Question

Explain the importance of Self Help Groups?​

Answer 1

Answer:

Self-Help Group (SHG) is a small voluntary association of poor people, preferably from the same socio-economic background. They come together for the purpose of solving their common problems through self-help and mutual help. The SHG promotes small savings among its members. The savings are kept with a bank.They help in accessing credit to the poor and thus, play a critical role in poverty alleviation. They also help to build social capital among the poor, especially women. This empowers women and gives them greater voice in the society .

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Answer 2

Answer:

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. SHG’s help in pooling the savings of the members, who are poor people

. Members can get timely loans for a variety of purposes.

. They get loan at a reasonable rate of interest.

. It helps borrowers to overcome the problem of lack of collateral and documentation.

. It saves them from exploitation of the money lenders.

. This interest income becomes an extra source of income of the members.