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The objective
of income-generating loans is to enable SKS members to
generate income, build assets, and become self-reliant. If
members divert the loans for consumption purposes, they are
faced with the additional burden of repaying the loan with
interest without creating any profits or assets. In order to
ensure that members do not fall into this "debt
trap," the group and Sangam Leaders, along with the
Sangam manager, conduct evaluations of loan utilization within
one week from the date of disbursement.
If the funds are not being utilized for income-generating
purposes, the member has the following two options:
- she can return the full
amount of the loan at the next sangam meeting, stating the
reasons for not utilizing the funds, or
- she can retain the funds for
an additional week, at the discretion of the sangam
manager, if she feels that an income-generating activity
can be undertaken
If the funds
are not properly utilized by the end of the second week and
are not returned at the beginning of the next sangam meeting,
the member is liable for the first installment, including
interest, payable immediately.
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