Role of NGOs in Credit and Savings

The Rural Development trust (RDT)is a credit programme of Action Aid India which carried out an irrigation development project in the district of Ananthapur, 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 target population of the programme is small and marginal farmers, of which 11% are landless labourers. Many farmers own less than 5 acres of dryland and barely manage to earn an income even in a good rainfall year. The landless labourers were fomally bonded to landlords to whom they were indebted and this bonded labour has not ceased to exist.

The implementation and financial transactions of the credit scheme are done by project staff. This includes the choosing of the target population and motivating them to form themselves into groups.

Under this project the target population is not difficult to identify as the entire population of the target area falls into the criteria of small and marginal farmers.

The grouping has been made easy as the system follows the already existing segregation in the population which is by way of caste. This project area sees a strong social grouping system based on various castes. What are known as the Scheduled Castes and the Schedules Tribes constitute 17% of the total population of the area. The rest is known as the Backward Castes. This section of people is further divided into various other castes which provides a wide but well defined grouping system which has small and easily manageable groups of people.

The grouping system of the credit scheme has followed this same caste system. However for the majority Backward Castes population, eligibility for membership is determined by poverty.