What is CGT in Microfinance?
CGT, or Compulsory Group Training, is an essential part of microfinance operations, especially when working with Joint Liability Groups (JLGs). It is a structured learning process designed to educate JLG members on various aspects of microfinance. Let’s explore what CGT involves.
Key Elements of CGT:
- Financial Education: CGT provides financial literacy to JLG members. They learn about loan terms, interest rates, and the importance of timely repayments.
- Group Responsibility: CGT emphasizes that all members of a JLG are collectively responsible for each other’s loans. If one member defaults, it affects the entire group.
- Operational Procedures: Members are taught the procedures for loan disbursement, repayment, and savings. This ensures they understand how the microfinance institution operates.
- Risk Management: CGT covers risk identification and management. Members learn to set aside savings for emergencies and unexpected financial challenges.
