Who takes the important decisions of SHGs and why?
- Most of the important decisions regarding the savings and loan activities are taken by the group members.
- The group decides as regards the loans to be granted—the purpose, amount, interest to be charged, repayment schedule, etc.
- It is the group which is responsible for the repayment of the loan.
- In case of default by any one member, it is followed up seriously by other members in the group.
- Because of this feature, banks are willing to lend to the poor women when organised in SHGs even though they have no collateral as such.