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.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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