Q11 of 11 Page 87

Do you feel that the loans taken from SHGs are helpful to the members? How?

Yes, it is helpful because to obtain the loan the individual has to keep something as security in the bank. On, that basis only the banks provide the loan but if the loan is taken through the Self help groups than they don’t have to keep any asset as security. It becomes the responsibility of the group to ensure that its members timely repay the loan to the bank.

NOTE- Self help group is an informal group of individuals with poor social and economic background decided to collate to encourage the savings and meet the requirement of its members in case of need and urgency. Their primary focus is to improve the financial condition of its members.


More from this chapter

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7

If many loans are written off (that is, borrowers are not required to pay back the money) how will this affect the working of the bank?

 8

People have to pay a higher interest on loan than the interest they receive on a fixed deposit for the same time-period. Why do you think this is so?

 9

Suppose this year the rains are poor and the crop yield is only half as much as was originally expected. Some people say that if this happens the farmers should be asked to pay back only half the amount they have taken as loans. However other people say that full amount should be repaid, keeping in view the next year’s crop. In your opinion what should the bank do and why?

 10

Read the paragraphs under the header ‘Types of Loans’ and answer the following:

What sort of loans are more in your area?