Consider the following statements : 1. The Self-Help Group (SHG) programme was originally initiated by the State Bank of India by providing microcredit to the financially deprived. 2. In an SHG, all members of a group take responsibility for a loan that an individual member takes. 3. The Regional Rural Banks and Scheduled Commercial Banks support SHGs. How many of the above statements are correct?
- (a) Only one
- (b) Only two ✓ UPSC's answer
- (c) All three
- (d) None
Why the answer is (b)
• Statement 1 is wrong: the SHG–Bank Linkage Programme was initiated by NABARD in 1992 as a pilot, building on MYRADA's experience, not by the State Bank of India.
• Statement 2 is correct: SHGs work on joint liability — the group as a whole stands responsible for repayment of a loan taken by any member, which substitutes for collateral.
• Statement 3 is correct: Regional Rural Banks, scheduled commercial banks and cooperative banks lend to SHGs under the linkage programme, refinanced by NABARD.
• India's SHG movement, now under the DAY-NRLM, covers over 10 crore women.
• Hence two statements, option (b).
Why the other options are wrong
- (a) Only one
- Statements 2 and 3 are both correct, giving two.
- (c) All three
- Statement 1 is wrong: NABARD, not SBI, initiated the programme.
- (d) None
- Statements 2 and 3 are correct.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2023, held on 28 May 2023. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.