Role of NGOs in Credit and Savings

The Rural Development Trust(RDT)is a credit programme of Action Aid, India which carries out an irrigation development project in the district of Ananthapur in India.

The credit scheme was formed as part of a rural development programme in the target area which included a health programme and skills training programme in an organised system of groups of village associations.

The RDT as in the Grameen Bank Approach operates on a system of grouping. The main aim of organising the potential borrowers into groups was to ensure that such groups, known as ’Sanghams’ became active forums to address social and economic issues that affect the lives of the people in the area.

RDT has used the social pattern of grouping already existent in the target area in order to group potential beneficiaries.

The population in the district of Aanthapur is divided into groups according to the people’s castes. 17% of the population belong to what are known as the Schedules Castes and the Scheduled Tribes. The others are known as the Backward Castes. Each group, for the purpose of the credit scheme consists of people belonging to the same caste and membership in the groups of the Backward Castes is governed by each individual person’s level of poverty.

All financial transactions in the credit are done by project staff while the village groups or Sanghamscarry out the administrative activities. Staff and members interact only during loan disbursement and recovery and there is very little monitoring of the use of loans.