Exams › SSC CGL (Prelims) › GK

Which of the following best describes the difference between SHGs and MFIs?

1. SHGs are non-profit organisations, while MFIs are for-profit organisations.
2. SHGs provide only credit, while MFIs provide a range of financial services.
3. SHGs are typically small, community-based organisations, while MFIs are larger and more formal institutions.
4. SHGs rely on government subsidies for funding, while MFIs rely on commercial sources of funding.

Correct answer: SHGs are typically small, community-based organisations, while MFIs are larger and more formal institutions.

Solution

Self-Help Groups (SHGs) are small, community-based groups formed by members for mutual support and savings. Microfinance Institutions (MFIs) are more formal organizations that provide financial services at a larger scale.

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