Money and Credit

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• Summary

1. Self Help Groups can be described as newer ways of providing loans to the poor. 
2. The idea behind Self-Help Groups is to organise the rural poor into self-help groups and collect their savings.
3. Saving per member varies from Rs 25 to Rs 100 or more depending on the ability of the people to save.
4. Members can take small loans from the group itself to meet their own needs. The group charges less rate of interest on these loans.
5. If the group is regular in savings, it becomes eligible for availing loan from the bank.
6. SHGs help borrowers overcome the problem of lack of collateral. They can get timely loans for a variety of purposes and at a reasonable interest rate.