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SAI International School

                                                 Session- 2025-2026
                                                    Lesson notes-7

                                     Subject- Economics Ch- 3- MONEY AND CREDIT




                     Challenges with Formal Loans:
                       Banks not widely accessible in rural areas.
                       Strict documentation and collateral requirements


                     Advantages of Informal Loans:
                         Moneylenders offer loans without collateral but at high interest rates.
                         Personal acquaintance with borrowers simplifies lending process.

                     Introduction of Self-Help Groups (SHGs):
                        Organize rural poor, particularly women, into small groups.

                        Members pool savings and offer small loans internally.

                     Benefits of SHGs:
                        Loans provided at lower interest rates compared to moneylenders.
                        Encourages regular savings habits among members.
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