Question

What are self help groups (SHGs)?

• A. They are small groups of men or women, assisted by local bodies, who mobilize a fixed sum of money from each member to lend it out to the members who need at low interest rates
• B. These institutions collect money from large number of people and deploy the money in capital markets to diversify risk
• C. They are institutionalized to lend money to other banks
• D. They provide security to life and property

Answer 1

Answer: (A)

They are small groups of men or women, assisted by local bodies, who mobilize a fixed sum of money from each member to lend it out to the members who need at low interest rates

SHGs run small productive enterprises where men and women come together to mobilize money and lend it out to members at low interest rates. Kudumbasree in Kerala, for instance, is one such group. Option B are mutual funds, while Option C is function of RBI. Option D is a characteristic of insurance companies