Explain about self help groups
(Shg)
Answers
It is a group of 15-20 members save regularly to create a savings pool.
Members of the group can take small loans from their combined savings. The loans bear interest at low rates.
It is a informal source of Credit.
After saving regularly for a few years, a self-help group becomes eligible for a loan from a bank without providing any collateral. The bank loan is used to generate more income and employment opportunities for the members of the group.
• A typical SHG can have 15-20 members generally belonging to the same village.
• The main motive of SHG's is to pool the savings of the poor people. Saving varies from Rs25 to Rs100 depending on the economic condition.
• The SHG's provide loans to their members at a reasonable rate. After a year or 2. If the group is regular in savings it becomes eligible for bank loans.
• Any case of non-repayment of loans by any one member is followed up seriously by other members in the group and because of this feature the commercial banks don't hesitate to give loans to these groups.
• This group helps the borrowers to overcome the problem of lack of collateral.
• This groups are being organized by women and this helps them to become financially self-reliant.
• This group provides a platform to discuss variety of social issues lite health domestic violence, etc.