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CS Professional · CSR and Social Governance · Contribution of Non-Corporate Entities in Social Governance

Twelve women in a village in Tamil Nadu pool a fixed small sum every month into a common fund, lend from it to members for household needs, and keep written minutes of their weekly meetings. They are not registered under any statute. Which description best fits this group?

The group is an informal Self-Help Group. Members pool regular savings, lend internally and meet routinely, which are the hallmarks of an SHG. Since it is unregistered, it is not a cooperative, producer company or trust, all of which require formal registration under a specific law.

  1. AAn informal Self-Help Group built on thrift and internal lendingCorrect
  2. BA producer company under the Companies Act, 2013
  3. CA registered cooperative society with limited liability
  4. DA public charitable trust with a board of trustees

Explanation

A Self-Help Group is a small voluntary association, often of 10 to 20 members, formed around thrift, mutual credit and joint decisions, and it can function without formal registration. The group has no statute-based registration, so it is not a producer company, cooperative society or trust.

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