Question

Why are banks willing to give loans to the women organised in SHGs

Answer 1

Self Help Groups (SHGs) is a small group having 15-20

members from local neighborhood who meet regularly to save small amount say

Rs.25 to Rs.100. Members can take small loan from the group and repay it with

less interest that usual money lenders. After one or two years, if the group is

sill saving, they become eligible for availing bank loans. SHGs are the

building blocks of organization of the rural poor. Lending loans to such groups

help women to become financially self-reliant, to provide working capital need,

to buy assets for their business like sewing machines, cattle etc.

Answer 2

banks are willing to give loans to the women's fro SHGs because they have a proper documentation and a proper collateral.