They work like a committee of trust, yaar! Ten-twenty people save a small amount monthly, building a pool. Banks then loan to the group based on that collective guarantee, not collateral.
But from my B.Com class, I've learned the reality can be messy. My cousin didi in her village group couldn't get her share for a sewing machine because another member's husband had a pending loan! The group pressure is the real collateral, and sometimes it squeezes the most needy.
Chai-peene aana, main batata hoon uski kahani!
#money#career
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