SHG Credit Mechanism
In Self-Help Groups, credit is given to needy members from:
- Government funds directly
- Foreign donations
- Pooled money from member contributions — Correct Answer
- Bank loans only
Explanation:
Correct Answer Explanation
From the pooled money, credit is given to the needy members to be repayable in small instalments at reasonable interest rates.
Key Points:
- SHGs promote thrift in small proportions by minimum contribution from each member.
- Loans are repayable in small instalments.
- Interest rates are reasonable compared to moneylenders.
- No traditional collateral is required.
Why Other Options Are Wrong
- A: SHG funds come from member contributions, not directly from government.
- B: SHGs are self-funded, not dependent on foreign donations.
- D: The primary source is pooled member money.
📚 About this Topic — CH-5: RURAL DEVELOPMENT
This multiple choice question is from CH-5: RURAL DEVELOPMENT, Indian Economic Development, NCERT Books. It has 4 options with a detailed explanation of the correct answer. Practice more MCQs from CH-5: RURAL DEVELOPMENT to strengthen your preparation.
