CUET Preparation Today
How did Self Help Groups fill the gap in the formal credit system in rural India? |
They formulated their own rules and regulations, which every person followed They forced the government to open rural cooperative societies for availing cheaper loans. Each member contributed and formed a pool of money None of the above |
Each member contributed and formed a pool of money |
The correct answer is option 3: Each member contributed and formed a pool of money Self Help Groups (SHGs) in rural India address gaps in the formal credit system by pooling together resources from their members. Each member contributes to a common fund, which is then used to provide loans to members for various needs. This approach helps overcome issues such as limited access to formal credit, high-interest rates, and lack of collateral, offering an alternative means of financial support and fostering financial inclusion. |
