Question

How does the SHG-Bank Linkage Program (SBLP) support SHGs in India?

• A. By allowing SHGs to operate as commercial banks
• B. By linking SHGs with formal banks to provide collateral-free microloans
• C. By providing SHGs with high-interest loans from the government
• D. By merging SHGs with private corporations

Answer 1

Answer:

B. By linking SHGs with formal banks to provide collateral-free microloans

The SHG-Bank Linkage Program (SBLP), initiated by NABARD, connects SHGs to formal financial institutions, enabling them to access collateral-free loans. This enhances the financial inclusion of rural and low-income populations, particularly women.