Finance for Development
Chirag promotes the formation of community-based institutions and supports their functioning in a variety of ways. Our efforts are concentrated on our 149 self-help groups (SHGs). In the Dewaldhar area the formation of SHGs has been boosted by our partnership with Aajeevika – a livelihood program that has been initiated by the government.
The main purpose of the self-help groups is to pool financial resources through small monthly contributions and serve as a support group for members. This encourages savings and helps the members become more financially independent. This is an important steps towards empowering farmers since the seasonality of income (agricultural season lasts for only 4-5 months) often binds them financially to their traders. The traders act as moneylenders during non-agricultural season or in the event of an emergency. Often these transactions include high interest rates or forward buying rates which severely constrains a farmer’s bargaining power. The self-help groups therefore create a supportive and positive environment where members can save money and take loans if needs be.
Part of our work is to help the SGHs connect with banks and governments departments. By attending their meetings or through discussions with members, we also help the SHGs monitor and evaluate their functioning and activities. Our long term goal is to boost financial inclusion and help the members gain access to credible banking, insurance and investment services. In addition, to encourage women to become more financially independent, our teams promote the Uttaranchal Sangharsh Mahila Sangh, a federation of exclusively women’s SHGs.