How to Form a Micro-savings and Microcredit Group Micro credit has helped a lot of people escape the pangs of poverty. One of the easiest and most efficient ways to start a micro credit scheme is to get a number of between 10 and 15 people (especially women) together as a group. However, if you want to start a microsavings group but do not know the best and easiest way to start, this article will assist you to get it right at the first attempt.
Steps
1. 1 Visit the particular community and identify the community leader(s). These are the people who will ensure that the group has proper leadership and momentum.
2. 2 Try to understand the basic needs of the community. For example, an agrarian community will likely demand a longer tenured facility than an urban trading community.
3. 3 Pay a courtesy visit to the community leader and explain your mission. Also be prepared to address their reservations and answer their questions. Try to establish if people in the community have had any kind of relationship with a financial institution. Find out if they had borrowed before. If so, how did they repay? Did they consider it useful? Would they want to access loans of any kind - short term or long term? Knowing how they feel about loans and repayments is vital to your success.
4. 4 Explain your mission to the community. It is important to establish the usefulness of your offering, and help them to see clearly what it is that they will get from the group's formation.
5. 5 Identify the women leader(s), if any.
6. 6 Be prepared to ask the group members to pick a leader, if they have not already done so. Also encourage the group members to pick a secretary who will record their meeting proceedings, and a treasurer who will keep their finances and financial records.
o Encourage the group to pick a befitting name that will reflect what they do or what they want to achieve by coming together as a group o The group should also pick a symbol to reflect their coming together as a group.
7 Help set up the group's meetings. Encourage the group to have a few phrases to recite each meeting. For example: "We join hands to kick out poverty".
o The group should agree on a particular day and time to meet regularly. o The members should agree on how much to contribute at each meeting.
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Find a micro-finance institution where the accounts of the group, as well as individual members' accounts, will be opened. It is a good idea to have a financial professional and a lawyer deal with this aspect.
9 Find out what it will cost to register the group. Explain the benefits for the members of saving an amount of money regularly. Plan to train the members on the benefits of savings and accessing credit.
10 Teach the members how to keep their savings safe.
11 Explain to the group the reason why loans granted must be repaid and with interest.
Tips The symbol could be a picture of what they want to produce or their location. "Yam Tuber" or "Riverside" "Lakeside", and so forth. A name could also reflect what has brought them together, such as "Say No to Poverty Group". The amount to contribute should be very small, so as to enable the members to contribute without difficulty. Otherwise, the amount could be high to create an elitist group. Absence from meetings should not be allowed.
Warnings Do not create groups with same family members, for example, husband and wife or daughter or son or in-law. This risks family interests being put before the individual's and group's interests. Each group member must be able to state the reason for joining. About this wikiHow 108 views Updated 7 weeks ago 5 Co-authors
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