How to Automate a Self Help Group’s Savings and Loans
To automate a self help group, record each member’s savings, internal loans and repayments against her name, and let group totals come from those entries. GullySystem’s SHG Management System does this at the meeting, works out interest and sends reminders. The treasurer’s registers become statements any committee member can check.
List What the Treasurer’s Registers Hold
A typical SHG keeps several books: a members’ register, a savings ledger, a loan ledger, a minutes book and a cash book. The treasurer or a bookkeeper updates them after the meeting, often from notes taken while money was being counted.
Before moving to SHG management software, list which books your group or federation keeps and who fills each one. Software should produce the same information, member by member, from one set of entries. If it cannot give the bank or federation what they ask for, it adds work instead of saving it.
Record Savings and Attendance at the Meeting
Most groups meet on a fixed day and collect each member’s savings there. When entries are made later, a member who paid but was marked absent becomes a dispute at the next meeting.
SHG software records each member’s contribution against her savings plan and marks meeting attendance at the same time. The group total always equals the sum of its members. Payment and meeting reminders go out by SMS or email before the meeting day.
Keep Internal Loans and Bank Loans Apart
Groups lend their own savings to members, and many later take a bank loan that is lent on to members too. Mixing the two in one ledger is where interest and balances go wrong.
An SHG loan tracking app records each internal loan’s request, disbursement, repayment schedule and interest per member, and a bank loan separately with its own schedule. Anyone behind shows up before the next meeting, not at the end of the year. The bank’s own statement stays the record the bank goes by.
- Member-wise savings and loan balance
- Meeting attendance by month
- Overdue loans and how long each has been late
- Profit and loss, balance sheet and cash position
Give the Committee and Members the Same Numbers
An SHG runs on trust between members, and trust depends on everyone seeing the same figures. In practice, one person holds the books and the others take her word for it.
SHG accounting software gives the group leader, treasurer and NGO coordinator their own logins and roles, and keeps every entry with its date. Members can be given access to their own balance. Data is backed up, so a lost register or a treasurer who moves away does not take the group’s history with her.
Decide at the Federation Level, Not for One Group
A single SHG with a careful bookkeeper does not need software of its own. Well-kept registers and a monthly bank reconciliation are enough, and phones plus training may cost more effort than they save.
The case is stronger for NGOs, federations and rural development organisations that support many groups and total their registers every month. GullySystem’s SHG Management System is built for that work, and the free technology audit will tell you honestly whether your groups need it. Organisations that lend to or through SHGs can also look at GullySystem’s Loan Management System, which records members inside their group.
SHG books-to-software map
A map from each traditional SHG register to the software entry that replaces it, covering members, savings, internal loans, bank loans, meetings and the cash book. Go through it with your bookkeeper to check nothing a bank or federation asks for gets dropped.
Frequently asked questions
How do we move SHG records from Excel or registers to software?
Start with members and their current savings and loan balances, agreed at a meeting before entry. Past meeting-by-meeting history can be added later or kept in the old registers. Balances the whole group has agreed avoid disputes on the first day.
Can members see their own savings and loan balance?
Yes. Members can be given access to their own record, while the committee sees the whole group. Reminders for payments and meetings go to each member directly.
Is it an NRLM app?
No. It is not a government system and does not report into NRLM portals. It keeps the group’s own books, which you can print or export when a bank, federation or mission staff ask for them.
Have a specific situation to work through?
This article covers the general case. Tell us what you’re actually dealing with and we’ll respond directly.