Self Help Group is a group of 10 or more people who want to improve their living conditions by setting up their own savings and loan fund.
The fund is owned by the group and consists of the savings of the members.
The fund is used to make short-term loans with interest to members.
The profit of the fund (i.e. the interest on loans plus fines) is divided to the members of the group at the end of the year.
The group comes together every week or once per month to collect savings and to give out loans.
The members of the group choose where the meetings are held.
The group meetings should be short around one hour and at a convenient time for everyone.
The participation of all the members in the meeting is important.
The attendance of all the members guarantees the correctness of the accounts and the success of the group.
The members of the group will elect five group leaders;
1. Chairperson
2. Vice chairperson
3. Secretary
4. Vice secretary
5. Treasurer
Responsibilities of Self Help Group Leaders
It is the responsibility of all members;
1. To deposit the same amount of savings every week or month.
2. To pay their loans plus interest back on time.
If the members cannot carry this responsibility, the group will not be successful. It is therefore important to select members who are reliable when forming the group.
The fund is owned by the group and consists of the savings of the members.
The fund is used to make short-term loans with interest to members.
The profit of the fund (i.e. the interest on loans plus fines) is divided to the members of the group at the end of the year.
The group comes together every week or once per month to collect savings and to give out loans.
The members of the group choose where the meetings are held.
The group meetings should be short around one hour and at a convenient time for everyone.
The participation of all the members in the meeting is important.
The attendance of all the members guarantees the correctness of the accounts and the success of the group.
The members of the group will elect five group leaders;
1. Chairperson
2. Vice chairperson
3. Secretary
4. Vice secretary
5. Treasurer
Responsibilities of Self Help Group Leaders
The group leaders are responsible for the savings and loan administration.
The group leaders maintain the;
The group leaders maintain the;
- Saving book in which the weekly or monthly savings of all members are written down and;
- A loan book in which the loans and loan repayments are written down.
It is the responsibility of all members;
1. To deposit the same amount of savings every week or month.
2. To pay their loans plus interest back on time.
If the members cannot carry this responsibility, the group will not be successful. It is therefore important to select members who are reliable when forming the group.
Self Help Group By Laws
The group will make some decisions, which will be written down in the group regulation (see sample of group by laws here), such as;
1) The amount of savings that all members will contribute every week or month (that is, in every group meeting)
2) The loan term
3) The interest rate on loans
4) The amount of fine for late repayment
5) The amount of fine for non-attendance without good reason
Emergency Loans
The group will make some decisions, which will be written down in the group regulation (see sample of group by laws here), such as;
1) The amount of savings that all members will contribute every week or month (that is, in every group meeting)
2) The loan term
3) The interest rate on loans
4) The amount of fine for late repayment
5) The amount of fine for non-attendance without good reason
Emergency Loans
The group will keep some cash at hand at all times for emergency loans.
Emergency loans are loans that can be given any day of the week to group members who have a sick person or an accident in the family, and need money urgently.
In most cases, emergency loans are free of interest but the need must be verifiable.
End of Year Meeting
Emergency loans are loans that can be given any day of the week to group members who have a sick person or an accident in the family, and need money urgently.
In most cases, emergency loans are free of interest but the need must be verifiable.
End of Year Meeting
At the end of the year, all of the loans need to be paid back.
During the last meeting of the year, the members will receive their part of the profit. They can jointly decide;
1. To keep the savings plus profit in the fund.
2. To keep the savings in the fund and take the profit home (recommended).
3. To take the savings and profit home and start again.
Example of a village based self-help group by laws
1) To be a member you must live in the village.
2) The group meets on Monday at 3pm at member’s residence.
3) The members deposit ksh200 per week.
4) The management committee is elected by ballot at the end of each year.
5) You must be a member and present at all weekly meetings to be able to request a loan.
6) The loan term is eight weeks.
7) The interest rate over eight week is 10% of the principal.
8) The fine on late repayment is 5% of the principal per week.
9) Members can apply for emergency loans in case of health problems, accidents or death in the family.
10) The interest rate on emergency loans is 0%.
11) The term of emergency loan is four weeks.
12) The fine on late repayment of emergency loans is 2% per week.
13) The fine for coming late to the meetings is ksh00.
14) The fine for unjustified absence is ksh200.
15) The fine for losing the member card is ksh300.
16) In case the member moves from the village, she will receive the amount of savings she has contributed plus her portion of the interest and fines the group has collected.
17) In case the member wants to give up her membership but stays in the village, she must wait until the group divides the profit at the end of the year.
18) In case of the death of a member, loans must be paid back by the deceased next of kin. All other amounts (savings and shares of interest and fines) will be paid to the next of kin.
During the last meeting of the year, the members will receive their part of the profit. They can jointly decide;
1. To keep the savings plus profit in the fund.
2. To keep the savings in the fund and take the profit home (recommended).
3. To take the savings and profit home and start again.
Example of a village based self-help group by laws
1) To be a member you must live in the village.
2) The group meets on Monday at 3pm at member’s residence.
3) The members deposit ksh200 per week.
4) The management committee is elected by ballot at the end of each year.
5) You must be a member and present at all weekly meetings to be able to request a loan.
6) The loan term is eight weeks.
7) The interest rate over eight week is 10% of the principal.
8) The fine on late repayment is 5% of the principal per week.
9) Members can apply for emergency loans in case of health problems, accidents or death in the family.
10) The interest rate on emergency loans is 0%.
11) The term of emergency loan is four weeks.
12) The fine on late repayment of emergency loans is 2% per week.
13) The fine for coming late to the meetings is ksh00.
14) The fine for unjustified absence is ksh200.
15) The fine for losing the member card is ksh300.
16) In case the member moves from the village, she will receive the amount of savings she has contributed plus her portion of the interest and fines the group has collected.
17) In case the member wants to give up her membership but stays in the village, she must wait until the group divides the profit at the end of the year.
18) In case of the death of a member, loans must be paid back by the deceased next of kin. All other amounts (savings and shares of interest and fines) will be paid to the next of kin.
