Impact and Sustainability of SHG-Bank Linkage Programme (SBL) in Andhra Pradesh:A Diagnostic Study on Indira Kranthi Patham (IKP) Project

Financial Inclusion in not new to India. As a part of efforts to reach rural areas, India established regional rural banks in 1970s and as a supplement to it, in the 1980s social entrepreneurs created the self-help group (SHG)-Bank Linkage programme, whereby commercial banks were encouraged to lend funds to groups of 10-12 women groups. The SHG movement received considerable national policy support led by the National Bank for Agricultural and Rural Development (NABARD) and its combination with priority sector lending policies stimulated the banking system to lend to SHGs. The paper seeks to examine the development of self-help groups (SHGs) through SHG-Bank Linkage Programme (SBL) in Andhra Pradesh and their role in financial services delivery and the impact of SHGs on the lives of rural people in Andhra Pradesh, very specifically the SHGs under Indira Kranthi Patham (IKP). The objectives set for the study include analyzing the SBL'S microfinancing outreach and performance in terms of savings and access to credit; assessing the impact of SHG activities on economic and social activities to empower SHG members socially; and finally to trace sustainability factors for the existence and growth of SHGs under IKP. The study has drawn inputs extensively from recent literature on SHGs, very specifically from the Annual Reports of IKP and this has been supplemented by the findings of various published reports, internal evaluations, project submissions, workshop presentations and proceedings.