Question

When will a self-help group become eligible to avail loans from banks?

• A. When the group gathers enough members
• B. When the group has saved up to ₹10 lakhs
• C. When the group is regular in its meetings for a year or two
• D. When the group is regular in its savings for a year or two

Answer 1

The correct option is D When the group is regular in its savings for a year or two

Self-help groups use the money pooled in by the members as a source of credit. When the group is regular in its savings for a year or two, banks consider these savings as collateral and provide bigger loans to the self-help groups. This, in turn, is disbursed to the members of the self-help group as loans.