Odisha becomes first state to bring banking to remote rural areas through SHG

•  Odisha became the first state in the country to carry financial inclusion and extend banking services to unbanked areas through Self Help Groups (SHGs).
• The state government signed an agreement with State Bank of India in this regard.
• Around 70 per cent Gram Panchayats in Odisha do not have brick and mortar bank branches.
• In the first phase SHGs would be engaged as BCs (Business correspondents) in around 1,000 remote Gram Panchayats having no banking facilities and gradually it would be extended to 4,000 non-banked panchayats.
• Through this arrangement, people would get services like opening of bank accounts, cash deposits and withdrawals, Aadhaar-enabled payment, use of Rupay Cards and other banking facilities.
• The system would be of great help to people in rural areas under social security schemes like Pradhan Mantri Bima Surakshya Yojana, Pradhan Mantri Jeevan Jyoti Yojana, Atal Pension Yojana etc and would also be helpful in promotion of digital banking.

About SHG:

• Self-Help Group (SHG) is a small voluntary association of poor people, preferably from the same socio-economic background.
• They come together for the purpose of solving their common problems through self-help and mutual help.
• The SHG promotes small savings among its members.
• The savings are kept with a bank.
• This common fund is in the name of the SHG. SHG is a group formed by the community, which has specific number of members like 15 or 20.
• Usually, the number of members in one SHG does not exceed twenty. In such a group the poorest would come together for emergency, disaster, social reasons, economic support to each other have ease of conversation, social interaction and economic interactions.

Objectives of Self-Help Groups

• To sensitize people of target area for the need of SHG and its relevance in their empowerment process.
• To create group feeling among members.
• To enhance the confidence and capabilities of members.
• To develop collective decision making among members.
• To encourage habit of saving among members and facilitate the accumulation of their own capital resource base.
• To motivate members taking up social responsibilities particularly related to development.

By: Vishal