Social Science (087) — CBSE Class 10 board question

Self-Help Groups (SHGs) as Building Blocks of Rural Poor:

1. Pooling Savings: A typical SHG has 15–20 members from one neighbourhood who meet and save regularly (₹25–₹100 per month). Members can borrow from this pool at lower interest than moneylenders.

1. Overcoming Lack of Collateral: Poor households cannot access bank loans due to lack of collateral. SHGs solve this — after 1–2 years of regular savings, the group itself becomes eligible for a bank loan sanctioned in the group's name.

1. Self-Employment: Loans are used to buy seeds, fertilisers, raw materials (bamboo, cloth), sewing machines, handlooms, or cattle, creating income-generating opportunities.

1. Group Responsibility: Loan repayment is the group's collective responsibility, so members monitor each other, making banks willing to lend even without individual collateral.

1. Social Empowerment: Regular meetings provide a platform to discuss health, nutrition, and domestic violence, making women financially self-reliant and socially aware.

Example: Grameen Bank, Bangladesh — over 9 million mostly poor women borrowers proved that the poor are reliable and can run successful small enterprises.

Source: Chapter 3 — Self-Help Groups for the Poor

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• Examiners expect 5 distinct points for a 5-mark answer — one point per mark is the safest structure.
• Always mention: (i) pooling savings, (ii) no collateral needed, (iii) self-employment examples, (iv) group accountability, (v) social benefits.
• The Grameen Bank example adds value and shows application — include it briefly.
• Avoid vague statements; use specific figures (15–20 members, ₹25–₹100) from the textbook to show precision.