Disproportionate credit disbursement and weak bank credit linkages remain a persistent challenge for several States including Bihar, Jharkhand and Gujarat. Taking note of this, the Government has stepped in and is taking several steps to improve bank linkages of Self Help Groups (SHGs) across the country.
This lopsided focus reportedly is mostly due to credit disbursement remaining confined to the ‘usual gang of four States’ - Andhra Pradesh, Tamil Nadu, Karnataka and Kerala of this (SHG) credit.
As per the figures presented in NABARD’s report, “Status of Microfinance in India 2012-13”, over 35 lakh SHGS were saving linked and 68 per cent were credit linked in the Southern States. The corresponding figures for Uttar Pradesh, Rajasthan, Jharkhand, Maharashtra and Gujarat are over 20 lakh and 47 per cent respectively.
More specifically, Swarnjayanti Gram Swarozgar Yojana has been restructured as the National Rural Livelihoods (NRLM). NRLM, through a dedicated implementation mechanism under the State Rural Livelihood Missions (SRLM) is focusing on improving the quality of SHGs. Further, 177 districts and 1157 blocks have been selected as “intensive areas” by respective SRLM’s. Additionally, dedicated support staff has been recruited to facilitate SHG- Bank linkage in the intensive blocks across the country.
The RBI too released a circular on NRLM as “Priority Sector Lending-Restructuring of SGSY as National Rural Livelihood Mission – Aajeevika” which spells out various steps required to de-bottleneck the credit flow to the SHGs.
Seeking to enhance the flow of credit to SHGs, provision of Interest Subvention has been introduced under NRLM. In 150 districts all women SHGs will avail the credit at seven per cent and an additional three per cent subvention on prompt repayment.
In the remaining districts, the scheme will be extended to all NRLM complaint SHGs to enable them to avail credit at seven per cent on prompt repayment.
Under the Women Self Help Group (WSHG) scheme administered by NABARD, in 150 districts over 80,000 SHGs have been formed of which 20,000 have been credit linked.