Comparative Study of Self-Help Group Bank Linkage Model and Microfinance Institution Model in Raibareli District of Uttar Pradesh

There are mainly two models of microfinance delivery in India - SHG Bank Linkage Programme (SBLP) and Micro Finance Institutions (MFIs). Broadly speaking, SBLP covers about 72% of all microfinance loans in the country and remaining 28% are covered by MFIs. However, the issue of Non- Performing Assets (NPAs) remains vital in both the models. This study examined various aspects of recovery performance of microfinance clients and other relevant aspects. The study is based on a comparison of SBLP supported by Rajiv Gandhi Mahila Vikas Pariyojana (RGMVP) and Sonata Finance Private Limited, a MFI operating in Raibareli district of Uttar Pradesh. The findings show that recovery from members of both RGMVP SHGs and Sonata Groups is high. The cases of multiple financing are very few in the study area. The findings support the view that if an initiative like RGMVP is present, problem of NPAs in SBLP can be addressed properly.