The SHGs have a two-pronged approach:

One: they form a microfinance group (I’m not sure if there’s a better word for this) where each member of the group contributes a certain amount every month. This forms the principal which they lend out to members of the group at a lower interest rate than banks. At the end of the financial year the interest collected on the loans is divided equally between the members of the group, but the principal remains untouched. This way, women don’t have to resort to money lenders if they need money to purchase a cow for instance, or to finance a wedding in the family

Two: they form a working group that brings in additional income. We met up with a group just outside Ranikhet where the women were involved in knitting sweaters and other woolens for sale in the Umang shop. Umang Mahila Samiti, the vast umbrella under which more than a hundred SHGs in the area come under, supplies these women with the wool. The finished products are handed back to Umang for sale and each woman is paid per piece, depending on the size and intricacy of the item. The profits collected from these sales are divided among the women depending on their contribution. Umang only keeps the overhead costs.

Both activities, though distinct, go hand in hand and each aids the other. We asked the women if they had any particular criteria for giving out a loan and they said no. Apparently, the only criterion you have to meet is to be a member of the group. This ensures that their default rate is nil. Very rarely, the leader of the group told us, they had had to increase the period of repayment.

We also asked the women whether the additional income gave them any independence at home. Some said that they were able to voice their opinion at home and now had a say in the household’s decisions. Other women quickly added that this of course, did not mean they did not listen to their husbands – they were anxious to let us know that male voice was still the most respected and the ultimate authority in the house.