BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is linked to the concept of group guarantee
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Each member waits for his chance to get the bank loan as per seniority in the group
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Such groups prepare their own plan for savings and credit
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They work on the principle of sharing their profit among members
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Detailed explanation-1: -A SHG is a group of about 10 to 20 people, usually women, from a similar class and region, who come together to form savings and credit organization. They pooled financial resources to make small interest bearing loans to their members. This process creates an ethic that focuses on savings first.
Detailed explanation-2: -Hence, we can say that NABARD promoted the concept of Self Help Groups (SHGs) for financing the poor.
Detailed explanation-3: -Apart from providing access to credit, bank linkage enables SHGs to utilize other services such as remittances of Mission and other government funds such as interest subvention and insurance services. Bank linkage also promotes the financial literacy of the members and contributes to prudent utilization of funds.
Detailed explanation-4: -Self-help groups are informal groups of people who come together to address their common problems. While self-help might imply a focus on the individual, one important characteristic of self-help groups is the idea of mutual support – people helping each other.