NCERT Economics Class 10 | Self-Help Groups for the Poor Notes
Topic & sub-topics covered: Self-Help Groups for the Poor: Money and Credit (All single detail notes are exam-oriented).
We have discussed in-depth and exam-oriented pointers that can be asked in the board exam of class 10th about “Self-Help Groups for the Poor” which is taken from the NCERT Economics notes for class 10th chapter 3 “Money and Credit“.
Download the NCERT Economics for Class 10th Chapter 3 Money and Credit Notes PDF
Looking to grasp the concepts of money and credit in NCERT Economics for Class 10th? Look no further! Download the comprehensive Chapter 3 Money and Credit Notes PDF now and unlock a treasure trove of knowledge.
NCERT Class 10 Economics Chapter 3 Money and Credit Class 10th PDF Notes
Delve into the intricacies of monetary systems, explore the role of credit in the economy, and understand the mechanisms of banking and financial institutions. Our meticulously prepared notes provide concise explanations, illustrative examples, and insightful analysis to deepen your understanding of this crucial subject. With a clear focus on exam preparation and academic excellence, our PDF notes offer a structured approach to learning, helping you grasp complex concepts with ease.
Gain confidence in your knowledge and ace your exams with the help of our top-quality study material. Don’t miss out on this opportunity to elevate your learning experience – download the NCERT Economics for Class 10th Chapter 3 Money and Credit Notes PDF today!
Self-Help Groups for the Poor
1. Dependency on Informal Credit:
- Poor households often rely on informal sources of credit due to limited access to formal banking facilities in rural areas.
- Obtaining loans from banks is challenging for the poor as it requires proper documentation and collateral, which they often lack.
2. Challenges with Bank Loans:
- Banks demand collateral and proper documentation for loan approval, making it difficult for the poor to meet these requirements.
- Lack of collateral acts as a major barrier for poor individuals seeking loans from banks.
3. Role of Moneylenders:
- Moneylenders provide loans to the poor without collateral, leveraging personal relationships and flexibility in repayment terms.
- However, moneylenders impose exorbitant interest rates, maintain no transaction records, and often harass borrowers.
4. Introduction of Self-Help Groups (SHGs):
- SHGs are formed to organize the rural poor, especially women, and pool their savings to provide loans within the group.
- Typically comprising 15-20 members, SHGs enable members to access small loans at lower interest rates compared to moneylenders.
5. Functions of SHGs:
- SHGs decide on loan disbursement, amount, purpose, interest rates, and repayment schedules democratically.
- Members collectively bear the responsibility for loan repayment, fostering a sense of accountability and solidarity within the group.
6. Benefits of SHGs:
- SHGs address the collateral problem by allowing members to access loans based on group savings and repayment track records.
- Timely access to affordable loans enables SHG members to invest in income-generating activities and acquire assets, leading to financial empowerment and poverty alleviation.
7. Social Impact of SHGs:
- SHGs serve as platforms for discussing and addressing social issues such as health, nutrition, and domestic violence, promoting community development and women’s empowerment.
Grameen Bank of Bangladesh
1. The success of Grameen Bank:
- Grameen Bank of Bangladesh is renowned for its success in providing credit to the poor at reasonable rates.
- Established in the 1970s as a small project, it has grown significantly, with over 9 million members across 81,600 villages by 2018.
2. Focus on Women and the Poor:
- Grameen Bank primarily serves women from the poorest sections of society, emphasizing their reliability as borrowers.
- The bank’s success highlights the potential of poor women to initiate and manage various small income-generating activities effectively.
3. The scale of Impact:
- By extending credit to millions of individuals engaged in small pursuits, Grameen Bank has contributed significantly to socio-economic development.
- The bank’s model demonstrates how empowering the poor with access to credit can lead to substantial positive outcomes at the grassroots level.
4. Quotable Insight:
- The statement emphasizes the transformative potential of providing appropriate and reasonable credit terms to millions of small-scale entrepreneurs, emphasizing the cumulative effect of their efforts on development.
Summary
1. Modern Forms of Money and Banking:
- Understanding the connection between modern forms of money and the banking system is crucial.
- Depositors entrust their money to banks, while borrowers access loans from these banks to facilitate economic activities.
2. Role of Credit in Economic Activities:
- Economic activities often necessitate loans or credit to sustain operations and promote growth.
- Credit can have both positive and negative impacts on borrowers, depending on the circumstances.
3. Formal and Informal Sources of Credit:
- Credit can be sourced from formal institutions like banks and cooperative societies, or from informal sources.
- Terms of credit differ significantly between formal and informal lenders, influencing the cost and accessibility of loans.
4. Need for Increased Formal Sector Credit:
- Currently, formal sector credit is predominantly accessed by richer households, leaving the poor reliant on costly informal credit.
- It’s imperative to boost total formal sector credit to reduce dependence on expensive informal credit sources.
5. Equitable Distribution of Formal Credit:
- Efforts should be made to ensure that a larger proportion of formal loans reaches the poor, promoting inclusive development.
- Enhancing access to formal credit for the poor through banks and cooperatives is vital for fostering economic growth and reducing poverty.
Next & Previous Topics of NCERT/CBSE Economics Class 10 Chapter 3: Money and Credit
FAQ
Q1. Why do poor households often resort to informal sources of credit?
Answer: Poor households lack access to formal banking facilities in rural areas and struggle with bank loan requirements like collateral and documentation.
Q2. What role do moneylenders play in providing credit to the poor?
Answer: Moneylenders offer loans without collateral, but their high-interest rates and lack of transaction records pose challenges for borrowers.
Q3. How do Self-Help Groups (SHGs) address the credit needs of the poor?
Answer: SHGs organize rural poor, pool savings, and offer small loans at lower rates compared to moneylenders, fostering financial empowerment and community development.
Q4. What distinguishes Grameen Bank’s success in providing credit to the poor?
Answer: Grameen Bank serves millions of poor women effectively, emphasizing their reliability as borrowers and contributing significantly to socio-economic development.
Q5. What is the scale of Grameen Bank’s impact?
Answer: By extending credit to millions engaged in small pursuits, Grameen Bank showcases the transformative potential of providing reasonable credit terms to the poor.