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The search for alternative ways to help SHGs comes in the light of massive growth in women’s groups and bank credit, with the Centre concluding that credit supply can be bettered by removing the existing bottlenecks in availing loans from regular banking system. The key reasons behind continuing existence of obstacles to availing of loans are inadequate banks in the hilly and north-eastern regions and the fact that SHGsrun institutions don’t always meet the strict bank criteria of “working capital”.
To be set up by rural development ministry that runs National Rural Livelihoods Mission, the expert panel is likely to be headed by G C Chaturvedi, former secretary to the government of India. At present, over 26 lakh SHGs are connected to banks, helped by an outstanding credit of nearly Rs 70,000 crore.
What has encouraged the government to look for their further growth is the fact that NPAs with SHGs stand at a low 2.4%. The NRLM seeks to help women’s groups start productive enterprises with bank credit, with the larger objective of removing rural poverty. It is catering to over five million SHGs across the country. Essentially a phenomenon of south India, the SHGs have spread to northern and eastern regions at a good pace.
While a dedicated bank for SHGs is an option that the expert panel would explore, an alternative high on the ministry’s list is replicating the model of ‘Streenidhi Credit Cooperative Federation’ — an apex society of federations of SHGs in Andhra Pradesh. The AP experiment is seen as successful with ‘Streenidhi’ emerging as a key body supplementing the credit requirements of women’s groups