question_answer

?Self Help Groups? help borrowers to overcome the problem of lack of collateral. Examine the statement.

Answer:

?Self Help Groups? help borrowers to overcome the problem of lack of collateral. We explain the system of working by ?Self Help Groups? in the following ways:

(i) In a self help group most of the important decisions regarding the savings and loan activities are by the group members.

(ii) Group members are well known to each other belong to the same society.

(iii) Also, it is the group which is responsible for the repayment of the loan.

(iv) In case, of non-repayment of loan by any member is followed up seriously by other members in the group.

(v) Due to this feature, banks are willing to lend to the poor woman. When organised in SHGS, even I though they have no collateral as such.