4.7. Measures Taken by the Government to Promote the SHGs

♤ Self Help Group-Bank Linkage Programme: On the recommendations of SK Kalia Committee, the SHG-Bank linkage programme was started at the initiative of NABARD in 1992 to link the unorganised sector with the formal banking sector. Under this programme, banks were allowed to open savings accounts for Self-Help Groups (SHGs). Banks provide loans to the SHGs against group guarantee and the quantum of loan could be several times the deposits placed by such SHGs with the banks. Banks should consider entire credit requirements of SHG members, namely,

(a) income generation activities,

(b) social needs like housing, education, marriage, etc. and

It is being implemented by commercial banks, regional rural banks (RRBs), and cooperative banks.

♤ The RBI took a series of measures in April 1996 to give a thrust to micro finance based Lending under the SHG-bank Linkage programme. Over 103 million rural households have now access to regular saving through 7.96 million SHGs linked to benefit.

♤ Priority Sector Lending: GOI has included SHG as a priority sector to mandate and enhance banks focus on them. Bank credit to members of SHGs is eligible for priority sector advance under respective categories viz., Agriculture, Micro, Small and Medium Enterprises, Social Infrastructure and Others.

♤ SHG, have been allowed to run grain banks to secure the food security in food & care regions.

♤ Priyadarshini scheme, with NABARD as the nodal agency, has aimed at women empowerment and livelihood enhancement through SHGs.

♤ Deendayal Antodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM): It seeks to alleviate rural poverty through building sustainable community institutions of the poor. Mission closely works with the Department of Financial Services (DFS), Reserve Bank of India (RBI) and the Indian Bank Associations (IBA) to provide bank credit to SHGs. The financial year 2017-18 has seen more than 82 lakh households mobilized into 6.96 lakh Self Help Group (SHGs) across the country. Cumulatively, more than 4.75 crore women have been mobilized into more than 40 lakh SHGs. The mission also provides Interest Subvention to women SHGs availing bank loans amounting to Rs.3.00 lakhs, to subsidize the cost of borrowing. The interest subvention effectively reduces the cost of borrowing to 7% per annum.

♤ Mahila Kisan Shashaktikaran Pariyojana: In order to promote agro-ecological practices that increase women farmers’ income and reduce their input costs and risks, the DAY-NRLM Mission has been implementing the Mahila Kisan Shashaktikaran Pariyojana (MKSP). As of March 2018, more than 33 lakh women farmers were being supported under this scheme.