I just finished reading the book When Helping Hurts in December. One of the programs it promotes for village development is Savings and Loan associations.

So I was amazed when visiting India in February to find that one of our ministry partners is already providing training and mentoring for these types of groups.

Raymond calls the groups of village women who pool their savings to help each other “Sangams”  which is the Tamil word for “the place where rivers meet and combine”.

We were able to join a Sangam meeting one evening and I sat in a circle of 20 women who made up the membership. Many of them work in local match factories making about $1.50 per day. These women had committed to saving 50 rupees ( $1) per month as well as paying a Rs 15 per month subscription fee for education, outreach, and other group expenses.

They proudly showed me their books which documented attendance, savings, and loan activity for the last four years. Since 2006 these women have saved in excess of Rs 20,000 and have subsequently provided loans to members. The average loan is Rs 2,000 ( $40) and the maximum has been Rs 6,000 ( $120). During their monthly meetings the group decides together whether a loan request will be granted and also monitor the repayment of previous loans.

The largest loan they made was to renovate and expand a member’s roadside tea stand which is now very successful and providing good income for the owner. Last year one of the members attempted suicide and the group voted to provide a loan for her medical care. She recovered, paid off her loan and is now the president of this Sangam.

This group is bringing radical life change to impoverished women in Tamil Nadu. More than just providing credit, this program is first teaching women the value of self reliance through savings, a critical first step.