Question

5 What is the basic objective of the ‘Self Help Group ‘?How do they work?Describe advantages

of SHG for the poor?​

Answer 1

Explanation:

basic objective of self help group:

The basic objective of the Self Help Groups' (SHG's) is to organize the rural poor, in particular, women, into small groups so that they can pool in their savings. Usually belonging to one neighbourhood, these SHG's consist of 15-20 members who meet and save regularly. The savings per member varies from Rs 25 to Rs 100 or more, depending upon the ability of the people to save.

Working of self help group:

SHG is nothing but a group of people who are on daily wages, they form a group and from that group one person collects the money and gives the money to the person who is in need. Members also make small regular savings contributions over a few months until there is enough money in the group to begin lending.

advantages of self help group for poor:

• They help the rural women to become self reliant.

• They provide loans from the bank to the poor without collateral.

• It helps them to save their money and use, lend or borrow at any time just like the banks.

• It helps the farmers with their income as it provides loans for fertilizers, seeds etc.

Answer 2

The objectives, working, and advantages of self-help groups are:

• Objective: The basic objective of Self-help groups is to organize small groups of people usually women so that they can get benefits of bank credits and government subsidies. This financial assistance helps them to provide income-generating assets and take them above the poverty line.
• Working: A Self-help group consists of 15-20 members who belong to the same area or occupation. People deposit money varying from Rs 25 to Rs 100 depending on their ability. They take loans from their group itself when they need them. This helps them financially and removes the problems which occur during taking loans from banks.
• Advantages: Self-help groups have various advantages like financial assistance, status improvements, easy loans, savings for two years, and getting loans without collateral.

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