Explain the role of 'Self Help Groups' in the rural society.

i. Self –Help Groups in rural society is a way of providing loans to the poor.

ii. The idea is to organize rural poor, in particular women, into small Self- Help Groups (SHGs) and pool (collect) their savings.

iii. Saving per member varies from Rs $\displaystyle 25$ to Rs $\displaystyle 100$ or more, depending on the ability of the people to save.

iv. Members can take small loans from the group itself to meet their needs.

v. Loan is sanctioned by the bank in the name of the group and is meant to create self-employment opportunities for the members.

vi. Most of the important decisions regarding the savings and loan activities are taken by the group members.

vii. The group decides the loans to be granted — the purpose, amount, interest to be charged, repayment schedule etc.

viii. Any case of nonrepayment of loan by any one member is followed up seriously by other members in the group.

ix. Because of this feature, banks are willing to lend to the poor women when organized in SHGs, even though they have no collateral as such.