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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Credit and its types


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.