India Focus Note 19 addresses the issue of the lack of audits of SHG balance sheets. It highlights the fact that Self-Help Group members are unable to use SHGs as a reliable source of savings because they cannot be sure that all their deposits are accounted for. Furthermore, it points out that without proper control systems, SHG savings are exposed to abuse. The authors argue that “Unless they balance annually, SHGs should break every 2-3 years by providing an unconditional cash-out opportunity (…) to all members.” This note also provides an array of management tools to SHGs and advice on what banks should do before lending to them

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