Loans to women self-help groups at 7%

• The Reserve Bank asked banks to provide loans to women self-help groups (SHGs) at 7% per annum, as per the government's revised guidelines for 2016-17.
• All women SHGs will be eligible for interest subvention on credit up to Rs 3 lakh at 7% per annum (under Deendayal Antyodaya Yojana-National Rural Livelihoods Mission).
• SHGs availing capital subsidy under SGSY in their existing credit outstanding will not be eligible for benefit under this scheme. The banks will lend to all the women SHGs in rural areas at 7% in 250 districts
• Further, the SHGs will be provided with an additional 3% subvention on the prompt repayment of loans. For the purpose of interest subvention of additional 3% on prompt repayment, an SHG account will be considered prompt payee if it satisfies the following criterion as specified by RBI.

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. Usually, the number of members in one SHG does not exceed twenty.
• Objective:
• To meet the credit needs of the poor by combining flexibility, sensitivity and responsiveness of the informal credit system with the strength of technical and administrative capabilities and financial resources of the formal credit institutions.
• To build mutual trust and confidence between the bankers and the rural poor.
• To encourage banking activity both on thrift as well as credit side in a segment of the population that the formal financial institutions usually find difficult to cover.

About Deen Dayal Antyodaya Yojana – NRLM

• Aajeevika – National Rural Livelihoods Mission (NRLM) was launched by the Ministry of Rural Development (MoRD) in June 2011. Aided in part through investment support by the World Bank, the Mission aims at creating efficient and effective institutional platforms of the rural poor, enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.
• Under the scheme, the poor would be facilitated to achieve increased access to rights, entitlements and public services, diversified risk and better social indicators of empowerment.
• In November 2015, the program was renamed Deen Dayal Antayodaya Yojana (DAY-NRLM).
• The targets is training 0.5 million people in urban area per annum from 2016 and in rural area it is training 1 million people by 2017. Further, in urban areas services like SHG promotion, training centres, vendors markets, permanent shelters for homeless will be provided for.

By: Vishal