Sarala follows the Individual loan in group setting methodology where a group of women individuals come together to borrow from a financial institution. This method of lending has proved to be highly successful and effective in many microfinance organizations in India and abroad as the group members share responsibility and guarantee each other’s loans. Each group normally has members ranging from 15 to 20 selected from the same village. The members are invariably adult and they should not be more than 58 years of age. The group conducts monthly meetings and selected representatives act as a preferred channel of communications with Sarala regarding any operational aspects of their borrowing from Sarala. Presence of the group also helps in conducting workshops/training programmes which are done to enhance awareness about various avenues of income generation.
Sarala initially stated with two small loan products to its borrowers, viz. Suchana-I and Suchana-II which are repayable in 45 and 37 equal installments within one year and ten months respectively. Both the loan products have a maximum cap of Rs.15000/-. A new product Suchana-Bi-weekly with a maximum cap of Rs.20000/- repayable in 24 bi-weekly (fortnightly) installments has been launched. The new product has been found more attractive compared to the earlier products; more than 80% of Sarala’s borrowers have availed this product.