capacity assessment
iii) The SHG need to define their credit terms/conditions whether it should
be short, medium, long terms.
ii) Right amount at the right time.
iii) Broad equal opportunity to all the members. Preference will be given to
the poorest of the poor.
iv) Repayment should be fixed before sanctioning any loan amount to

members.
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Promote gender equity
i) Raising gender equity issues in the villages
Legal Awareness
i) Basic knowledge about
ii) women rights
iii) child rights,
iv) domestic violence
v) Dowry, etc.
Promote Income Generating Activities
i) Identification of individual/ group activities
ii) Prioritization of economic activities for members according to needs

and resources available in village
iii) Create Awareness about the cluster production approach
iv) Sensitizing the need to Federate
v) Understand the strength and the potential of collectivity
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Advocacy
i) Encouraging in promoting more SHGs based on population in the

village.
ii) Encouraging to take part in decision making at the village level
iii) Encouraging participate/attend the training programme organized by

any developmental agencies.
Maintaining books of records
i) Membership Book
ii) Attendance book
iii) Minute Book
iv) Cash Book
v) Ledger
vi) Receipt and payment voucher
vii) Loan Document Books
viii) Individual Pass Book
ix) Bank Pass Book
x) Cheque Pass Book
xi) Labour register
xii) Monitoring Records
xiii) Visitor’s Book
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Essential Requirements to rate the performance of SHGS
 Monitoring and Evaluation
 Social Audit
 Internal/External Auditing
Social Audit:
Implementing agency has to conduct a social audit on half yearly basis to know the
overall functions of SHG, such as maintaining of Books of accounts, loan utilization,
benefits, mind set of SHG and participation of members. Implementing agency has
to frame a checklist based on the activities the SHGs are doing for the last six
months.
Monitoring and Evaluation:
 Quarterly activity monitoring through community participation.
 Self Pictorial Participatory Impact Monitoring
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Implementing agency has to frame the quarterly monitoring format covering the
sector & sub sector relating to SHG functions. It will provide all the information to
implementing agency to know how the SHG are progressing or if they do need more
training or future guidance. Based on this information the implementing agency will
maintain the management information system at central level. The implementing
agency will be in a position to provide the day-to-day information to the donor
agency.
Internal / External Auditing
As any financial guideline the donor agency would like to know the utilization of fund
by the SHG. Quarterly Internal auditing of all the books of account is must in front of
the SHG members in a participatory manner and it will provide the transparency &
accountability among the members. Regular internal auditing will help the
implementing agency to know the performance of the SHG and it will encourage the
SHG to do the better work.
The group should maintain audit file and necessary action must be taken on audit
observations. The audit reports are the credibility report of the group evaluated by
the internal / external agencies which outside agencies believed on. It is also a
report financial status of the group and capacity to handle fund.
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CHAPTER – 8
RULES AND REGULATIONS
SHG BY-LAWS:
I. Name of the Groups :
II. Office Address :
III. Vision of the group :
IV. Objectives :
 To establish forum wherein women can critically analyse their socio-

economic situation.
 To build up self-confidence and spirit of cooperation among women
 Economic empowerment of women in society aimed at self-reliance

and self-sufficiency.
 To eliminate the role of money lender
 To enable women to insure themselves against various types of risks

(e.g live, health, animals, crops etc.)
 To establish linkages with banks, government line departments and

other institutions for socio-economic development through SHG.
V. Membership to the group
 Eligibility criteria for membership includes:
a. Should be women who have attained above 18 years of age.
b. Not above 60 years of age.
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c. Should be mentally stable.
d. Should be actively involved in all the activities of an SHG.
e. Should fill in SHG prescribed application form and sign it.

The SHG members should endorse their application along
with signature of the witness.
f. Should pay their annual membership fees.
 Membership is not restricted to the group on the ground of caste,

creed and language.
 The SHG reserve the right to dismiss members who do not abide
by the norms or members whose behaviour is offensive to
objectives of the group.
 In the event of resignation, death or mental ill health or if the

respective SHG members withdraws their recommendation the
membership will be cancelled. If the membership in the SHG is
cancelled the membership fees will not be refunded.
vi. Nominee
 Every member should fill a nominee form and nominate a beneficiary.
 In the event of death the nominee will receive only the saving amount and
interest propionate to her saving amount.
vii. Saving
 The group will save a weekly, fortnightly and monthly amount
 The saving amount will be first deposited in the bank if need they can
withdraw to give loan to its members only.
 This money will be utilised only for advancing as loan to its members
mainly for income generative purposes and only partially for consumption
in the ratio of 80:20.
 All the excess cash will be deposited in the bank.
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 Funds received from the government and other institutions for
development activities can be managed as per the agreed terms and
conditions with the donor agencies.
Habits: Income – Saving = Expenditure
viii. Contribution
 The members will contribute along with savings an additional amount as

per their requirement to meet their operating cost.
 The saving, contribution, earnings, income and interest should be recoded

in the appropriate books of accounting at the time of meeting.
ix. Rate of interest
 The rate of interest within the group should range between 1% to 2% per
month
 The interest should be given every month along with the principal amount.
 In cases of loan where the gestation period is long the only the interest
rate may be deposited.
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x. Loan
 The loan will be given only to the group members.
 Loan will be given in propionate to ones saving only.
 Person desiring to take a loan should submit an application stating clearly

the purpose to the secretary before meeting starts.
 Loan application by a member on their field of expertise will receive a

priority.
 Loan will be extended primarily for income generative purposes
 No person can submit more than one application at a time.
 Loan applications will be discussed and decided by the group at the

meeting.
 After it is approved by the group the person should fill in the loan schedule
and agreement of loan repayment.
 The loan amount will be despatched at the meeting and in cases of

shortage of cash the secretary can withdraw from the bank and give it to
the person.
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xi. No Collateral Security
 The principle of solidarity and peer pressure will be applied for the
repayment of loan.
 As per the RBI norms, if the group wants to take loan from the bank, no
collateral security will be required. The bankers will follow 1:4 as per the
savings. For e.g. if the group having Rs. 1000/- balance in the saving
account, they can take loan of Rs. 4000/-.
xii. Meeting
 Any member may chair the meeting, but, involvement of every member
should be encouraged.
 The date, time and venue for next meeting should be decided in the
previous meeting.
 The meeting should be held on rotation at member’s house or at a

common central place, which is accessible to all members, apart from
places of worship.
 At every meeting the group will deliberate and discuss on one social issue
of the village decided by the group until they are able to find solution.
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xiii. Attendance
 All the members who attend the meeting should sign the attendance
register and members who do not sign the attendance will be treated
absent.
 Non-members who want to attend SHG meeting should obtain prior

permission from the group and they will not be allowed to vote or give
opinions.
 If a member is not able to attend SHG meeting she should submit

