Self Help Groups for the Poor
Let us see why poor households are still dependent on informal sources of credit:-
- In rural India, banks are not present everywhere. Even if banks are present, getting a loan from a bank is much more tedious as proper documents & collateral are required.
- To overcome these problems, Self Help Groups (SHGs) are created by people. These are small groups of poor people who promote small savings among their members. Usually, an SHG has 15-20 members, who belong to one neighborhood, they meet & save regularly.
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Advantages of Self Help Group (SHG)
- Borrowers’ problem of lack of collateral is met by the SHGs.
- People get timely loans for various purposes, that too at a reasonable interest rate.
- SHGs are the guiding blocks of the rural poor.
- Women with help from SHGs become financially self-reliant.
- Regular meetings of the group provide a platform for discussion & act on various social issues like health, nutrition, domestic violence, etc.
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CBSE Notes Class 10 Economics Chapter 3: Money and Credit
In the chapter, CBSE Notes Economics Chapter 3: Money and Credit, we will learn about the modern forms of money and also how they are connected with the banking system. In the latter part of the article, we will know about the credit system and how it impacts the borrowers, depending upon the situation, and also go through these notes for the understanding of the topics in detail.
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