SHGs – important aspects :

Generally the number of members in a SHG is 10 to 20. In certain exceptional areas like, hills, deserts and areas with less population, and in case of economically weaker and/or physically disabled persons, the number of members may be 5 to 20. Only one member from a family can be the member of a SHG. The desirable requirement is that all the members of a SHG should belong to the families below the poverty line. The main objective of a SHG is to promote the common savings, hence all members need to contribute regularly to the common savings (corpus) of the group. No interest is payable to the members for the savings. The members should not be encouraged to adjust their savings amount against their loan due to the SHG. Every SHG needs to have a SB account (preferably with a bank in their service area). To open an account the SHG needs to pass a resolution in the group meeting and signed by all the members. A copy of the resolution should be submitted to the bank, while opening the bank account. Operations in Bank account: The SHG should authorize at least three members, any two of them, to jointly operate the bank account. The bank account should be in the name of the group and not in the names of individual members. The SHG should clearly decide the terms and conditions of the functioning of the SHG regarding lending to the members (viz., the interest, the loan amount, repayment period etc.)