application of leave to the president or inform the reason, which will be
read to the house and decided by the members.
 A member who fails to attend SHG meeting without prior notice and leave
application will be fined Rs. 2 to upto Rs.10 per meeting as decided by the
group.
xiv. Proceeding of the Meeting
 Singing of SHG anthem or Group song is must
 Selection of Chairperson
 Taking of chair by the chairperson of the meeting
 The secretary will place the proceeding of the preceding meeting and the
president and the secretary will sign the proceeding only after the approval
by the house.
 Reading out agendas for the meeting by the chairperson and taking other
agendas if any.
 Discussion will be as per the decided agendas only.
 The secretary/book writer should record all the proceeding of the meeting
in the minute book.
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 The secretary should read out the proceeding and share the information
related to total saving, loan due, interest amount, interest due, earning of
the group and repayment of loan by the loanees during the meeting.
 Vote of thanks for the meeting by any chosen member
xv. Quorum
 A minimum of 75% attendance of the total membership will form a quorum

for a meeting
 Decision taken at meeting below quorum will not hold value.
 For emergency meeting a minimum of 50% attendance is required as a

quorum if a quorum is not obtained the meeting is postponed for an hour,
and when reconvened the meeting is considered official.
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xvi. Vote
 If a group decides to elect its members, one person is eligible to vote only
once.
 A member who has not paid their membership will not be eligible to vote.
 In the event of any member getting equal vote chairperson of the SHG has
the deciding/casting vote.
xvii. Signatories
 There will be two signatories of the SHG account viz. Secretary and
Treasurer.
 Funds received from the government and other institutions for

development activities can be managed as per the agreed terms and
conditions with the donor agencies.
xviii. Roles and Responsibilities of Office Bearers:
President’s role: The president has to chair and preside over every meeting. He will
initiate the discussion on agendas that comes up in the meeting. The president can
call for a meeting in case if any emergency arises. He has to sign in the minutes and
cash book. In his absence the members will decide who will chair the meeting.
Secretary role: Secretary will be the member secretary in every meeting. He will
read out the minutes of the previous meeting for final approval and he will also sign
the minute’s book and cash book. He is also the authorize signatory for signing the
cheque books and cash withdrawal. He will monitor day to day activities of the
group.
Treasurer: The treasurer will collect the savings in every meeting. He will be
responsible for safe custody of the cash, cheque book and books of accounts of the
groups. He is also the authorize signatory for signing the cheque book or any
financial transaction. He will read out the financial transaction in every meeting.
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i) Rotation of Office Bearers once in two years in a phased manner. Rotation of
group leaders is preferable; however the group may like to take the final
decision.
xix. Amendment of Rules and Regulation
 To amend the rules and regulation all the members of the group should be
present.
 To amend rules and regulation of the SHG at least 80% of the members
should approve it.
xx. Distribution of income
 All the movable and immovable asset of the group will be in the name of
the group.
 Income and profits earned will be spent to fulfil group’s objectives.
 Resources can mobilise through membership fees, donation, group

earning, grants savings, interest, social work contribution, etc. to meet the
group objectives.
 Income from the collective business should be distributed equally among

the members
xxi. Termination
 The SHG reserve the right to dismiss a member who do not abide by the
rules and regulations and whose behaviour is offensive to objectives of the
group.
 Membership will be terminated to who fail to attend group meeting or

group programme consecutively for three meeting without prior intimation.
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 If a member suppresses any kind of information in their application as
required by the group.
xxii. Withdrawal of membership
 In the event of resignation the membership fees will not be refunded but
her saving and interest propionate to her principal amount will be
refunded.
 In the event of death or mental ill health the nominee will receive the
saving amount and other benefits.
xxiii. Books of account, audit and renewal of group registration
 Any funds, asset received must be recorded in a proper receipt and they
must be kept with the secretary or at the group office.
 Cashbook must be written and closed at the meeting.
 Bank passbook and chequebook must be kept at a secure place under the
care and custody of the secretary.
 Receipt and payment must be made in the name of the group.
 The group can keep a maximum of Rs.1000, as petty cash amount and
petty cash register must be maintained.
 The group should maintain attendance register, minute register, saving

register cashbook, general ledger, Loan register, bank passbook,
individual passbook, asset register, audit file etc.
xxiv. Admission of new members
 New memberships will be entirely decided by the groups. The criteria

mentioned at Membership to the group too apply here.
 No individual can be a member in more than two groups.
42
 The rules, terms and condition are explained to a person desiring to be a
member of the group.
 A person who is willing to abide by the terms, rules and regulation of the
group will be given a membership.
 The admitted member should sign in the declaration of the rules and
regulation of the document.
xxv. Conflict Resolution
 The group should solve all conflict within the group and if the group fails to
resolve the conflict the group can request the implementing agency or any
other competent organisation to resolve the conflict as a first step.
 Miss appropriation of funds will be dealt with according to law.
xxvi. Linkages
 SHG should compulsorily go for linkages with government line department

& financial institutions and other agencies to enhance the skills and
financial position.
xxvii. Dissolving
 To dissolve the group all the members should be present and it should be
approved by all the members.
xxviii. Declaration:
The above-mentioned rules and regulations were read out to us/me and we have
understood the terms and conditions and signed the same.
43
Sl. No Full Name & Address Age Occupation Designation Signature
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
(Secretary) (President)
(Treasurer) (Vice President)
Witness
44
CHAPTER – 9
Training Modules for SHG
Module 1 – Group Management
I Organizational management
i) How to conduct meetings
ii) How to write proceedings
iii) How to draw up an agenda
Every member have to bring at least one agenda in a white sheet paper and put it
during the meeting for discussion, but it should be related with SHG benefits.
iv) Election of Office bearers.
v) Collective decision-making
It is important to take into account everybody’s view and discuss on it and take
collective decision in favour of the groups benefits.
Module 2 – Financial Management
I. Books of Records
i) Maintaining Minutes Register – All meeting discussion and decision

should be maintained. All the meeting agenda items, discussions and decisions
should be recorded in the register. It is also gives an idea about groups thinking as
reflected in their agenda and how frequently members come together to discuss
their common issues. Sample format are given below
Minute Register
Meeting No :
45
Meeting Date :
Meeting Place :
Meeting time :
Name of Chairperson :
Agenda items - (a) Review of follow up actions from the previous meeting minutes.
(b) Status of cash on hand on previous meeting.
(c) ….
(d) …..
(e) financial information (is compulsory as agenda item)
(f) Loan information (is compulsory as agenda item)
Decisions - (a) …
(b)….
(c)….
(d) Opening fund balance Rs. …….,/- transaction during the period
………..
Closing fund balance Rs. ………/- etc.
46
Signature of the Members present in meeting:-
Sl. No Name of the member of SHG Signature/Thumb Impression
10
11
12
13
14
15
16
17
18
19
20
Signature of Chairperson Signature of Secretary
47
II. Attendance Register – To maintain meeting attendance record to know members participation in meeting.
Sample format are given below:
ATTENDANCE REGISTER
Date……..Month………….. Year………………:
Members’ Name of Member Sex Meeting Date :

