MENU
Question -

Explain the role of micro-credit in meeting credit requirements of the poor.



Answer -

Credit offered to poor through the SHGs (Self Help Groups) and non-governmental organisations is known as micro finance organisations and they offer micro credit. The SHGs play a significant role in meeting credit requirements of the poor and also encourage savings among the rural people. Money is pooled from the individual accounts of many farmers to finance the requirements of members. Finance done from SHGs reduce cost of transaction for borrowers and lenders. The National Bank for Agricultural and Rural Development (NABARD) provides loan/credit at reduced rates. This type of finance is becoming the preferred choice for small farmers due to ease of credit and faster disbursal.

Comment(S)

Show all Coment

Leave a Comment

Free - Previous Years Question Papers
Any questions? Ask us!
×