Advertisements
Advertisements
Question
What is the basic idea behind the SHGs for the poor? Explain in your own words.
Advertisements
Solution
The basic idea behind the SHGs for the poor is to provide them with a vista for self-help in financial areas. A self-help group is a small group comprising people in rural areas who collect their savings and loan these out to members at an interest rate lower than that charged by the informal sector. If the SHG functions well for over a year, then it becomes eligible for loans from banks. Such loans are then used to create self-employment opportunities for the poor. Thus, they become economically upgraded and are not dependent on moneylenders anymore.
APPEARS IN
RELATED QUESTIONS
Why is the supervision of the functioning of formal sources of loans necessary?
Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
Why might banks be unwilling to lend to small farmers?
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
Suggest some ways by which small farmers can get cheap credit.
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
What are the other sources from which the small farmers can borrow?
In India, about 80 per cent of farmers are small farmers, who need credit for cultivation.
Explain with an example of how the terms of credit can be unfavourable for the small farmer.
Formal sources of credit does not include ______.
How can more employment be created in agriculture sector alone ? Explain any three ways.
Why do banks or lenders demand collateral against loans?
Answer the following question.
Explain the importance of 'collateral'.
