Question

Write a note on self help group

Answer 1

Explanation:

Since borrowing money needs proper documentation and collateral poor people's prefer informal sources to take loan. Thus to prevent this many poor people gather their savings as a collateral and use it as a collateral accordingly when required. It's meachanism is like:

•It is a group of poor people (mainly of woman's) living in villages. They gathers money to use it as a collateral to borrow money from bank.

•If one person of that group is unable to repay the loan then other members help to repay the loan.

•Since if any one of the member is unable to repay the loan in between the time period then the bank will not give them loan.

*conclusion:- Since they are helping each other by themselves thus this group is called a self help group.