Access to credit
Access to Credit
MHDO implements access to credit programmes through two main strategies:the Pact Global Microfinance Fund’s (PGMF) methodologies and the Village Savings and Loan Association’s (VSLA) approach. These strategies mobilize clients by forming self-help groups (SHG), predominantly consisting of women, who collectively address issues of poverty, oppression, and gender-based discrimination. Credit and savings services are introduced to these groups after addressing their shared challenges.
Self-help Groups (SHG)
The SHG is not too large or too small and functions on a democratic basis. They practice both compulsory and voluntary savings, which are key components of their SHG activities. Only those SHGs that have performed well and sustained themselves are assisted with linkages with banks and other financial intermediaries like federations and clusters. As an NGO, MHDO acts as a catalyst and plays a role in social intermediation. It plans, builds capacity, and establishes linkages with donors and microfinance institution wholesalers.
The four main themes of the Microcredit Summit provide the conceptual premises:
- Reaching the poorest
- Reaching and empowering women
- Building financial self-sufficient in- institutions
- Ensuring a positive and measurable impact on the lives of clients and their families.