Name: Exploring Money as a Medium of Exchange in Our World
Uploaded: 2019-07-19
Duration: 4 min 39 s
Description: We do different daily transactions. Let’s learn how money is a part of these transactions, how things are different than before with money, and how it is a medium of exchange.

Question

Briefly explain the functioning of self help groups for the poor in matters regarding availability of loans.

Accepted Answer

A small group of people about $15 - 20$ from a common neighbourhood join together and pool their savings is known as a Self-help group. Most of the important decisions related to 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.,

SHGs help borrowers overcome the problem of lack of collateral and get timely loans for a variety of purposes and at a reasonable interest rate.

Members of SHG can take small loans from the group to meet their needs at an interest that is very less than what the moneylender charges. After a year or two, if the SHG is regular in savings, it becomes eligible for availing loan from the bank. The loan is sanctioned in the name of the group and is meant to create self-employment opportunities for the members.

Briefly explain the functioning of self help groups for the poor in matters regarding availability of loans.

Important Questions on Money and Credit

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