Question

(i) What are SHGs?

(ii) Discuss the importance of the SHGs.

(iii) Why are banks willing to give loans to poor women if organized in SHGs?​

Answer 1

A self-help group (SHG) is a financial intermediary committee usually composed of 10 to 20 local women or men between 18 to 40 years. Most self-help groups are in India, though SHGs can be found in other countries, especially in South Asia and Southeast Asia.

Answer 2

Answer:

1-Self-help Groups (SHGs) are informal associations of people who come together to find ways to improve their living conditions. They are generally self-governed and peer-controlled.

People of similar economic and social backgrounds associate generally with the help of any NGO or government agency and try to resolve their issues, and improve their living conditions.

2-Combating social evils: The SHGs play a crucial role in overcoming social evils like alcoholism, drug addiction, gambling, etc.

Women empowerment: Women SHGs make its members independent from social constraints and allow them to make independent decisions. They can even actively participate in the gram sabha.

Active participation in democracy: SHGs can actively participate in the aspects of local governance. This would mean the inclusion of weaker and marginalised sections of the society in the local governance.

Increase employment opportunities in rural India: It allows for micro-level entrepreneurship within the rural society and reduces too much dependence on agriculture.

Easier access to government schemes: The government schemes are mostly meant for the marginalised sections of the society. The inclusion and identification of these people are highly difficult. If they are grouped together, it is easier for the government to identify those who are in need of assistance quickly and efficiently. It also prevents the exploitation and corruption of the government at the ground level.

Improves the standard of living: The collective team effort by the SHGs for financial inclusion allows for the improvement in the living standard, family planning, healthcare, of the vulnerable sections of the society.

Financial discipline: The members of the SHGs are encouraged to open savings accounts in banks. This assures improved living conditions, increased spending on education, health, etc.

3-The SHGs are very much responsible for the loans they give. If non-repayment of loan is followed up seriously by other members in the group. Because of this feature, banks are willing to lend to the poor women when organised SHGs, even though they have no collateral.

Explanation:

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