No. (Male/
Female) Meeting No :
Meeting Place :
Meeting time :
Total Present
Total absent
Signature of Secretary
48
III. Maintaining of Loan Register: - Loan register is important to keep record of loan transaction and to find out
balance/ outstanding of loan amount. It helps loan balance tracking and collection, know the purpose of loan taken,
and regularity in repayment of loan. The loan number can be used as unique identification number and Cash Book
page number will help in cross verification of records. The loan register will also provide information on regularity of
loan repayment and interest payment. The members signature and group leaders signature will work as prove of
receipt and payment of money. (Sample format are given below)
LOAN REGISTER
Members’ Name :
Loan Purpose Cash Loan Interest Repayment Schedule Loan Balance Loan Signature of Signature
Date No of Loan Book- Amount rate Amount amount Interest Group of
page Date of Loan No. of Amount repaid paid Representative Member
no. First Repayment Installments per (who
Installment term Installment took
loan)
49
IV. Savings Register:- It is Important to maintain savings register to keep record of members contribution / saving
records. The saving amount is generally refundable and so it is important to know how much each member had
contributed. Sample format are given below:
SAVING REGISTER
Date………….Month…………….Year………………
Member Name of members Sex Date:

No. (Male/ Meeting No :
Female)
1
2
3
4
5
6
7
8
9
10
11
Total
Cash Book Folio number
50
V. Cash Book:- Cash Book must be maintained to record all financial transactions and periodical report prepared
out of it. This primary data of cash and bank transactions to be recorded during meeting (as and when transactions
occur). The Cash Book also gives the information of cash balance and bank account balance. The narration of
transaction should be clear to give the idea of expenditure. Receipt and expenditure voucher numbers should reflect in
the Cash Book for future cross verifications. Sample format are given below.
Cash Book
1 1
RECEIPTS For the month of JUNE 2009 PAYMENTS
Date Particulars Voucher L.F Cash Bank Date Particulars Voucher L.F Cash Bank
No. No.
28-06- Opening Nil Nil 28-06- Printing & 1 5 150
09 Balance 09 Stationary (Group
seal)
28-06- Group Social 1 1 1000

09 work
contribution
28-06- Members saving 2 3 150

09
28-06- Donation (From 3 4 500

09 Mr X)
Total Exp 150 Nil
Closing Balance 1500 Nil
Cash
Grand Total 1650 Nil Grand Total 1650 Nil
51
Cash Book
2 2
For the month of JULY 2009
RECEIPTS PAYMENTS
Date Particulars Voucher L.F Cash Bank Date Particulars Voucher L.F Cash Bank
No. No.
05-07- Opening Balance 1500 Nil 05-07-09 Printing & stationary 2 5 150
09 (Registered
purchase)
05-07- Members saving 4 3 150

09
05-07- Deposited in Bank C 1000 05-07-09 Deposited in Bank 3 C 1000

09
05-07- Admission Fee at 5 2 450

09 the rate of Rs.30 x
15 members
= Rs. 450
05-07-09 Printing & stationary 4 5 50
(Seal prepare)
Total Exp 1200 Nil

Closing Balance 900 1000
Cash
Grand Total 2100 1000 Grand Total 2100 1000
52
Cash Book
3 3
For the month of AUGUST 2009
RECEIPTS PAYMENTS
Date Particulars Receipt L.F Cash Bank Date Particulars Voucher L.F Cash Bank
No. No.
12-08- Opening Balance 900 1000
09
12-08- Members saving 6 3 150 12-08-09 Loan sanctioned (To 5 6 800

09 Mrs Z for purchase of
cow)
12-08- Donation (from 7 4 1000 12-08-09 Loan sanctioned (To 6 7 800

09 Mrs. Z - Cheque Mrs W. for purchase
No. 65653) of cow)
12-08- Cash withdrawal C 1000 12-08-09 Cash withdrawal from C 1000

09 from Bank Bank
Total Exp 1600 1000

Closing Balance 450 1000
Cash
Grand Total 2050 2000 Grand Total 2050 2000
53
VI. General Ledger – General ledger is important to know the head wise expenditure as and when required to
control cost and to find out deviation of estimate to take necessary corrective measures. The ledger information /
transaction posted from primary book call Cash Book and also Journal Register. Only the contra entries i.e. group
cash amount transferred and deposited in bank or amount withdrawn from cash amount and taken in cash are not
posted in ledger. The journal /adjustment entries are not recorded in Cash Book and so it is posted in ledger from
Journal Register. Sample format are given:
1 2
Ledger : Group Social Work Contribution Ledger : Admission Fees
Date Particulars CBF Debit Credit Balance Date Particulars CBF Debit Credit Balance
No. No.
28.6.09 1 1000 1000 5.7.09 2 450 450
(Cr) (Cr)
54
3 4
Ledger : Members Saving Ledger : Donation
No. No.
28.6.09 1 150 28.6.09 Mr. X 1 500
5.7.09 2 150 12.8.09 Mr. Y 3 1000 1500
(Cr)
12.8.09 3 150 450 (Cr)
55
5 6
Ledger : Printing & Stationery Ledger : Loan to Mrs Z
No. No.
28.6.09 Office seal 1 150 12.8.09 3 800 800
(Dr)
5.7.09 Register 2 150
5.7.09 Round Seal 2 50 350 (Dr)
56
7 8
Ledger : Loan to Mrs. W Ledger : ________________
No. No.
12.8.09 3 800 800 (Dr)
57
VII. Labour Payment Register – Whenever members take up group labour activities they should maintain labour
register. The format should include labour attendance, contribution (if any) payment with proper receivers signature.
The expenditure should properly record in Cashbook also.
Component/Work :-_________________________
Sl.No Members’ Sex Month…………………………… No. of Labour Total Community Net Receivers
Name (Male/ total rate Labour Contribution amount Signature
P = Present, A = Absent
Female) days per Charge (at the rate paid
worked day ___%)
Total
Cash Book Page No.
Voucher Number
58
VIII. Bank Pass Book – The group should maintain bank pass book for recording
fund balance and reconciliation of and transaction with Cash Book. There will be
credit of fund with bank interest and debit with bank charges, which should be
verified and reflected in Cash Book.
IX. Individual Pass Book – The members have to be maintain individual pass book
to keep track of individual members savings record. In this book, loan information is
also recorded for individual members’ information to keep record.
Individual Saving Pass Book
Date Saving in Rs. Withdrawal in Balance in Secretary

Rs. Rs. Signature
59
(b) Loan Record
Date Loan Interest Loan Loan Members’ Secretaries’

Issued on loan Repaid Balance Signature Signature
60
X. Asset Register – The group have to be maintain an Asset Register when they
have innumerable number of asset. All the assets have to be marked with
identification number and it have to be recorded in register along with other
information such as date of purchase, cost price, location/issued to etc. The same
asset should use only for group work and stored in proper place to make available at
the time of requirement. Sample format given below.
Asset Particulars Model No/ Unit Purchase Cost Issued to Remarks

code/ serial No Date Price
ID No
(ID (Which firm ( Incase of (Number (Allotted to (Condition

number supplied, machine serial of unit) whom/which of asset and
marked challan no, number given staff) any other
by the bill no and by important
group) date) manufacturer) information)
XII. Stock Register:- All the consumable items received / purchased have to be
recorded in stock register at the time of receipt and issue to avoid mis-utilization.
The stock register has to be properly index with contents and different pages for
different item. Sample format are given below.
Stock register
Name of item _________________
Date Description Received Issued Balance Receivers’ Stock in

