Agriculture and Rural Development Rural Development

Ensure that the loans to Women Self Help Groups would be available at low interest rates.

Last Updated: Friday 16 February 2018
Friday 16 December 2016Lok Sabha

The UPA-2 Government has - in 2013 - introduced an interest subvention scheme for women self-help groups. On December 2, 2015, the Union Cabinet chaired by the Prime Minister Shri Narendra Modi gave its approval for changes in the rural welfare programs for expanding the benefits of interest subvention under National Rural Livelihood Mission (NRLM) to 100 more districts.

The interest subvention to all women SHGs to avail loans up to Rs. 3 lakh from Banks at the interest rate of 7% per annum and also an additional subvention of 3% for prompt repayment, bringing the effective rate of interest to 4% has been being extended to 100 more districts from the 2015-16 financial year.

The criteria for identification of districts is as follows:

  • all new districts declared as Integrated Action Plan (IAP) districts which were not covered in the earlier list of 150 districts will be included in the list.
  • the remaining districts will be allocated to the States on a pro-rated basis in proportion to the total number of districts in the State/UT. The States will identify the eligible districts from among the IAP districts of NRLM.
  • The States have been granted flexibility to have only a single allocation under NRLM, based on poverty ratio.

The details of amount of loans disbursed to Women Self Help Groups (WSHGs) during 2013-16 are as under:

  • 2013-14: Rs. 21,037.97 crores
  • 2014-15: Rs. 24,419.75 crores
  • 2015-16: Rs. 34,411.42 crores

In August 2016, the Government announced their plans to provide loans worth Rs. 90,000 crores in next couple of years to Women Self-Help Groups (SHGs) for non-farm economic activities. NRLM is an innovative flagship program designed to alleviate rural poverty in a time-bound manner. Launched in 2011, the Mission aims at mobilizing all rural poor households into self-managed Self Help Groups (SHG) and federations which, in turn, promote the livelihoods of the poor.

The Centrally Sponsored Mission is currently being implemented in 3,157 blocks across 462 districts by all states and Union territories in a phased but intensive manner. As of July 2016, 324 lakh rural poor households stood mobilized into 26.94 lakh SHGs, which are in turn, federated into 1.45 village organizations. The states have set-up dedicated implementation structures at the state, district and block levels and have engaged more than 20,000 dedicated professionals and about 1 lakh community professionals to implement the Mission.

The Mission has provided a capital grant of about Rs. 3,170 crores to the SHGs and federations in the form of revolving fund, community investment fund and interest subsidy to support the livelihoods of the poor. The cumulative own savings of SHGs facilitated by the Mission in intensive blocks alone account for over Rs. 10,665 crores (up to July, 2016). More significantly, the SHGs have leveraged Rs. 83,153 crores of bank credit since 2013-14. The financial services catalyzed by the Mission coupled with the technical livelihood support services provided are securing livelihoods, reviving local economies and empowering women across the country.

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