Saved Bookmarks
| 1. |
Describe the role of shg in providing a better financial facility for rural household |
|
Answer» SELF\xa0Help Group are small groups of 15-20 members of rural people in particular women belonging to one neighbouhood who meet and saves regularly. The members of the group can take small loan to meet their needs on low interest rate.Role:\tMost of the decisions regarding the savings and loan activities are taken by the group members.\tThe group decides as regards the loans to be granted- the purpose, amount, interest to be\tcharged, repayment schedule etc.\tGroup is responsible for the repayment of the loan.\tAny case of non-repayment of loan, by any one member is followed up seriously by other members in the group.\tThe SHG help borrowers overcome the problem of collateral.\tThey provide timely loans for a variety of purposes and at a reasonable interest rate. \tSelf-Help Groups (SHGs) are informal associations of people who choose to come together to find ways to improve their living conditions.\tIt can be defined as\xa0self governed, peer controlled information group of people with similar socio-economic background and having a desire to collectively perform common purpose.\tVillages face numerous problems related to poverty, illiteracy, lack of skills, lack of formal credit etc. These problems cannot be tackled at an individual level and need collective efforts.\tThus SHG can become a vehicle of change for the poor and marginalized. SHG rely on the notion of “Self Help” to encourage self-employment and poverty alleviation.Functions\tIt looks to\xa0build the functional capacity\xa0of the poor and the marginalized in the field of employment and\xa0income generating\xa0activities.\tIt\xa0resolves conflicts\xa0through collective leadership and mutual discussion.\tIt\xa0provides collateral free loan\xa0with terms decided by the group at the\xa0market driven\xa0rates.\tSuch groups\xa0work as a collective guarantee system\xa0for members who propose to borrow from\xa0organised\xa0sources. The poor collect their savings and save it in banks. In\xa0return\xa0they receive easy access to loans with a small rate of interest to start their micro unit enterprise.\tConsequently, Self-Help Groups have emerged as the most effective mechanism for\xa0delivery\xa0of microfinance services\xa0to the poor. |
|