Signature charge
signature
(to record challan no
for receipt and
requisition details
for issue)
61
XIII. Audit File: The group should maintain audit file and necessary action must be
taken on audit observations. The audit reports are the credibility report of the group
evaluated by external agencies which outside agencies believed on. It is also a
report of the financial status of the group as well as the capacity of the group to
handle fund.
XIV: Money Receipt – The group must issue money receipt for all financial receipt.
The Receipt Book should have provision for duplicate (Carbon) copy and not counter
folio system. The duplicate copy should be with the group in the receipt book will
help in cross verification of receipt of money and chances of manipulation will be
less. Fund received, as per money receipt book should reflect in Cash Book so that
temporary use of group fund for personal use, if any can be detected and stop.
XV: Transparency and Accountability
The group should know how to account all the community resource (financial and
non-financial) and importance of transparency in the group to build trust among
members.
XIV. Maintenance of Monitoring Records – The group has to be maintaining

monitoring report file to know the overall progress of the group and take corrective
step within the time.
Module 3 – Performance Assessment / Grading of SHG:
Self Help Group assessment has to be carried out after completing six months. This
grading assessment is to be conducted on a regular basis. Group performance
assessment /grading should be done accordingly by fulfilling the following pre-
conditions:
 Books and records should be checked before the performance

assessment /Grading start.
 Regular saving has to be established.
 Internal lending has started.
62
 Completion of at least two training modules.
 Group should be six months old and above from the inception.
 Performance assessment /Grading result should be made known to the

group.
 Time, date, place should be fixed with group before conducting the
Performance assessment /Grading of the Group.
Criteria to conduct the Performance assessment / Grading of SHG as follows:-
SELF HELP GROUP (SHG) ASSESSMENT (Format):
Name of Habitation/Project Village

SHG
District Block: Project Cluster:
Date of Inception Size of the

(dd/mm/yy) group
Schedule of SHG Saving Bank

Meetings: Account No
Name of the Bank & Branch:
Total Group corpus Total SHG saving

(including all sources). Rs. (both group & Rs.
individual level saving)
S.N. INDICATORS MARKS MARKS
(Encircle the response and put the marks ALLOTED SCORED
accordingly)
I. FINANCIAL INDICATOR
1. Financial Transactions in the Group (During the last Out of 8
one year
63
a) All fund collections from members, financial decisions 8
and disbursements of loans to members are made in the
group meetings
b) All fund collections from members, financial decisions 6
are made in the meetings but loans are disbursed
outside group meetings
c) Fund collections from members are made outside 5
meetings but loan decisions are taken during the
meetings
d) Both fund collections from members and financial 0
decisions are taken outside the meetings
2. Member Awareness about all Financial Transactions Out of 8
a) All members are aware about all financial transactions 8
b) Above 75% of the members are aware about all financial 6
transactions
c) Less than 50% of the members are aware about all 4
financial transactions
d) None are aware about all financial transactions 0
3. Regularity of Savings (During the last one year Out of 8
a) 100% on time payments of savings by members 8
b) 90% on time payments of savings by members 6
c) 70% - 90% on time payments of savings by members 3
d) Less than 70% on time payments of savings by 1
members
4. Pattern of Internal Lending Out of 8
a) Need based loans availed by many members 8
b) Need based loans availed by few members 6
c) Equal distribution of loans among all members 3
d) Loans extended repeatedly to only a few members in the 0
group
64
5. Loan Frequency: Number of loans taken by the
members. (Older groups – 2 and above years)
a) 100% members taken loans more than two
times a year - 8
b) More than 80 % member taken loans at least
once a year - 4
c) Less than 60 % members taken loan
-2
a) Over 2 times 4
b) Over 1.5 times 3
c) Between 1 – 1.5 times 2
d) Less than 1 time 1
6. Repayment Terms Prescribed Out of 4
a) Monthly installment /repayment 4
b) Quarterly installment/repayment 3
c) Lump sum payment / repayment 2
7. Repayment pattern Out of 8
a) Regular repayment of principal and interest in full or 8
monthly basis
b) Regular repayment of principal in part and interest in full 4
on monthly basis
c) Regular repayment of only interest in full on monthly 1
basis
d) Repayment at the end of loan period 1
8. Percentage of Repayment Out of 8
a) 100% with no over due 8
b) 90 – 99% with rescheduling 4
c) 85 – 89 % with rescheduling 2
d) Less than 85 % with rescheduling 0
9. Borrower quality (no. of defaulting members) Out of 8
a) Less than two members 8
b) Between 2-5 members 4
65
c) More than 5 members 0
10. Up to date maintenance of records Out of 10
a) Adherence to the group’s by laws 1
b) Attendance at the meeting 1
c) Financial decisions taken at the meetings 2
d) Savings collection 2
e) Loans disbursements 1
f) Repayments 1
g) Member – wise savings and loan portfolio 2
11 GROUP’S SOURCES OF FUND (1 & above years old Out of 8
group)
a) More than Four sources of fund (Bank, Govt. Group 8
IGA, Group’ Savings, etc.)
b) More than Two sources of fund 4
c) Group’s saving is the only source of saving 2
d) No increment in monthly savings over the year 0
II ORGANISATIONAL INDICATOR
1 Feeling of belongingness / homogeneity / solidarity Out of 4
(observed during group interaction
a) Very strong 4
b) Moderate 2
c) Not very much 1
2 Governance issues (additive value) Out of 6
a) Awareness about objectiveness of self help groups 2
programme
b) Awareness about rules and regulations of group 1
functioning
c) Leader responsibility sharing by group members 2
d) Awareness about member wise saving and loan position 1
3 Conduct of meeting (during last one year Out of 8
a) Meeting are held regularly as per fixed date, time & 8
place
66
b) Meeting are held regularly once a month but at the 6
convenience of all members
c) Meetings are not held regularly but they are conducted 4
as per fixed date, time and place
d) Meetings are irregular 2
4 Attendance of members in the meetings (during the Out of 8
last one year
a) Above 90% in all group meetings 8
b) 70 % -90% in all group meetings 6
c) 50 % - 70 % in all group meetings 4
d) Less than 50 % in all group meetings 0
5 Participation of members Out of 4
in group proceedings
a) Active by majority 4
b) Moderate 2
c) Domination by few noticed 0
6 Annual action plan for the SHG (e.g.: increasing Out of 4
saving, accessing to bank finance, livestock
vaccination, seed supplies, use of new cultivation
technique, social and community activities etc)
a) Yes, finalized 4
b) Under preparation, being finalized 2
c) Not yet prepared 0
7 Change of office bearers Out of 4
a) All new 4
b) Some new, some repeated in other post 2
c) All repeated in other post 0
III SOCIAL INDICATOR
1 Social activities taken up by SHG (e.g.: enrolling Out of 8
school dropouts, support to orphans, old persons,
handling alcohol & drug addiction etc)
a) Four or more (pl specify) 8
b) Two or three (pl specify) 4
67
c) One or two (pl specify) 1
d) None so far 0
2 Community activities taken up by SHG (e.g.: road, Out of 8
school building, community hall cleaning etc)
a) Four or more (pl specify) 8
b) Two or three (pl specify) 4
c) One or two (pl specify) 1
d) None so far 0
IV/V GRADING/ASSESSING OFFICER’S OBSERVATIONS Out of 8
(For 1 & above year old group)
 Group is keen about increasing their corpus fund 1
(Group/members have taken up diverse activities,
linkages, etc.)
1
 Gradual increase in the number of entrepreneurs in
the group 1
 Improvement in group’s assets 1
 More members attend Public meetings. 1
 The women leaders’ voices are heard in the 1

