Correct Option
The correct option is Eligibility for availing bank loans.
Explanation
Self-Help Groups (SHGs) are voluntary associations of the poor, primarily women, formed to address common problems through mutual help. The fundamental operational principle of SHGs is thrift and credit. The SHG-Bank Linkage Programme (SBLP), pioneered by NABARD, integrates these informal groups with the formal banking sector.
Detailed Analysis
- Eligibility for availing bank loans is Correct: The primary benefit of maintaining regular savings is to establish financial discipline and build a corpus. Under the SHG-Bank Linkage Programme, banks extend loans to SHGs based on their savings performance and internal lending history. Regular savings serve as a proxy for collateral and creditworthiness, making the group eligible for bank loans (often in a ratio to their savings, e.g., 1:4 or 1:6).
- Dissolution by government is Incorrect: Regular savings strengthen the group's sustainability. Dissolution by the government is a punitive or administrative action and is not a benefit of savings.
- Conversion to a private limited company is Incorrect: While mature SHGs may evolve into federations or Producer Companies, the immediate and primary purpose of regular savings is not conversion into a private limited company. Such conversion requires complex legal compliance under the Companies Act.
- Cessation of new membership is Incorrect: Savings do not lead to the cessation of new membership. Membership dynamics are governed by the group's bylaws and mutual agreement, not merely by the act of saving.
Key Takeaway: The "Savings First, Credit Later" model is the cornerstone of SHGs. Regular savings demonstrate financial discipline and group cohesion, which are the mandatory prerequisites for accessing formal credit without collateral under the SHG-Bank Linkage Programme.