Economics • Banking & FinanceMedium
How do Micro Credit and Self-Help Groups (SHGs) function within the institutional banking framework promoted by the Haryana State Rural Livelihoods Mission?
A. By mobilizing internal savings and facilitating bank linkages for collateral-free microloans to women entrepreneurs✓ Correct Answer
B. By operating high-frequency algorithmic trading desks on the Bombay Stock Exchange
C. By collecting direct corporate income taxes from multinational IT firms in Gurugram
D. By issuing municipal bonds for urban metro rail expansion projects
💡 Solution & Explanation
Self-Help Groups empower rural women in Haryana by pooling small thrift savings and leveraging collateral-free bank loans through institutional linkages to fund livelihood activities like dairy farming and handicrafts. The Haryana State Rural Livelihoods Mission actively fosters these community institutions to alleviate rural poverty and enhance financial inclusion. Microfinance through SHG-bank linkage models boasts high repayment rates compared to traditional unsecured lending.
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