traditional authority system. 1
 Village authority/Government entrusting the group to 1
take up Programmes
 Members are capable in solving conflicts in the
group and outside
 Increased numbers of leaders in the group over the
year
 Influencing village/s, local government (VDCs/PRIs,
BDO, MLAs/Ministers, etc. )
TOTAL MARKS FOR ALL 20 QUESTIONS 146
68
OVER ALL OBSERVATIONS AND COMMENTS
 The Assessment criteria seems ok, provided it is carried out properly –

which is TIME CONSUMING
The Groups need to be Assessed vis-à-vis their By-laws. All groups

need to have their By-laws written in separate sheet of paper/booklet –
the Rating agents should be able to see that there are
modifications/refinement of by-laws as per the need of the group
members as they become mature.
Calculation of Percentage:
Total group Score Mark X 100 / 146 = Percentage (%)
e.g. 90 X 100 / 146 = 61.64 (approximately) = 62
(Total group score mark X (multiple by) 100 / (Divided) 146 (Total Marks)
To identify the Grade
A Grade = 70 % and above
B Grade = 60% and above
C Grade = 50% and above
D Grade = 50% and below
69
Module 4 – Linkage
Once the group performance assessment / grading score reach 50% and above, it is
advisable to initiate for direct linkage with the Financial Institution.
Forms for application of loan may differ from bank to bank depending on the
financial institution where the SHG’s are maintaining a saving account.
(Sample format of State Bank of India for Inter Se Agreement, Loan application form,
sponsorship letter, financial statement of group, etc is given below)
Inter Se Agreement Letter
This Inter Se Agreement Letter is a critical document where all the members are
involve in the decision making process of the group interests and activities. It gives
all the names of the SHG Group members coupled with their relationship and age.
This document also specify the intention of the SHG Group which is most primarily
to carry on the credit and thrift together with the economic activities mean for mutual
benefit of all group members. It adopted a number of rules and regulations for
governing the SHG Group smoothly in a scientific manner and systematic
organization that are mutually agree upon by all the SHG members. An example of
the Inter Se Agreement is given below:
INTER SE AGREEMENT
This Agreement made at ___________________________________ on this

___________________ day of ____________________ 20________ between
1. Shri/Smt/Kum__________________________________________________
Son/Wife/Daughter of _____________________________ aged ____ years.
2. Shri/Smt/Kum__________________________________________________
70
3. Shri/Smt/Kum__________________________________________________
4. Shri/Smt/Kum__________________________________________________
5. Shri/Smt/Kum__________________________________________________
6. Shri/Smt/Kum__________________________________________________
7. Shri/Smt/Kum__________________________________________________
8. Shri/Smt/Kum__________________________________________________
9. Shri/Smt/Kum__________________________________________________
10. Shri/Smt/Kum__________________________________________________
71
11. Shri/Smt/Kum__________________________________________________
12. Shri/Smt/Kum__________________________________________________
13. Shri/Smt/Kum__________________________________________________
14. Shri/Smt/Kum__________________________________________________
15. Shri/Smt/Kum__________________________________________________
16. Shri/Smt/Kum__________________________________________________
17. Shri/Smt/Kum__________________________________________________
18. Shri/Smt/Kum__________________________________________________
72
19. Shri/Smt/Kum__________________________________________________
20. Shri/Smt/Kum__________________________________________________
Who are members of the ____________________________________________

group. Hereinafter referred to collectively as _______________________Self Help
Group or SHG Members in short, which expression shall, unless repugnant to the
context or meaning include every member of the said SHG with intent to carry on
savings and credit and other economic activities for mutual benefit subject to the
terms and condition hereinafter appearing.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT
1. Each member of the SHG shall save a sum of Rs ___________________

(Rupees ________________________________________________ only) or
such sum as may be decided by the group by general consensus from time
on weekly/fortnightly/monthly basis which shall be deposited with the
authorized member of the group.
2. Each member shall strive for the success of the SHG and shall not act in any
manner detrimental to the business interests of the SHG.
3. The SHG members shall be jointly and severally liable for all the debts
contracted by the SHG.
4. All assets and goods acquired by the SHG shall be in the joint ownership of
all the members of the SHG and shall ordinarily be in the constructive custody
of such member as may be authorized by the group.
73
5. The SHG members hereby duly elect and appoint
Shri/Smt/Kum ________________________ as ______________________
Shri/Smt/Kum ________________________ as ______________________
Shri/Smt/Kum ________________________ as ______________________
Hereinafter called as authorized representatives to look after and manage the

day-to-day affairs of the SHG’s activities and also act in their name and on
their behalf in all matters relating thereto. The authorized representatives
may, however, be changed at any time by majority vote of the members and
new representatives elected in keeping with the management practices of the
SHG.
6. Each of the SHG Members hereby agrees to abide and ratify all such act,
deeds and things as the authorized representative may do in the interest of
the group.
7. The authorized representatives shall take decisions in the day working of the
SHG and each representative shall actively involve herself or himself and co-
operate in looking after the day-to-day affairs of the SHG activity, in particular
to attend to the following activities that are delegated to them.
8. The SHG members hereby specifically authorize the representatives:
a) To keep or cause to be kept, proper books of accounts of the savings

made by the SHG members, financial assistance/loans granted to them
and the recoveries made from them and render every year full accounts to
the SHG members for their approval and adoption.
b) To receive all payment due to the SHG and issue requisite receipts or
acknowledgements for and on behalf of the SHG.
c) To institute and defend on behalf of the SHG Members any legal

proceedings and safeguard the interests of each member of the said SHG
and for this purpose engage or disengage any lawyer or advocate or
agent and incur the necessary legal expenses in connection therewith.
74
9. The SHG members hereby specifically authorize the above authorized
representatives to open savings bank account, fixed deposits and other
account in ______________________________ Bank and operate the same
under the joint signature of any two of the above authorized for this purpose.
Shri/Smt/Kum _____________________________________
Shri/Smt/Kum ____________________________________
Shri/Smt/Kum ____________________________________
10. Every member of the SHG hereby authorizes the representatives to:
a) Apply for financial assistance from Federation/Apex Federation on behalf

of the SHG and execute necessary agreements/documents and valid
acknowledgement of debts/liability on behalf of the SHG for the purpose.
b) Collect financial assistance amounts from Federation/Apex Federation on

behalf of the SHG deposit the same in the savings account of the SHG for
on lending to members in accordance with the decision of the SHG and
c) Repay installments of SHG towards the settlement of financial assistance

account of SHG with Federation/Apex Federation.
11. In the event of death of any of the members of the SHG, his/legal heirs shall
be entitled for the benefits and be liable for the obligations of the deceased
member under this agreement.
12. It is agreed that no new person shall be included as a member of the SHG
without consent of all the existing members.
75
IN WITNESS WHEREOF the aforesaid members of the SHG have set their
respective hands hereunto at ________________________________ (place)
on the ____________________ (day) of ______________ (month)
__________ (year).
Sl. No Name of the member of SHG Signature/Thumb Impression

