ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -SHGs help borrowers to overcome the problem of lack of collateral in the following ways: It is the group that is responsible for the repayment of loan. Any case of non-payment of loan by any member is followed up seriously by other members.

Detailed explanation-2: -Answer: The basic behind the SHGs is to provide a financial resource for the poor through organizing the rural poor especially women, into small Self Help Groups. They also provide timely loans at a responsible interest rate without collateral.

Detailed explanation-3: -Answer. Answer: SHG ( self help group) it is groups of people who invest their money or save for future use. It helps to the borrowers overcome the problem of lack of collateral because it provides them money in term of need without take any collateral or assets as compared to the bank or money lenders.

Detailed explanation-4: -"The Self-Help Groups help borrowers to overcome the problem of la collateral security.” Support the statement with examples.

Detailed explanation-5: -Banks lend no collateral loans to individuals when organised in SHGs because all group members are responsible for the repayment of loans.