Bank Credit to Women Self-Help Groups

21 Dec 2024

Bank Credit to Women Self-Help Groups

Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) has taken steps to support women’s Self-Help Groups (SHGs) to improve their business, use of technology, and access to finances.

About Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM)

Self-Help Groups

  • It is the Flagship Program of the Ministry of Rural Development (MoRD).
  • Objective: To reduce poverty by empowering the poor, especially women, through self-help groups (SHGs) and access to financial services and livelihoods.
  • Origin: Restructured from Swarnajayanti Gram Swarojgar Yojana (SGSY) and renamed as DAY-NRLM in 2016.
  • This initiative offers funds to strengthen community institutions and financial management capacity.
    • The goal is to help SHG in building their track record to attract mainstream Bank finance.
  • Financial support provided by DAY-NRLM
    • Revolving Fund: SHGs receive Rs. 20,000 to Rs. 30,000. 
    • Community Investment Fund: SHGs can receive a Community Investment Fund of up to Rs. 2.50 lakh to improve their financial standing. 
    • Interest subvention: To reduce the cost of Bank loans, DAY-NRLM provides interest subvention to women SHGs, making credit more affordable.

Enroll now for UPSC Online Course

Online Marketing Platform for SHG Products

  • There is an online marketing platform for SHG products  i.e., www.esaras.in.
  • Objective: The aim of this platform is to ensure better access of SHGs to online marketing. 

  • Key Sub-Schemes and Initiatives
    • Start-up Village Entrepreneurship Programme (SVEP)
      • A sub-scheme under DAY-NRLM that supports SHG women or their family members to set up small businesses.
      • Key Statistics: 3.13 lakh rural enterprises were supported (as of October 2024).
    • Banking Correspondent Sakhis/Digipay Sakhis
      • SHG women are trained as Banking Correspondent Sakhis to improve access to banking services in rural areas.
      • Current Deployment: 1,35,127 Banking Correspondent Sakhis working under DAY-NRLM.

About Self-Help Groups

Self-Help Groups

  • SHGs are voluntary associations of economically disadvantaged individuals from similar socio-economic backgrounds.
  • An SHG typically includes 5 (minimum)  to 20 (maximum) members.
    • Members collaborate to solve common problems through mutual support and community action.
  • Origin of SHGs in India
    • 1984: Inspired by Prof. Yunus’s Grameen Bank model, SHGs were introduced for social mobilization.
    • NABARD’s Role: NABARD and NGOs initiated the SHG-Bank linkage program.
    • 1990: RBI recognized SHGs as an alternative credit model.   

Advantages of SHGs

  • Low Transaction Costs: Beneficial for both lenders and borrowers.
  • Women Empowerment: Encourages financial and social independence for women.
  • Reduced Informal Borrowing: Decreases reliance on local moneylenders.
  • Support by Corporates: Many companies promote SHGs for community development.

Check Out UPSC NCERT Textbooks From PW Store

Examples of Prominent SHGs in India

  • Mahila Arthik Vikas Mahamandal (MAVIM): Empowers women in Maharashtra through training and credit facilities.
  • Kudumbashree: Kerala-based program focused on women’s capacity building and income generation.
  • Bandhan-Konnagar: Provides microfinance services and livelihood support.
  • Bhagini Nivedita Gramin Vigyan Niketan (BNGVN): Promotes sustainable livelihoods through SHGs

  • No Collateral Requirement: Overcomes barriers to formal credit access.
  • Social Support: Platform for discussing and resolving common challenges.

Challenges Faced by SHGs

  • Beneficiary Identification: Difficulty in identifying and including the poorest individuals.
  • Training Gaps: Lack of quality training programs and expert trainers.
  • Financial Literacy Issues: Limited access to formal financial services.
  • Market Linkages: Poor integration with markets affects growth.
  • Community Support: Inadequate business environment and value chain support.

Government Initiatives and Policies Supporting SHGs

  • SHG-Bank Linkage Programme (SBLP): It is an initiative launched by the National Bank for Agriculture and Rural Development (NABARD) in 1992. 
    • Self-Help GroupsIt aims to provide financial inclusion to rural poor, especially women, by linking Self-Help Groups (SHGs) with formal banking institutions. 
  • Mission for Financial Inclusion (MFI): This initiative is a broader initiative to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.
  • Lakhpati Didi Initiative:  This initiative was launched in 2023 which  empowers women of self help groups to take multifaceted approaches to economic empowerment.
    • It encourages them to adopt sustainable livelihood practices and have annual household income exceeding Rs. 1,00,000. 

Enroll now for UPSC Online Classes

Way Forward

  • Advanced Technology:  SHG Should use better digital platforms for record-keeping, transactions, and communication 
  • Less reliance on informal lenders: This group, to reduce reliance on informal lenders and promote financial inclusion, should link it with financial institutions. 
  • Inclusive Approach:  SHGs should adopt an inclusive approach to ensure fair participation and benefits of members from diverse socio-economic backgrounds. 
  • Community Resource Person (CRP): There should be a trained CRP to guide SHGs in identifying beneficiaries, managing finances, and scaling activities. 

Archive Calendar

Mon Tue Wed Thu Fri Sat Sun
 123
45678910
11121314151617
18192021222324
25262728293031

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

Know about Physics Wallah

Physics Wallah is an Indian online education platform, that provides accessible & comprehensive learning experiences to students of classes 6 to 12 and those preparing for JEE and NEET exams. We also provide extensive NCERT solutions, sample papers, NEET, JEE Mains, BITSAT previous year papers, which makes us a one-stop solution for all resources. Physics Wallah also caters to over 3.5 million registered students and over 78 lakh+ Youtube subscribers with 4.8 rating on its app.

We Stand Out because

We successfully provide students with intensive courses by India's qualified & experienced faculties. PW strives to make the learning experience comprehensive and accessible for students of all sections of society. We believe in empowering every single student who couldn't dream of a good career in engineering and medical field earlier.

Our Key Focus Areas

Physics Wallah’s main focus is to create accessible learning experiences for students all over India. With courses like Lakshya, Udaan, Arjuna & many others, we have been able to provide a ready solution for lakhs of aspirants. From providing Chemistry, Maths, Physics formulae to giving e-books of eminent authors, PW aims to provide reliable solutions for student prep.

What Makes Us Different

Physics Wallah strives to develop a comprehensive pedagogical structure for students, where they get a state-of-the-art learning experience with study material and resources. Apart from catering students preparing for JEE Mains and NEET, PW also provides study material for each state board like Uttar Pradesh, Bihar, and others.

Aiming for UPSC?

Download Our App

# #
Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

<div class="new-fform">






    </div>

    Subscribe our Newsletter
    Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.
    *Promise! We won't spam you.
    Yes! I want to Subscribe.