Q. 65.0( 2 Votes )

What are self- help groups? How are they different from conventional ways of providing loans?

Answer :

Self Help Groups is a voluntary organization formed by the women to enhance the microcredit for the members in it and the women members get to indulge in the entrepreneurial activities such as run a canteen, small shops…etc. This self-help group was established to empower the women, and the empowerment of women will not only improve her, but it also improves the family as a whole which also contributes to the economic development of the country.


They are different from other organized banking institution. Currently, in India, the banking system has emerged to a lot more than development. The main motive of the bank is to accept the deposit and lend that deposit as a loan to investors. In a country like India, an ordinary person will not do not have any excess money to save as a deposit in the bank especially in rural areas. Nowadays, the bank is charging fines for our deposits when they go below a certain limit; they state that there should be a minimum balance of 1000 to 2000 RS in their bank account which is a big deal for the poor person in India whether in rural or urban areas. Self Help Groups helps to overcome the problem of saving for the ordinary person. Self Help Group is a voluntary organization formed by the women or men to enhance the microcredit for the members in it. The members of the organization save their money by fixing an amount to be deposited weekly, the amount will be such everyone can afford that. That deposited money can be advanced as a loan to any of the member in the group who is actually in need of it, but the loan will be advanced by the consent the group members. There will be transparency in the working of the organization because all the group members will be from the same village and all of them will be neighbors.


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