A group is a collection of five women who come together to gain access to credit. Groups are the building blocks of the peer-lending model, and strict credit discipline begins with strong groups. In forming groups, it is important that groups are self-selected since each member of the group serves as a guarantor for all other members. If SKS staff were to dictate group membership, collective responsibility would be difficult to enforce. SKS does, however, recommend to interested individuals that they select those in whom they have trust and those belonging to similar social and economic backgrounds to minimize unequal bargaining strength and power struggles.

With respect to requiring a group of five versus a group with fewer or more members, experience has demonstrated the following:

• a five member group is small enough to effectively exert group peer pressure and enforce collective responsibility on a unanimous basis
• a five member group is large enough for the guarantors to collectively handle repayments of missed installments should one member default
• a five member group is the minimum required to maintain an adequate balance in the group fund savings for the day to day subsistence needs of its members

With respect to requiring a group of five versus a group with fewer or more members, experience has demonstrated the following:

As groups are formed within a village, a collective or sangam evolves which consists of a maximum of eight groups or 40 members. Sangam meetings are held on a weekly basis during which SKS staff collect and record group savings, loan distributions, and loan repayments. In addition, weekly sangam meetings serve as a forum for discussion of loan proposals, loan utilization, and community issues. Each sangam elects a leader and deputy leader who are responsible for facilitating meetings and ensuring proper compliance with SKS procedures.