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Justify the role of… (Class 10 Social Science 2023, Q33A)

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Social ScienceCBSE Class 10 · Board exam 2023, set 32/4/1 · 5 marks · Long answer

CBSE Class 10 Social Science 2023: question 33(A)

Set in the CBSE Class 10 board exam of 2023, paper 32/4/1, section D, question 33(A), for 5 marks. Try it first; the hints and our step-by-step solution are below.

Q33(A) · 5 marks · Long answerMoney and Credit

Justify the role of 'Self Help Groups' in the rural economy.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2023 board paper, set 32/4/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Think about who forms an SHG and what they do every month.

Hint 2

Compare the interest rate and collateral needs of SHG loans with those of moneylenders and banks.

Hint 3

Mention what the bank loan to the group is used for.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. SHGs mainly help the rural poor, especially women, who find it hard to get credit from banks. A typical SHG has 15-20 members from one neighbourhood who meet and save regularly.

    1 mark

  2. Each member saves about Rs 25 to Rs 100 or more, depending on ability. Members take small loans from the group's own savings to meet their needs.

    1 mark

  3. The group charges interest on these loans, but it is lower than the moneylender's rate. After a year or two of regular saving, the group becomes eligible for a bank loan.

    1 mark

  4. The bank loan is sanctioned in the name of the group. It creates self-employment, for example loans for releasing mortgaged land, buying seeds, fertilisers, bamboo or cloth, and assets like sewing machines, handlooms and cattle.

    1 mark

  5. The group itself decides the purpose, amount, interest and repayment schedule of loans. Poor households lack collateral for formal loans, so SHGs give them easy credit and save them from moneylenders' clutches.

    1 mark

Answer: SHGs promote savings, give cheap collateral-free credit, create self-employment, empower women and free the rural poor from moneylenders.

Where the marks are

  • Helps rural poor, especially women; group of 15-20 members saving regularly (1 mark)
  • Members' savings and small loans from the group (1 mark)
  • Lower interest than moneylenders; bank loan eligibility (1 mark)
  • Loan in the group's name for self-employment, with examples (1 mark)
  • Group takes decisions; no collateral problem; escape from moneylenders (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Money and Credit, one at a time, marked against the answer key and marking points.Back to the full paper2023 board paper, set 32/4/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.