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Self-Help groups for the poor
- The idea is to organise rural poor , in particular women , into small self-help groups (SHGs) and pool (collect) their savings .
- A typical SHG has 15-20 members who meet and save regularly. Saving per member varies from Rs. 25 - Rs.100 or more depending on the ability of the people to save.
- After a year or two, if the group is regular in savings, it becomes eligible for availing loans from the bank. The loan is sanctioned in the name of the group and is meant to create self-employment opportunities for the members.
- Members can take small loans from the group itself to meet their needs.
- The group charges interest on these loans but this is still less than what the moneylender charges.
- Most of the important decisions regarding savings and loan activities are taken by the group members .
- The group takes decisions about loans to be granted - the purpose , amount , interest to be charged , repayment schedule etc.
- Any case of non-repayment of a loan by any one member is followed up seriously by other members of the group.
- Thus, the SHGs help borrowers overcome the problem of lack of collateral .
