SHG Bank Linkage Programme – Path Traversed, Challenges and Way Forward

The self-help group - bank linkage programme (SHG-BLP) has completed three decades. The programme, which aimed at social and economic empowerment of women in rural areas, has innumerable success stories to its credit, and is often referred to as the world’s largest microfinance programme. However, as is natural for every development intervention, the programme is now encountering many challenges. Meanwhile, the socioeconomic conditions in rural India have changed rapidly in the last three decades, and SHGs, as vehicles for women empowerment, are becoming a bit redundant. Further, the landscape of microfinance has also changed during last three decades with loans from microfinance institutions (MFIs) emerging as a strong alternative to credit through SHGs. Therefore, a time has come to think of reinvigorating the SHGs through realignment of member composition, facilitating transition of willing and eligible members of SHGs as entrepreneurs and rekindling the spirit of SHGs through adoption of ‘Panchsutra’.