Question

Explain the functioning of Self Help Groups (SHGs).​

Answer 1

Answer:

Functions of Self Help Groups

They try to build the functional capacity of poor and marginalised sections of society in the domain of employment and income-generating activities.

They offer collateral-free loans to sections of people that generally find it hard to get loans from banks.

They also resolve conflicts via mutual discussions and collective leadership.

They are an important source of microfinance services to the poor.

They act as a go-through for formal banking services to reach the poor, especially in rural areas.

They also encourage the habit of saving among the poor.