Differentiate between SHG and a cooperative - Social Science - Money and Credit

Question

Differentiate between SHG and a cooperative

Charu Kalra · Accepted Answer

Dear Student,

Self help groups (
SHG)
Cooperatives

a These groups
have been organised
by rural poor more so
by women in collecting money and in extending loans to its
members
Under
cooperatives, members pool in their resources, and from their
deposits they seek loans from the banks

b
SHG
charge less rate
of interest as compared with any other form of rural banking or
even those charged by moneylenders
The deposit from
the cooperatives serve as the collateral

c These groups
gradually can seek loans from the bank so as to create employment
opportunities for its members It is the group as a whole which is
responsible for the repayment of the loan
Loans sought from
the banks are extending to other members for the purchase of
agricultural equipment, for cultivation, trade etc
Example, farmers cooperatives,
weavers’ cooperatives

Regards

Self help groups ( SHG)	Cooperatives
a. These groups have been organised by rural poor more so by women in collecting money and in extending loans to its members.	Under cooperatives, members pool in their resources, and from their deposits they seek loans from the banks.
b. SHG charge less rate of interest as compared with any other form of rural banking or even those charged by moneylenders	The deposit from the cooperatives serve as the collateral.
c. These groups gradually can seek loans from the bank so as to create employment opportunities for its members.. It is the group as a whole which is responsible for the repayment of the loan.	Loans sought from the banks are extending to other members for the purchase of agricultural equipment, for cultivation, trade etc. Example, farmers cooperatives, weavers’ cooperatives

Differentiate between SHG and a cooperative.