Saturday, February 13, 2010
GRIM TRIGGER IN MFI
Micro-finance institution work through the medium of SHG. here every member contributes a certain amount regularly. However SHGs get dismantled after some time; this is so as when even person does not make his/her payment, the others followsuit. The cooperation among members are sustained through Grim Trigger Strategy where everybody cooperates as long as everybody does and defect forever when one of them does. This is so as people are repeatedly facing same collective action problem.
Subscribe to:
Post Comments (Atom)
4 comments:
Collective action requires continuous effort and drive.There is no magic pill or shall I say magic adhesive which will keep people together for eternity.Realization that everybody looses out in case of failure of cooperation does play a role in successful running of an SHG.
Good Things come in small packages. The effects of Microfinance are far reaching and and measured over a long term. Though problems do arise in bringing together people to form SHGs and sustaining the group , we do need to realize that successful collective actions requires continuous effort and perseverance. Forging collective spirit and working for the collective benefit will reap fruitful results in the long term.
Often,Collective Non-Cooperation can be more contagious than collective co-operation. Actually, repayment of loans in SHG's is ennsured through the pressure of the other members (who are also friends and peers). But this can work only upto an extent. Thesame peer network can be the SHG's undoing since an incidence of loan default can also be transmitted contagiously through this close-knit group.
Agree totally with George.
What I think is that to achieve anything, there is are 3 stages. Visualize, Verbalize and Actualize (in the same order).
Problems happen when one of the 1st two are not followed or either given a miss altogether. In the SHGs, i think, the Visualization stage is not properly conveyed or addressed. Unless the person visualizes properly the potential benefits and commit to it, the result could never be actualized.
Post a Comment