Economics • Banking & FinanceMedium
In the context of priority sector lending in Uttarakhand, what role do Self-Help Groups (SHGs) play in credit linkage programs promoted by banks and NABARD?
A. They act as private equity venture funds for multinational corporations
B. They mobilize micro-savings and facilitate collateral-free group micro-credit disbursement to women entrepreneurs in rural hill communities✓ Correct Answer
C. They function as monetary policy committees determining the repo rate
D. They collect municipal property taxes on behalf of gram panchayats
💡 Solution & Explanation
Self-Help Groups empower rural women in Uttarakhand by inculcating thrift habits and enabling collateral-free bank loans for livelihood activities through the SHG-Bank Linkage Programme. NABARD and Uttarakhand Gramin Bank actively finance these collectives to foster local entrepreneurship. Social capital built within these groups ensures high loan repayment rates.
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