Sanghamithra: A Microfinance Institution with a Difference

Authored by Aloysius P. Fernandez and dated January 2007, discussing the microfinance institution (MFI) Sanghamithra and its distinctive approach to Self-Help Groups (SHGs). The paper explains that Sanghamithra, promoted by Myrada, differs from other MFIs by lending exclusively to SHGs as groups rather than to individuals within them, thereby promoting the group as a genuine financial intermediary and site of decision-making. A major theme is the critique of the reductionist trend where financial institutions, economists, and government agencies view SHGs solely as financial intermediaries or delivery mechanisms, neglecting their crucial role in institutional capacity building and social empowerment. Finally, the author justifies Sanghamithra’s structure as a not-for-profit company separate from Myrada to maintain its developmental orientation and avoid the pitfalls of high-growth, profit-driven microfinance strategies.