What are Self Help groups(SHGs) in India? ****************************** Objectives & Features of SHGs A Self Help Group is an association of the poor people specially women who belong to the same social & economic background. The SHGs are usually informal groups of a locality or area, whose members have a common need and importance towards collective action. These groups normally consist of 10 to 20 members. Members of the group meet regularly, make their share of contribution. The SHGs bank linkage model has become famous in rural areas where as without bank linkage SHGs are also functioning. The SHG promotes small saving among its members, which are then kept with a bank. This common fund is then given a name. SHGs have been generally formed for specific issues. The main purpose of SHGs is to mobilize savings among their members and used resources to meet the emergent credit needs of the members of the group. SHGs generally work according to the local requirement. Objectives ******** The Objectives of Forming SHG are as Follows • To build mutual trust and confidence between the bankers and the rural poor people. • To encourage banking activities in a segment of the population in which formal financial institutions fell difficult to cover. Main features ********** Some Common Features of The Functioning of SHGs are as Follows: • The SHGs create the common fund by contributing their small savings. • Every member of the group actively participates in the functioning of SHGs and they meet regularly. • Their accounts and proceeding are maintained by the leader and leader is selected or elected among the group members. • Amount of loans are small and for short period. Loan is sanctioned on ‘trust’ with minimum documentation and without any security. The rate of interest differs from group to group. It is generally little higher than that of charged by banks. Repayment of loan amount is generally on time.
Posted on: Tue, 28 Jan 2014 02:42:59 +0000
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