Explain the role of SHGs in rural credit.
Answers
Answer:
1) SHGs have been formed to fill the gap between formal credit system.
2) A typical SHG can have 15 to 20 members usually belonging to the same village.
3) The SHGs provide loans to their members at reasonable rate.
4) The most important feature of SHG is that most of these groups are being organised by women.
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Answer:
There are four major role of SHGs in rural credit
Explanation:
In this question, we have to discuss the role of SHG in rural credit.
1. Encourage saving for the poor:
The first role of the SHGs in rural credit s that SHGs play an important role in encouraging the poor to save money. The SHGs organized many programs related to the benefits of saving.
2. Provide micro-finance to the poor:
The next role of the SHGs is that they provide small finances to the poor persons of the villages.
3. Offer collateral free loan:
The next major role of SHGs are that it provides the collateral free loan to the those rural person who not getting loans from the banks.
4. Removal of conflicts:
The next role of the SHG is that is removes the conflict between two parties by the mutual discussions.
Hence, these are the roles of the SHGs in rural credit.
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