1. Formation: A Self-Help Group (SHG) is formed by 15-20 poor people, mostly women, who belong to one neighbourhood in a village and who come together to save and to help each other. 2. Regular savings: The members meet and save regularly; the saving per member varies from Rs 25 to Rs 100 or more, depending on the ability of the people to save. This pooled saving becomes the group's own fund. 3. Internal lending: Members can take small loans from the group itself to meet their needs - for example, to buy seeds, to repay an old loan or to meet a family expense. The group charges interest on these loans, but this is still LESS than what the moneylender charges. 4. Decision making by the group: It is the group - not the bank - which decides about the loans to be granted to its members: the purpose, amount, interest rate and schedule of repayment. The group is also responsible for the repayment of the loan. 5. Bank linkage: After a year or two, if the group is regular in savings, it becomes eligible for availing a loan from the bank. The loan is sanctioned in the name of the group and is meant to create self-employment opportunities for the members - releasing mortgaged land, meeting working capital needs (e.g. material for weaving), acquiring assets like a sewing machine, handloom, cattle, or buying materials for house construction. 6. Overcoming the collateral problem: In this way SHGs help the borrowers overcome the problem of lack of collateral and documents, so they can obtain timely loans at a reasonable interest rate and escape the clutches of the moneylender. 7. Social role: The regular meetings of the group provide a platform to discuss and act on a variety of social issues such as health, nutrition, education and domestic violence, and they make women financially and socially self-reliant. Hence SHGs are the building blocks of the organisation of the rural poor.