It is an established fact behaviour of an individual fluctuates significantly when alone than in a group setting. Group dynamics plays an important role in influencing and subtly nudging individuals’ responses and behaviour. Using the example of swarm intelligence, we can say that in a group setting the individuals develop collective intelligence and a group strategy which, as an individual, one never visualised. In this short note, I will elaborate on a tool that we have developed for a Sacco or a federation/society or a self-help group that can accurately predict the creditworthiness of the group as an entity. This is critical for any microfinance agency that advances loans and credits to the federation to accurately determine the creditworthiness of the group. In many microfinance institutions, the loans are advanced to a group and therefore it is incumbent upon each member of the group to repay the money. If anyone defaults then it is the collective liability of the group to make do with the default. During our ongoing research on the topic of entrepreneurship and creditworthiness, we were able to precisely pinpoint factors and variables that influenced individual and group dynamics. We were able to identify four factors viz., the composition of the Saccos and the role of the Saccos leadership, the interpersonal dynamics, the consensus-building mechanism and the process orientation that determined the success or failure of the group.
The precise role played by the Saccos leadership often determines rightly or wrongly the pattern of responses and behaviour of its members. A very dominant and authoritative leadership switches of the silent majority who prefer to remain quiet but silently they isolate themselves from the group decisions. In addition, by not actively contributing to the decision-making process they contribute to the ‘pooling of ignorance’ rather than the ‘pooling of expertise’. When things go wrong these silent members are the first to defy the group. Therefore, it is important that the leadership takes all decisions by involving everyone and actively listening to them. There is another dysfunctional mechanism often resorted to by the Saccos. The voting system sharply alienates members. The minority is mentally never with the majority's decision. Therefore ‘let us agree to disagree’ type approach is a desirable option. The best group is one in which the individual responses given separately and in a group are very similar. The need to conform to the group and the need to be giving socially acceptable responses need to be checked to increase the efficacy of the saccos.
In the effective functioning of the saccos the process dynamics and its correct appreciation plays an important role. Members must ask themselves what is their role and how are they playing, whether are they truthful, whether is there enough trust among the members, are they appreciating what others are saying, can they show empathy are a few of the process-related concerns that need close scrutiny.
Finally, a group or a federation or a saccos can work effectively only if they adopt a win-win approach. This implies that the group succeeds only when all succeed and the weakest link in the chain is supported. This can happen when the negotiations among the group members happen in an atmosphere of openness, mutuality and trust.
We at EcoDev have developed precise group psychometrics batteries to identify the group dynamics which can throw light on the shortcomings that affect its performance. Once identified correct coaching and sensitization can help the group function with a common vision and consensual approach.
