What is the role of SHGs? What are the reasons of its growing popularity?

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Answer

Answer

Most of the decisions regarding the savings and loan activities are taken by the group members.

The group decides as regards the loans to be granted- the purpose, amount, interest to be
charged, repayment schedule etc.

Group is responsible for the repayment of the loan.

Any case of non-repayment of loan, by any one member is followed up seriously by other members in the group.

The SHG help borrowers overcome the problem of collateral.

hope it will help u:)

Answer

The self help group (SHG) approach is a new instance into the field of rural development which aims at improving the living condition of the rural poor by creating sustainable community based institutions. ... The self help groups in the present study area are engaged in various income generating activities.

**SHGs are becoming popular for the following reasons:
(i) They help borrowers overcome the problem of lack of collateral.
(ii) They can get timely loans for variety of purposes and at a reasonable interest rate.
(iii) They are building blocks of the organisation of the rural poor.

itz. @.V. ##. :))

Answer

The Role of Self-Help Groups (SHGs)

Self-Help Groups (SHGs) play a significant role in empowering individuals, particularly women, and promoting socio-economic development at the grassroots level. SHGs are small, informal groups of individuals who come together to address common issues and work towards their economic and social upliftment. Here are some key roles played by SHGs:

1. Economic Empowerment: SHGs provide a platform for individuals to pool their resources, save money, and access credit facilities. Members contribute a small amount regularly, which accumulates as savings. These savings are used to meet the financial needs of group members, including starting small businesses, investing in income-generating activities, and addressing emergencies.

2. Access to Credit: SHGs act as informal banks, where members can borrow money at reasonable interest rates. This access to credit helps members to invest in income-generating activities, expand their businesses, and improve their standard of living. SHGs also provide financial literacy and training to enhance the financial management skills of their members.

3. Capacity Building: SHGs promote skill development and capacity building among their members. They organize training sessions on various topics like entrepreneurship, leadership, marketing, and vocational skills. These training programs equip members with the necessary knowledge and skills to start and manage their businesses successfully.

4. Women Empowerment: SHGs have been particularly effective in empowering women, who often face social and economic marginalization. They provide a platform for women to come together, share their experiences, and collectively address their issues. SHGs enable women to develop leadership skills, gain confidence, and actively participate in decision-making processes.

5. Social Support: SHGs foster a sense of solidarity and mutual support among their members. They provide a forum for individuals to share their problems, seek advice, and find solutions collectively. This social support network helps in reducing vulnerabilities and building resilience among the members.

Reasons for the Growing Popularity of SHGs

The popularity of SHGs has been steadily growing due to several reasons:

1. Empowerment: SHGs empower individuals, particularly women, by providing them with access to credit, skills development, and a platform to voice their concerns. This empowerment leads to increased self-confidence, enhanced decision-making abilities, and improved socio-economic status.

2. Poverty Alleviation: SHGs play a crucial role in poverty alleviation by promoting income-generation activities and enhancing livelihood opportunities. Through access to credit and training, members can start their businesses and generate income, thereby lifting themselves and their families out of poverty.

3. Community Development: SHGs contribute to community development by promoting collective action and addressing common issues. They undertake various community development projects like building infrastructure, improving sanitation facilities, and promoting education and healthcare.

4. Financial Inclusion: SHGs provide financial services to marginalized communities, who often have limited access to formal banking systems. By mobilizing savings and providing credit facilities, SHGs ensure financial inclusion and help individuals become financially independent.

5. Government Support: Governments at various levels have recognized the importance of SHGs in grassroots development and have implemented policies and programs to support and promote their activities. This support has further contributed to the popularity and success

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