Which of the following is a difference between self-help groups (SHGs) and microfinance institutions (MFIs) in India?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. SHGs are typically small, community-based organisations, while MFIs are larger and more formal institutions.
The key difference between Self-Help Groups (SHGs) and Microfinance Institutions (MFIs) in India is that SHGs are typically small, community-based organisations, while MFIs are larger and more formal institutions.
- SHGs:These are small, grassroots groups where members pool their savings and provide microloans to each other based on collective responsibility, often focusing on social empowerment alongside financial assistance.
- MFIs: These are larger, often for-profit organisations that provide microloans to individuals or groups, with a more structured approach to credit assessment and collection compared to SHGs.