What is the basic idea behind the SHGs for the poor?

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#1

What is the basic idea behind the SHGs for the poor? Explain in your own words.


#2

The basic idea behind formation of SHGs is to create self-employment for the poor, particularly rural poor women. The SHGs help poor borrowers to overcome the problem of lack of collateral.
They can get timely loans for a variety of purposes at a reasonable interest rate in the name of the SHG of which they are members. The SHGs are thus the building blocks of organisation of the rural poor.