Question

Why is it better to borrow from Self-help groups rather than a moneylender?

Answer 1

Explanation:
This answer can be divided into two parts:

• What are self help groups and moneylender
• Comparison between them.

Answer: Self-help groups are small associations of women to help poor traders by giving loans to them.. On the other hand, Moneylenders are those individuals whose business is to lend money to others..

Self-help group	Moneylenders
Helps poor traders to take loans at a very low interest rate. Example- loan takers payer only 25 paise for every Rs.100	Gives loans to others at a very high interest rate. For example- charges Rs.3 for every Rs 100 earned by them.
Easier to do business by poor traders as they are not trapped by any conditions and free to sell their products anywhere.	If a farmer takes a loan from a moneylender they are bound by too many conditions like selling their products only to them and accepting whatever price they offer after cutting the interest rate.