The Microfinance Review

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SHG-Bank Linkage Programme A Case Study


Affiliations
1 DGM & FM NABARD, BIRD Lucknow, India
     

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The self-help group - bank linkage programme (SBLP) and microfinance institutions (MFIs) are the two models of microfinance delivery in India. The SBLP covers about 56% of all microfinance space, and the remaining 44% are enveloped by MFIs. This study examined various relevant aspects of SBLP with respect to Dhenkanal district of Odisha, as a case study. All of the sample SHG members had opened savings bank accounts in their respective banks and believed that SHGs were useful for promoting savings and availing bank loans. More than 80% of them availed repeat loans. Above 90% of the loan amount were largely utilised for productive purposes in existing household economic activities. At the branch level, SHG’s saving balance was more than 30% of SHG outstanding loans. More than 40% of savings-linked SHGs had not availed credit from their respective branches because of their unwillingness to avail loan. Non availability of regular and timely interest subvention was one of the reasons for their unwillingness to avail bank loans.

Keywords

Financial Services, Microfinance, Mission Shakti.
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  • Deshpande, D V, K C Sharma and G Rout (2015): “Comparative Study of Self-Help Group Bank Linkage Model and Microfinance Institution Model in Raibareli District of Uttar Pradesh”, THE MICROFINANCE REVIEW, Vol. 7, No. 2, pp. 159-168.

  • Government of Odisha (2023): Department of Mission Shakti, Government of Odisha. https://missionshakti.odisha.gov.in/about-us/overview, February 21, 2023 (15.00 Hrs).

  • National Bank for Agriculture and Rural Development (2023): Potential Linked Credit Plan (PLP) Dhenkanal 2023-24, NABARD, Odisha Regional Office, Bhubaneswar.

  • National Bank for Agriculture and Rural Development (2022): Status of Microfinance in India 2021-22, Micro Credit Innovation Department, NABARD, Mumbai.

  • National Bank for Agriculture and Rural Development (2016): Status of Microfinance in India 2015-16, Micro Credit Innovation Department, NABARD, Mumbai.

  • Reserve Bank of India (2022): Master Circular on SHG-Bank Linkage Programme, RBI/2022-23/02-FIDD.CO.FID.BC.No.1/12.01.033/2022-23 dated April 01, RBI, Mumbai.

  • Reserve Bank of India (2020): Master Circular - Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), RBI/2020-2021/39 FIDD.GSSD.CO.BC.No.06/09.01.01/2020-21, September 18, RBI, Mumbai.

  • Reserve Bank of India (2017): Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) - Aajeevika - Interest Subvention Scheme, circular FIDD.GSSD.CO.BC. NO.13/09.01.03/2016-17 dated August 25, 2016, RBI, Mumbai. https://www.google.com/search?q=interest+subvention+in+SHG+Odisha&oq=interest+subvention+in+SHG+Odisha&aqs=chrome.69i57.10241j0j4&sourceid=chrome&ie=UTF-8 dated 21 February 2023 (21.00 Hrs).

  • Sa-Dhan (2021): The Bharat Microfinance Report 2021, Sa-Dhan, New Delhi.

  • UCO Bank (2022): Agenda Note & Background Papers for 167th SLBC Meeting, State Level Bankers Committee, Odisha, June 23.


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  • SHG-Bank Linkage Programme A Case Study

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Authors

Gyanendra Rout
DGM & FM NABARD, BIRD Lucknow, India

Abstract


The self-help group - bank linkage programme (SBLP) and microfinance institutions (MFIs) are the two models of microfinance delivery in India. The SBLP covers about 56% of all microfinance space, and the remaining 44% are enveloped by MFIs. This study examined various relevant aspects of SBLP with respect to Dhenkanal district of Odisha, as a case study. All of the sample SHG members had opened savings bank accounts in their respective banks and believed that SHGs were useful for promoting savings and availing bank loans. More than 80% of them availed repeat loans. Above 90% of the loan amount were largely utilised for productive purposes in existing household economic activities. At the branch level, SHG’s saving balance was more than 30% of SHG outstanding loans. More than 40% of savings-linked SHGs had not availed credit from their respective branches because of their unwillingness to avail loan. Non availability of regular and timely interest subvention was one of the reasons for their unwillingness to avail bank loans.

Keywords


Financial Services, Microfinance, Mission Shakti.

References