Which of the following statements are true regarding Self-Help Groups (SHGs)?
(A) They emerged because the formal credit system had fully met the credit needs of poor rural households.
(B) They have helped in the empowerment of women.
(C) They pool money through small contributions made by each member.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (B) and (C) only
SHGs came up to fill a gap. Formal credit did not reach poor households that had no collateral.
(A) They emerged because the formal credit system had fully met the credit needs of poor rural households. — Incorrect. They came up because formal credit had proven inadequate.
(B) They have helped in the empowerment of women. — Correct. SHGs have helped in the empowerment of women.
(C) They pool money through small contributions made by each member. — Correct. Each member gives a small amount. Loans are given from the pooled money.
NCERT (2026-27): “5.3 Credit and Marketing in Rural Areas … Recently, Self-Help Groups (henceforth SHGs) have emerged to fill the gap in the formal credit system because the formal credit delivery mechanism has not only proven inadequate but has also not been fully integrated into the overall rural social and community development. Since some kind of collateral is required, vast proportion of poor rural households were automatically out of the credit network. The SHGs promote thrift in small proportions by a minimum contribution from each member. From the pooled money, credit is given to the needy members to be repayable in small instalments at reasonable interest rates. …” “… SHGs have helped in the empowerment of women. …” |