Economics • Banking & FinanceHard
Examine the role of Self-Help Group (SHG) bank linkage programs, spearheaded by NABARD and implemented through regional banks in Himachal Pradesh, in promoting women's financial empowerment. What is the core economic mechanism of this model?
A. Pooling member savings to build internal lending capacity, subsequently leveraging institutional bank credit for micro-enterprises✓ Correct Answer
B. Issuing corporate equity shares on international stock exchanges
C. Collecting direct corporate income taxes from large hydroelectric projects
D. Managing municipal bond issuances for urban municipalities
💡 Solution & Explanation
The SHG-bank linkage model empowers rural women by encouraging regular thrift savings within peer groups, which then serve as collateral to secure institutional bank loans for income-generating micro-enterprises. This grassroots financial inclusion model has significantly elevated rural women's economic participation in Himachal Pradesh. It operates independently of stock exchanges and municipal bond markets.
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