SHG Bank Linkage Programme

What is SHG?

Self Help Groups means a group which represents a financial intermediation, but the financial intermediation is not the only primary objective of the groups. The idea is to combine the access to low-cost financial services with a process of self management and development. They are ussually formed and supported by NGOs or Government agencies.

• SHGs may or may NOT be registered.
  
• Number of members is between 10-25. But, for irrigation projects there is no upper ceiling.
  
• One person from one family can become a member.
  
• There are regular weekly or fortnightly meetings.
  
• These members save the amount and this amount is used as loans.
  

What is SHG Bank Linkage Programme?

The Self-Help Group-Bank Linkage Programme (SBLP), which started as a pilot programme in 1992 has developed with rapid strides over the years.

• SHG-Bank Linkage Programme was started on the basis of recommendation
  of S K Kalia Committee.
  

Under the SBLP, the following three different models have emerged:

1. Model I: SHGs promoted, guided and financed by banks.
   
2. Model II: SHGs promoted by NGOs/ Government agencies and financed by banks.
   
3. Model III: SHGs promoted by NGOs and financed by banks using NGOs/formal agencies as financial intermediaries.
   

Model II has emerged as the most popular model under the SBLP programme. Commercial banks, co-operative banks and the regional rural banks have been actively participating in the SBLP.

Current Status of SHG-Bank Linkage Programme:

• In 2009-10, 1.59 million new SHGs were credit-linked with banks, and bank loan of ` 14,453 crore (including repeat loan) was disbursed to these SHGs. Further, at end-March 2010, 6.95 million SHGs maintained savings accounts with banks.
  
• On an average, the amount of savings per SHG was ` 8,915 as compared to the amount of credit outstanding of ` 57,795 in 2009-10. While there was a continued increase in the amount of credit outstanding per SHG, there was a fluctuating trend in the amount of saving per SHG in the recent years.