(a) Explain, why the banks do not lend credit to certain borrowers?

(i) Lack of set of documents to get a loan

(ii) People who have not repaid previous loans

(iii) Issue of high risks

(iv) Irregular incomes

(v) Less chances of repayment of the loan

b) Explain the functions of Self-Help Group in the villages.

(i) SHGs typically have $\displaystyle 15$–$\displaystyle 20$ members, usually from the same neighbourhood, who meet and save regularly.

(ii) Savings per member varies depending upon the ability of the people to save.

(iii) Members take small loans from the group itself to meet their needs.

(iv) The group charges interest on these loans at lesser rate of interest.

(v) After a year or so, if the group is regular in savings, it becomes eligible for availing loan from the bank.

(vi) Loan is sanctioned in the name of the group to create self-employment opportunities for the members.

(vii) Small loans are provided to the members for releasing mortgaged land, for meeting working capital needs, etc.

(viii) People get timely loans for a variety of purposes and at a reasonable interest rate.

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

(x) The group decides as regards the loans to be granted- the purpose, amount, interest to be charged, etc.

(xi) Group is responsible for the repayment of loan

(xii) In case of non-payment of loan by anyone is followed by other members

(xiii) SHGs are the building blocks of organization of the rural poor.