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


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1 Former General Manager NABARD, Mumbai. Email: drdhirendranabard@, India
     

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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’.

Keywords

Empowerment, Microfinance Institutions
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  • Deen Dayal Upadyay Antyodaya Yojana – National Rural Livelihoods Mission (2017): A Handbook on SHG - Bank Linkage, DAY – NRLM, Ministry of Rural Development, Government of India, New Delhi. Accessed from https://daynrlmbl.aajeevika.gov.in/ Circulars/Handbook%20on%20SHG.pdf
  • National Bank for Agriculture and Rural Development (2022): Status of Microfinance 2021-22, NABARD, Mumbai, July.
  • Reserve Bank of India (1996): Master Circular No. RPCD.No.PL.BC.120/04.09.22/95-96, April 2 on Linking of Self Help Groups with banks – Working Group on NGOs and SHGs- recommendations – Follow up, RBI, Mumbai.
  • Reserve Bank of India (2011): Report of the Sub-Committee of the Central Board of Directors of Reserve Bank of India to Study Issues and Concerns in the MFI Sector, RBI, Mumbai. Accessed from https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/ YHMR190111.pdf.
  • Reserve Bank of India (2022): Master Direction – Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, Notification, RBI/DOR/2021-22/89 – DoR.FIN.REC.95/03.10.038/2021-22, RBI, Mumbai. Accessed from https://rbi.org. in/Scripts/NotificationUser.aspx?Id=12256 & Mode=0.
  • The International Initiative for Impact Evaluation (2020): Impact Evaluation Brief: Social Protection, Impact Evaluation of the National Rural Livelihoods Project, 3ie. Accessed from https://www.3ieimpact.org/sites/default/files/2020-10/NRLPNRLM-IE-Brief.pdf

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

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Authors

Dhirendra Srivastava
Former General Manager NABARD, Mumbai. Email: drdhirendranabard@, India

Abstract


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’.

Keywords


Empowerment, Microfinance Institutions

References