Read the given passage carefully and answer the following questions. Certain parts have been highlighted to help answer the questions. Self- help grou...

Read the given passage carefully and answer the following questions. Certain parts have been
highlighted to help answer the questions.
Self- help groups (SHGs) play vital role in poverty eradication in Indian villages. A growing number of poor women in
different areas of India are members of Self Help Groups and they actively occupy in savings and credit, as well as activities
like income creation, natural resources management etc. The savings and credit hub in the SHG is the key component and
offers ability to create some control over capital and other investments. The SHG scheme has proven to be very successful
for women empowerment and offering to break slowly away from exploitation and isolation.
NABARD defines SHGs as “small, economically homogenous affinity groups of rural poor, voluntarily formed to save and
mutually contribute to a common fund to be lent to its members as per the group members’ decision”. A self-help group is
a village-based financial intermediary usually composed of 10–20 local women. Members make small regular savings aid
over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the members
or to others in the village for any reason. The Self Help Groups (SHGs) have become extensive, successful component of
both rural and urban development in India. Women band together in to groups and motivate each other to build new
opportunities for income generation. Most of the SHGs start without any outside financial capital by saving regular charity
by the members. These offerings can be very small. After a period of regular savings the SHGs start to give loans from
savings in the form of small in-house loans for micro enterprise activities and spending. Only those SHGs that have utilized
their own funds well are assisted with external funds through linkages with banks and other financial mediators.

What is/are the key functioning of self-help groups?