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
76
1) Loan Application Form
To get any financial assistance from Apex SHG Federation or any other financial
institutions an SHG has to apply in the Loan Application Form. The detail information
of the SHG Group has to be specified in the Loan Application Form such as date,
address of the financial institution, etc. In the Loan Application Form the particular
SHG who apply for financial assistance should mention their correct SHG name,
Reference of Federation/Association, loan purposes and full address. The Bank
Account signatories or authorized representatives with names and designation
should be properly mentioned. The total number of group members both at the
commencement and current / present members should also be highlighted. Whether
the SHG group is male or female group should be given in the Loan Application
Form. It is always better to give the saving history of the SHG group particularly the
current total savings amount and regular savings per member of the group. The
SHG group number of loan given and amount loan disbursed, outstanding amount
due as on date of loan application and repayment period need to be mentioned
appropriate in the application form. This would help better to understand the credit or
financial discipline of the SHG group. The amount of loan applied and the purpose
for which the SHG has apply for loan, installment period and number of installments
and final repayment date must properly indicated in the application form. Finally, a
copy of the resolution to borrow loan by all members of the SHG group must be
enclosed or attached along with the Loan Application Form. At the end of the Loan
Application Form the names, signature and full designation along with Group Seal,
place and date of authorized group representatives must be mentioned correctly for
verification. An example of Loan Application Form is given below:
77
LOAN APPLICATION FORM
Date ______________________ For Office use only
Regn No. __________________________

To: Loan Appl No. ______________________
F.A. __________________________
President/Secretary/Credit Manager
Repeat Group: Yes / No
_______________ Apex SHG Federation
West Garo Hill District, Meghalaya
Dear Sir/Madam,
We, ________________________________________________ (Name of SHG),

hereby apply for financial assistance for further extending loans to members of our
Self Help Group. We furnish below the necessary particulars.
I. PARTICULARS OF GROUP AND FINANCIAL EXPERIENCES
1. Name of the group/member : _________________________________
2. Group Code : _________________________________
3. Ref. By Fed/Asso. Code : _________________________________
4. Product Code : _________________________________
5. Loan Purpose : _________________________________
6. Full Address _____________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
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7. Bank Account Signatories
a) Mrs/Ms/Mr ______________________________ __________________
(Name) (Designation)
b) Mrs/Ms/Mr ______________________________ __________________
c) Mrs/Ms/Mr ______________________________ __________________
8. Total No. of members at the commencement of the group (State the year of
formation____________) is:__________; Female: _______ Male: _______
Total No. of members at present is: _______; Female: ______ Male: _______
9. Saving history of Group for the period ___________ to __________ (Date/

Month/ Year)
No. of members No. of Months Total group Avg. monthly saving

in the Group Savings per member
10. Receipts & payments a/c for the period _____ to _____ (For 6 months and
above old groups only)
Receipts Rs. Payments Rs.
Opening balance – Loans given

cash
Opening balance – SHG expenditure – revenue

bank
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Savings of members SHG expenditure – capital
Membership fees Repayments of loans taken

by SHG
Fines Interest repayments on

taken loans by SHG
Bank interest Savings withdrawn by

members
Loan interest Other uses
Loan recoveries Closing balance –cash
Loans taken by SHG Closing balance - bank
Grants received
Other sources
Total
Note: Attached Annex Audited Financial Report for last 1 to 3 years
11. Particulars of loans currently outstanding from Group’s Corpus fund.
No. of loans Amount Outstanding Repayment Repayment

Disbursed of Loan Amt. as on Amount
disbursed dt. _______ Rs.
W M Q Y
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12. Internal lending and recovery of the Group for the period _________ to
___________
No of Members No of Loans Loan Amt. Loan Amt. Average Overdue

Received Loans Disbursed Disbursed Recovered Monthly as on
Rs. Rs. Recovery Rs. Date.
13. List of all agencies from whom Grant/Loan was received
Name of the Agency Loan Grant Amt received Date of Receipt
Sub-Total
Grand Total
14. Particulars of loans currently disbursed & outstanding to members from

outside agencies. Name of the Agency……………………………………………..
Source of Loan Date Amount of Outstanding Repayment Repayment

Loan Loan Amt as on Monthly / Amount Rs.
Disbursed Date Periodicity
15. SHG Loan performance.
Loan No of No of Loan Amt. Loan Amt. Avg. Overdue as

Date Members Loans Disbursed Recovered Monthly on Date
- Received Disbursed Rs. Rs. Recovery
Loan Rs.
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II FINANCIAL ASSISTANCE APPLIED FOR:
Loan Purpose ______________________________________________________
Rupees ________________________________________ Rs._______________
III REPAYMENT
We hereby undertake to repay the Financial Assistance as follows:
Equated monthly / quarterly/ half yearly / annually or irregular installments as

scheduled below.
Installment amount: Rs. ______________________________________________
No. of Installments: _______________________________________________
Final Repayment date: _______________________________________________
IV A copy of the resolution to borrow executed by all the members of the group
authorizing us inter-alia to borrow on behalf of the group is enclosed.
V DECLARATION
We hereby declare that the particulars given above are true and correct to the best
of our knowledge and belief.
We hereby, authorize the Federation/Apex Federation, hereinafter called (Name of

the Federation/Apex Federation), to disclose all or any particulars of details or
information relating to our Financial Assistance A/c with (Name of the
Federation/Apex Federation) to pay other Financial Institutions / Government
Departments or any other Agency (i.e.) as may be considered necessary or
desirable by (Name of the Federation/Apex Federation).
(Name of the Federation/Apex Federation) may disqualify us from receiving any

credit facilities in case it is proved that the declarations of our outside borrowing
made above contain misrepresentation of facts.
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We hereby declare that we have no borrowings from any other Agency on the date
of application, for the same purpose, other than what has been indicated above.
We undertake not to borrow from any other Agency without the permission of (Name
of the Federation/Apex Federation).
We hereby undertake to pay at the time of the first disbursal of the Financial
Assistance, service charges equivalent to ________% of the total Financial
Assistants amount calculated for every year or part thereof over which Financial
Assistance installment repayments are speared/ scheduled.
Applicants (Authorised Representatives)
Name Signature Full Designation
1. ____________________ ________________ __________________
2. ____________________ ________________ __________________
3. ____________________ ________________ __________________
Place: ________________ (Group Seal Across all the three Signatures)
Date: ________________
83
Module 5 – Entrepreneurship Development Training
Setting up of a business (trading/production unit/) and generating employment (self

