Question

Explain the role of Self Help Groups in the rural economy.

Answer 1

The role of Self-Help Groups are as follows:

1. Self-Help Groups (SHGs) are small groups of people, mainly from rural areas, who save money together and create a common fund to help members who need financial support.
2. They encourage members to start different self-employment activities.
3. SHGs help improve the living standards of their members.
4. They reduce the need to borrow money from informal sources.
5. With the help of SHGs, poor people in villages become financially independent and rely less on local moneylenders who charge very high interest.