Social Science (087) — CBSE Class 10 board question

Functions of Self Help Groups (SHGs):

1. Pooling savings: SHGs organise 15–20 rural poor members (mainly women) who save regularly. Members can take small loans from the group at lower interest rates than moneylenders.

1. Access to bank credit: After regular savings for 1–2 years, the group becomes eligible for bank loans to create self-employment opportunities — buying seeds, cattle, sewing machines, housing materials, etc.

1. Overcoming collateral problem: Banks lend to SHGs even without individual collateral, as the group collectively ensures loan repayment.

1. Social platform: Regular meetings provide a forum to discuss social issues like health, nutrition, and domestic violence, helping women become financially and socially self-reliant.

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

---

• Examiners expect 3–4 distinct functions for 3 marks — one point per mark.
• Use the textbook language: "pool savings," "collateral," "self-employment," "social issues."
• Avoid vague statements; link each function to how it helps the poor specifically.
• The key idea is that SHGs solve the collateral problem, provide cheap credit, and act as a social platform — these three together cover 3 marks neatly.