and or others) in a sustainable manner.
Setting up of an enterprise involves deployment of means of production (man,

material and capital) and undertaking risk with an aim to make profit.
i) Survey availability of local resources and skill availability
ii) Survey of the IGA in the village
iii) Identify entrepreneurs
iv) Setting of enterprise
v) Identify local needs
vi) Training on specific enterprise, such as
a. Agriculture: Seasonal vegetables/home garden, arecanut/tea

nursery,
b. Horticulture: floriculture, pineapple, cashew nut, passion fruit,

banana, etc.
c. Animal Husbandry: fishery, poultry, duckery, piggery, dairy, etc.
84
d. Non farm Enterprise: Handloom and handicraft, weaving, tailoring,
grocery unit, bakery unit, spice grinding-cum-rice mill, food
processing, vegetable vendors, etc.
Marketing and Value Addition
i) Basic Conceptual clarity on Collective marketing, market

information and pricing.
ii) Training on pricing – Local and outside markets.
Collective Marketing:
What is collective marketing?
It’s the system of marketing of products (mostly rural produces) through a single
window operated by a community owned group functioning in democratic principle
for better realization of value.
Why Collective Marketing?
a) Risks and benefits are shared
b) Sufficient marketable volume can be built up
c) Can target a bigger market/buyer/higher level resulting in enhanced profit.
d) The transportation cost and marketing costs can be minimized resulting in

higher profit
e) Better negotiating power and more empowerment of community.
f) Scope for better quality control.
g) More capital accumulation through collective contribution
h) Division of labour.
i) Can use a common brand name for identity and market preference.
85
Collective marketing Approach
a) Formation of Specialized marketing committee.
b) Mapping the marketable surpluses.
c) Orientation of the CBO (concept sharing, capacity building, Financial linkage,

business planning).
d) Necessary infrastructure (collection points, quality check, weighing, logistics,

storage godown, drying/washing etc as per need).
e) Market linkage (Market search, negotiation, linkages)
f) Profit sharing.
g) Planning for the next produce/season.
SHGs need to be Federate at the cluster level and the district level for
marketing point of view:
a) To built up marketable volume
b) To enhance negotiation power
c) Better realization of value
d) Market access to both small farmer and big farmer
e) More financial power and better financial linkage.
f) Better access to services from government and other agencies.
Marketing Information:
To collect Information about the market place, the marketing channel, the price, the
products and their varieties in demand, the competitors, the dynamics of taste and
preference of customers etc.
86
Importance of Market information:
Without market information one cannot plan production, processing or marketing.
How to collect market information:
Market survey/research, Consumer survey, market scanning, Historical data

collection, secondary data, collection of information about competitors, Channel
member interview or interaction, News papers/magazines, internet and other
electronic medium including telephone.
Documentation of market information:
Market information should be properly documented and preserved for present and
future use. Use of graphical/ pictorial /tabular representation can be more useful.
Take care to prioritize the database. Analysis of data and interpretation should be
properly recorded for strategizing and justifying actions.
How to use market information:
The market information has to be analysed and interpreted for marketing decision
making. Historical data is to be used for forecasting and production planning.
Pricing:
Pricing means fixing the price of commodity for the buyer (customer/consumer).
How are prices fixed?
Cost based, Market based, Quality based, Premium pricing (through niche
marketing).
Importance of pricing strategy:
Pricing is important for realizing profit and growth of enterprise, for creating demand,
customer satisfaction and preference, to create a market image and compete in the
market.
87
Value Chain Analysis/Development
1) Value chain analysis constitutes an economic system organized around a

particular commercial product.
What is it?
It is a tool to know what are the input/s (material/techniques/technology/

methodology) left behind to get the maximum benefit/profit for particular
commercial enterprise.
2) Explain value chain concept and benefit
a) Value Chain Analysis why –
- model and situational analysis
- understand functions, bottlenecks, failure & opportunities
- tool to develop a joint vision, objectives & strategy
- tool to monitor impact
- facilitate business decisions
Why value chain analysis?
- It analyze a situation
- It gives a clear picture what are the steps not done/not fulfilled
- It says about other opportunities for particular field
- It says about the missing link/gaps
- It says about the strategy/procedure/future role of development
- It clearly says the bottleneck of outmost development.
- It will collect/invite all possible options to accomplish the task and will
select the most suitable/productive ones.
- It will enable one for quick & assured results
88
b) Guiding rule
- Identification of stakeholders/ value chain actors and their respective socio-
economic characteristics
- Mapping of value chains
- Value addition at producer & trader level
- Illustration of mark-ups and profit
- Identification and evaluation of sources of information
- Identification and evaluation of business/financial support (satisfaction)
How to go about for value chain analysis?
- It is a TEAM effort and all the team member has to contribute for the process.
- If some gap is found in the process that has to fulfill( most important)
- What may be alternative way to accomplish the work need to analyze
- People’s acceptability and economic profitability are key factor for analysis
Process of Value Chain Analysis: Example Wet rice cultivation (WRC)
1. The first and foremost requirement of VCA is the person/s who is doing VCA
has to be very much familiarized to the community/farmers/target groups so
as to capture the real picture of the actual situation.
2. Ask the farmers how they usually do WRC and list them
3. What may be the alternative way of doing the same work( both from farmers
& Interviewers view)
4. What may be the possible interventions that will increase production & quality
profitability of the farmers ( List & Suggest)
5. Credit requirement/ analyze & suggest
6. After plantation and management, analyze & suggest
89
7. Harvesting/post harvest management/value addition opportunity has to
analyze and suggest.
8. Selling at right time/farm/businessman for maximization of profit.
9. After all this analysis the best possible inputs need to list in collaboration with
the farmers that will give him the maximum profit with least investment.
c) Basis of Sub-sector selection
Business Development:
1. Product Development
The development of any product takes time and effort as well as an

understanding of the target market and how the product can appeal to the target
market. For product development it should consider different elements of the
organization to understand the way in which products can be developed to satisfy
the market.
The problem and solution
• The importance of segmentation
• Product development process
• Monitoring and controlling
2. Product Pricing
The product price depend on different factors like market demand and supply,
cost of production etc.
Pricing of product :
• Demand and Supply interaction major influencer in price
• Price varies on daily/seasonal/annual basis
• High demand---low supply: high price
• Low demand---high supply: low price
• Low price leads to high sales volume (for price elastic products)
• High price leads to low sales volume (for price elastic products)
How to price your commodity – other factors

• Going market price: As per the market price (needs market scanning and
selection).
• Cost leadership pricing: As a low cost supplier (for competitive
advantage).
• Premium pricing: Usually based on premium quality/uniqueness of the
product (But before everything, you need to know your own cost).
90
Calculation of Cost – How Cost of Production affect price:
• Labour cost
• Material Cost
• Processing cost
• Overheads (administrative/services)
• Packaging
• Storage
• Cost of Transportation: Labour, Freight, Taxes
• Cost of Selling/marketing:
• Administrative
• Warehousing
• Documentation
• Cost of wastage/loss of value/loss of weight: Depends upon the
commodity
Quantity purchased by consumer effected by:

