Consensus Agreement for Secure Transactions in Self Help Groups

Microfinance institutions play a prominent role in promoting entrepreneurs and small businesses for their livelihood. Self help groups are one such institution that provides small-scale financial assistance to women in rural India. Two of the emerging protocols that promise a lot of scope for microfi-nance institutions are consensus algorithms and smart contracts. This paper proposes how the consensus based agreements can improve the transparency, auditability and verifiability of the transactions in a self help group “AmritaSREE”. The current system of this self help group utilises physical ledgers to record the group transactions and loans. This can cause errors and lack of transparency in the ledger. In order to improve the functioning of this SHG, a mobile application is designed to digitize the current physical ledger-based system. In this paper, we discuss the structure and functioning of this self help group and a human centered design approach for a mobile application to assist the functioning of the SHG. We also present the design and rationale for consensus based agreements and a comparative study with smart contracts.