Group Functioning and Group Stability:A Micro Level Study from Rural Orissa

In the absence of credit, the poor are unable to participate in productive activities and thus deprived of getting any benefit from the development opportunities. The paper analyses the functioning of group based lending, especially of women in the context of two villages located in the district of Bargarh, Orissa. The paper suggests that in order to make microfinance sustainable in the long run there must be growth in the income generating activities in the local economy through diversification of activities so that demand for the goods produced by members would find market. This would facilitate repayment of loan. The paper concludes that the stability of the majority of the groups has been possible due to their proper functioning in terms of various parameters viz., solidarity, saving mobilisation, proper utilisation of loans, etc. However, the problems of default, if any, need to viewed seriously and should be tackled jointly by banks, NGOs, promoters as well as sincere efforts by group members themselves.