Question

What is SHG ? State its features and advantages ?

Answer 1

SHG is a holistic programme of micro-enterprises covering all aspects of self-employment, organization of the rural poor into self Help groups and their capacity building, planning of activity clusters, infrastructure build up, technology, credit and marketing. Advantages of SHGs:

(i) The SHGs help the borrower to overcome the problem of lack of collateral.

(ii) They can get timely loans for a variety of purposes and at a reasonable interest rates.

(iii) SHGs are the building blocks of organisation of the rural poor.

(iv) Not only does it help women to become financially self-reliant, the regular meetings of the group provide a platform to discuss and act on a variety of social issues such as health, nutrition, domestic violence, etc.

Answer 2

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SHG:

SHG is a holistic programme of micro-enterprises covering all aspects of self-employment, organization of the rural poor into self Help groups and their capacity building, planning of activity clusters, infrastructure build up, technology, credit and marketing.

Features:

1. The SHGs create the common fund by contributing their small savings.
2. Every member of the group actively participates in the functioning of SHGs and they meet regularly
3. Their accounts and proceeding are maintained by the leader and leader is selected or elected among the group members.
4. Amount of loans are small and for short period.
5. Loan is sanctioned on ‘trust’ with minimum documentation and without any security.
6. The rate of interest differs from group to group. It is generally little higher than that of charged by banks.
7. Repayment of loan amount is generally on time.

ADVANTAGES:

• The SHGs help the borrower to overcome the problem of lack of collateral.

• SHGs are savings led and act as adhesive

• They give doorstep access to micro finance with near zero transaction cost

hope it helps you