Self-Help Groups — originally by SBI, joint liability, support by RRBs and scheduled commercial banks
Question
Consider the following statements: How many of the above statements are correct?
- 1.
The Self-Help Group (SHG) programme was originally initiated by the State Bank of India by providing microcredit to the financially deprived.
- 2.
In an SHG, all members of a group take responsibility for a loan that an individual member takes.
- 3.
The Regional Rural Banks and Scheduled Commercial Banks support SHGs.
Options
Only one
Only two
All three
None
Explanation
Statements 2 and 3 are correct. The core mechanism of SHGs is peer pressure and joint liability, making the whole group responsible for an individual's debt. Both RRBs and commercial banks actively lend to SHGs. Statement 1 is incorrect; the monumental SHG-Bank Linkage Programme was piloted and initiated in 1992 by NABARD, not the State Bank of India.
Answer: (b).
Question details
Year
2023
Paper
GS Paper 1
Question
Q74
Subject
Economy
Sub-topic
Financial Inclusion & Schemes
Type
How-many counting
Difficulty
Medium
Nature
Static
Source hint
NABARD SHG-Bank Linkage Programme Framework
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