Question
Explain the working of Self Help Group.
Solution
The working of Self Help Group:
(i)A typical SHG has 15-20 members, usually belonging to one neighbourhood, who meet and save regularly.
(ii)Saving per member varies from Rs 25 to Rs 100 or more, depending on the ability of the people to save. Members can take small loans from the group itself to meet their needs.
(iii)The group charges interest on these loans but this is still less than what the moneylender charges. After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank.
(iv)Loan is sanctioned in the name of the group and is meant to create selfemployment opportunities for the members.
(v)Most of the important decisions regarding the savings and loan activities are taken by the group members. The group decides as regards the loans to be granted — the purpose, amount, interest to be charged, repayment schedule etc. Also, it is the group which is responsible for the repayment of the loan.
(i)A typical SHG has 15-20 members, usually belonging to one neighbourhood, who meet and save regularly.
(ii)Saving per member varies from Rs 25 to Rs 100 or more, depending on the ability of the people to save. Members can take small loans from the group itself to meet their needs.
(iii)The group charges interest on these loans but this is still less than what the moneylender charges. After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank.
(iv)Loan is sanctioned in the name of the group and is meant to create selfemployment opportunities for the members.
(v)Most of the important decisions regarding the savings and loan activities are taken by the group members. The group decides as regards the loans to be granted — the purpose, amount, interest to be charged, repayment schedule etc. Also, it is the group which is responsible for the repayment of the loan.
