what is the basic idea behind the shgs for the poor explain in your own words

The basic idea behind Self-Help Groups (SHGs) for the poor is to empower marginalized people, especially in rural areas, by enabling them to collectively save money and access credit without needing collateral. SHGs are small groups of 10-20 members from similar socio-economic backgrounds who pool their savings regularly into a common fund. This fund is then used to provide loans to members at reasonable interest rates, much lower than informal moneylenders charge. This helps protect poor people from exploitation and provides them with affordable credit to start small businesses or income- generating activities, leading to self-employment and economic upliftment. Moreover, SHGs serve as a platform for members to discuss and address social issues such as health, nutrition, and domestic violence, fostering community solidarity and empowerment. When SHGs function well, they become eligible for bank loans, which further enhances their financial capacity. Overall, SHGs promote financial inclusion, self-reliance, and social empowerment among the poor, helping them break the cycle of poverty