Question

Importance of self help groups in rural development

Answer 1

Self-help groups (SHGs) are small groups of people (especially from rural areas) who pool theirresources and individual savings together.It is from this pool that loans are given to those members who are in urgent need of money. The loans provided by SHGs are at very nominal interest rates, which is lower than that charged by the informal sector. Ifthe SHG functions well for over a year, then it becomes eligible for loans from banks. Such loans are then used for creating self-employment opportunities forthe poor. It is with this bank loan that self-employment is created for the members of the group and their families, thereby increasing their standard of living. SHGs are working in rural India and have greatly helped in taking out poor farmers from debt-traps and helping them lead a life of dignity. Another remarkable successmade by these groups is in making the Indian rural women self-reliant. Thus, with the help of SHGs, the rural poor become economically upgraded, and need not to
be dependent on moneylenders anymore


•Importance of SHGs

1. Pool the individual resources and savings, which the banking system fails do(due to inadequate banking system in India)

2. Facilitates the members to employ themselves in numerous self-employment opportunities

3. Help in raising the living standards of the concerned members

4. Reduce the dependence on the informal credit sources

Yes, SHGs are quite successful in India. This is particularly because of the aforementioned points that highlight the significance of SHGs.

Answer 2

Answer:

Self Help Groups are community-based institutions that share common economic and social conditions in rural areas. They voluntarily came together to pool resources for the upliftment of their community members. They serve the purpose of eliminating social barriers of castes, gave a strong leadership position to women, anti-poverty program and install change that comes from within a society.