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Question

Which of the following is/are the major functions of SHGs?

I- It aims to build the functional capacity of the poor and the marginalized in the field of employment and income generating activities.

II- It resolves conflicts through collective leadership and mutual discussion.

III- It provides collateral free loan with terms decided by the group at the market driven rates.

A Only I Correct Answer Incorrect Answer
B Only II Correct Answer Incorrect Answer
C I & II Correct Answer Incorrect Answer
D II & III Correct Answer Incorrect Answer
E all of the above Correct Answer Incorrect Answer

Solution

Solution- It looks to build the functional capacity of the poor and the marginalized in the field of employment and income generating activities. It resolves conflicts through collective leadership and mutual discussion. It provides collateral free loan with terms decided by the group at the market driven rates. Such groups work as a collective guarantee system for members who propose to borrow from organised sources. The poor collect their savings and save it in banks. In return they receive easy access to loans with a small rate of interest to start their micro unit enterprise. Consequently, Self-Help Groups have emerged as the most effective mechanism for delivery of microfinance services to the poor.

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