Lånegrupper

Lånegrupper, often translated as "lending circles" or "savings and credit associations," are informal or semi-formal groups where members pool their money to provide small loans to each other. These groups are particularly prevalent in developing countries and among marginalized communities. The core principle is mutual support and access to credit for individuals who may not qualify for traditional banking services due to lack of collateral, credit history, or insufficient income.

Typically, members contribute a fixed amount to a central fund on a regular basis, such as weekly or monthly. The accumulated funds are then lent out to individual members, usually through a rotation system or a lottery. The borrower repays the loan with interest, and this money is added back to the group's pool, making it available for the next borrower. This cycle continues until all members have had a chance to borrow.

The interest rates charged within lånegrupper can vary. Some groups operate with a minimal or no interest charge, focusing purely on mutual aid. Others may charge interest to cover administrative costs, compensate for the risk, or to build up a larger reserve fund for future lending. The repayment terms are also flexible and agreed upon by the group members.

Lånegrupper serve several important functions. They provide a vital source of capital for small businesses, personal emergencies, and educational expenses. They also foster a sense of community, trust, and financial discipline among members. The collective responsibility inherent in these groups often leads to high repayment rates. While lacking formal legal structures, many successful lånegrupper operate for years, demonstrating their sustainability and value as a microfinance tool.