• Price of goods
• Taste and preference
• Number of consumer
• Income
• Price of competing goods
• Change in taste, attitude of the customer over time
Calculation of Price
• Total Cost
• Add : Desired profit
• Add : Margin to Intermediaries
(Stockiest, Wholesaler, Retailer as the case may be)
• Add : Taxes if applicable:
• Resulted MRP / Price of product
3. Product life Cycle
Product life cycle (PLC) is the life of a product in the market with respect to
business/commercial costs and sales measures. To say that a product has a
life cycle is to assert four things: 1) that products have a limited life, 2) product
sales pass through distinct stages, each posing different challenges,
opportunities, and problems to the seller, 3) profits rise and fall at different
stages of product life cycle, and 4) products require different marketing,
financial, manufacturing, purchasing, and human resource strategies in each
life cycle stage.
91
Different stages of Product life cycle
 Product introduction stage

 Growth stage
 Mature stage
 Saturation or decline stage
Management of product on consideration to Product life cycle
4. SWOT Analysis
SWOT (Strengths, Weakness, Opportunities and Threats) analysis is the tool to

analyse the market situation. The SWOT analysis is the first step in putting together
a marketing plan or business plan for any product/business. The SWOT analysis can
be very subjective and so better to take caution also.
Strengths: what are the strengths of your product? What makes it better than other products? Are these
strengths being sufficiently exploited? Are they being sufficiently defended?
Weaknesses: what are the weaknesses of your product? What makes it inferior to other products? Are
there strategies you should be adopting to offset these weaknesses? Should you be removing these weaknesses
completely?
Opportunities: what external factors are there that could be embraced if appropriate resources were
allocated?
Threats: what external factors are there that threaten to reduce your market share?
Module 6 – Basic concept of Gender Mainstream
1. Definition: In our society, women are marginalized in most of the spheres.

Therefore they need to be given special attention. Gender mainstreaming is to bring
forth issues concerning the women. They need to be economically empowered, their
voice need to be heard in the decision making of the village bodies and at the same
time their well-being needs to be taken into account.
2. Components:
a. Sensitization
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(i). Domestic Violence:
SHGs needs to understand that violence is violence and therefore is a criminal

act.
It is not an internal matter of the family, but a social curse.
It incapacitates a woman; physically and mentally to be a productive member of

the society. SO, discuss the issues of domestic violence with the SHGs
members.
(ii). Laws pertaining to the rights of women
The SHGs has to educate itself and consequently educate its member on friendly
laws for the women. They need to network with the State Women’s’
Commission of their respective states as well as the National Women’s
Commission in Delhi. Contact the local lawyers women’s rights activist and
periodically call them to talk to the villagers.
(iii). Women’s participation & Decision-making
In every meeting at every level, SHG members has to see to it that women are
being vocal and that their voice is being heard.
Our Women are so forthcoming, that in spite of the hardships they do find it
important to attend the SHG meetings. But, most of the time they need to carry
their infants along.
93
The SHG will have to think of an arrangement whereby the infants are well looked
after by one of the members, by turn, while the women participate actively and also
without any worries.
Girl child –Giving equal opportunities, equal nourishment and equal treatment to the
girl child should be an important part in educating the society by the SHG members.
94
CHAPTER – 10
WHY SHGs should be Federated?
SHGs need to be FEDERATED at the cluster level based on the geographical

locations of 15 to 30 SHGs for stronger coalitions, linkages, collective ventures and
take up matters beyond individual units. The Federations have to be registered
under the State Society Registration Act thereby becoming legal entities.
SHG Federation will provide Credit requirement for the SHG to sustain long-
term interventions, especially in development activities.
The SHG Federation will provide the following services to the SHGs:
1. Micro Credit needs of the SHGs
2. Capacity Building (its own and that of the SHGs)
3. Enterprise development/Marketing (help build the network and information for

the group and individual women enterprises)
4. Health Care/ Women and Child welfare
5. Women Empowerment issues
6. Education
7. Gender Mainstreaming
8. Fund Management (its own and also train the SHGs on the same)
9. Monitoring and Evaluation of the activities of the SHGs
10. Organizational Management (its own and also help build the managerial skills of
the SHGs)
11. Formulation of Plan
12. Vision and Road Map charting
13. Coalition building with other Federations and Associations
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CHAPTER – I

NERCORMP is a livelihood and rural development project aimed to transform

“To improve the livelihoods of vulnerable groups in a sustainable manner

Therefore, one main objective was to perform a SUCCESSFUL

Sustaining long-term interventions, especially in development activities,

It is in this context that the NERCORMP facilitated the formation of SHGs

a) Definition/Meaning: Self-help groups are small group structures formed

i) Homogeneous group: Are group of people with similar characteristics, caste,

iii) Geographical proximity: Preferable people from the same village.

PROCESS FOR FORMATION OF SHG

Group Formation Group

I. Community Mobilization and Sensitization

i) Selection of village should be need based.

v) Venue should be located at a location that could be relatively easy

vii) Ample time should be given for conducting the meeting.

viii) Meeting should be chaired most preferably by the Village Headman.

ix) Explanation should be to the point, precise, and clear.

x) The importance of having SHGs should be explained.

xi) Meeting should be interactive and inclusive.

xii) Elicit suggestions/ comments from the communities.

Steps for Conducting PRA Exercise

c. Rangoli Powder (four to five colours)

e. Pencil & eraser

g. Local material such as stones, green leaves, bamboo, etc.

ii) To obtain permission from the village headman/chief to conduct PRA.

iv) PRA Exercise start

ix) Resources (Inflow/Outflow):

Inflow Approx. Qty./Nos. Outflow Approx. Qty/ Nos.

(a) Identification Characteristics of SHG Members:

i. Sorting out the members (ideal 15-20 members, purely on

ii. Fine tuning of members (Grouping and Regrouping of

iv. Election of the office bearers (President, Secretary, Treasurer

v. Participatory – All the members should interact and work

vi. Accommodative – Willing to take any suggestion from any

vii. Timely address issues raised by the members

viii. Formulation of Rules & Regulations

i) Basic concepts (What is a Group?)

ii) What is Affinity Group?

iii) Concept of SHG.

iv) Structure of SHG

v) Why SHG for alternate model of development?

vi) What kind of membership an SHG should have?

 To be able to lend small amount of money to service daily needs such

 SHGs can provide timely credit/loans to its members.

 SHGs impose affordable rate of interest. e.g. 1-2% per month.

 SHGs can avail credit from any commercial banks.

ix) Aims and objectives of the SHG

xi) Rules and Regulations

xii) How to conduct meeting (Proceedings, agenda, recording of minutes

Planning involves the following.

 What work/activity do we want to do? And why?

 When do we need to finish it?

 How will we do it?

 What resources do we need?

 Who will do what work?

Resource mobilization involves:

xiv) Importance of book keeping

xv) Importance of Leadership rotation

xvi) SHG Grading

xvii) The importance of linkages with banks (Sustainability of SHG)

xviii) Credit plus Activities. (Insurance, Health Issues, Gender Issues,

Identification of Target people

Group will be formed based on the Wealth Ranking (WR) data