Self Help Group-3 , Banking Fundamentals to Know for Students.

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SHGs

Why  Self  Help Groups?

•Bank  credit  is  not  reaching   poorest of poor

•  Banks lend  for production purpose

•  Poor  need  money  for  consumption

•  Cumbersome lending norms  by  Banks

•  Timely  and  adequate credit not available for  poor

•  Security oriented lending   by  Banks

FOUR IN ONE ROLE OF SHGs

• A MONEY LENDER
• A VOLUNTARY AGENCY
• A DEVELOPMENT BANK
• A CO-OPERATIVE

MICRO CREDIT-MICRO FINANCE

MICRO CREDIT (MC): MC is  defined  as  a process  of  meeting  the capital  investment needs of individuals and groups for the startup and sustenance of small business enterprises”.

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MICRO FINANCE (MF): “MF  refers  to the entire range of  financial  services  to the poor,  skill up-gradation and entrepreneurial development to overcome poverty.”

RESERVE BANK OF INDIA 
RBI/2015-16/29
FIDD.FID.BC.No.02/12.01.033/ 2015-16 
(July 01, 2015 )

  An important step in the Linkage Programme would be the training of the field level officials and sensitization of the controlling and other senior officials of the bank.

  Considering the need and magnitude of training requirements of the bank officers/staff both at field level and controlling office level, the banks may initiate suitable steps to internalize the SHGs linkage project and organize exclusive short duration programmes for the field level functionaries.

  In addition, suitable awareness/sensitization programmes may be conducted for their middle level controlling officers as well as senior officers. 

WHAT IS A SELF HELP GROUP?

A Self-Help Group [SHG] is a small economically homogeneous and affinity group of rural poor generally not exceeding 20 members  voluntarily coming together :

vTo save small amounts regularly

vTo mutually agree to contribute to a common fund

vTo meet their emergency needs

vTo have collective decision making

vTo solve conflicts through collective leadership and mutual discussion

vTo provide collateral-free loans with terms   decided by the group.

How the groups are formed?

Groups are  formed with the help of:

v   N.G.O. (Non-government   organization)

v  S.H.P.I.(Self-help group promoting   institution)

v  VVV clubs

v  Government  agencies

v  Banks