Self help group are the building block of organization of rural poor. Support this statement
SHGs are the building blocks of organisation of the rural poor because of the following reasons:
- In order to meet the credit needs of the rural poor, SHGs are formed comprising of 15-20 members. Regular contributions are made from the member’s savings.
- The SHGs provide small loans to its members at a very reasonable interest rates.
- SHGs create self-employment opportunities to the rural poor. Women play a very active role in the working of these groups.
- Loans are also provided to the members for releasing their mortgaged land from moneylenders, buying seeds, fertilisers and other agricultural inputs required for farming, purchasing handlooms, cattle and other requirements.
- SHGs help borrowers to overcome the problem of collateral which is required by other sources that provide loans.
- SHGs most importantly protect the rural poor from the exploitation of moneylenders.
- Apart from meeting the credit needs of the poor SHGs has helped women become financially independent and also a number of social issues relating to health, domestic violence are discussed within the group and then necessary action is taken place.