Definition
But what about people who don’t have collateral to get a loan? Here comes a self-help group.
- Composed of 12-20 members (mostly women).
- Daily savings according their capabilities.
- When any member needs help, they give out loans.
- If the money is not suffice, they can go to a bank to get a loan officially.
Why banks give loans to SFGs?
Because they know that if a member fails to give money, the others must recover it. And the savings act as a collateral.
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Flashcards
What are self-help groups? ? Often, people don’t have any collateral to get any loans, thus the motive of the self-help groups are to counter that.
- Composed of 12-20 members (mostly women).
- Daily savings according their capabilities.
- When any member needs help, they give out loans.
- If the money is not suffice, they can go to a bank to get a loan officially.
Why banks give loans to SFGs? ? Because they know that if a member fails to give money, the others must recover it. And the savings act as a collateral.