Lok Sabha Question No. 4272 (UNSTARRED), answered on 2022-03-29
Subject: Strengthening of SHGs
Ministry: RURAL DEVELOPMENT
Asked by: Mohanbhai Kalyanji Kundariya, Rajeshbhai Naranbhai Chudasama

## GOVERNMENT OF INDIA MINISTRY OF RURAL DEVELOPMENT DEPARTMENT OF RURAL DEVELOPMENT

## LOK  SABHA UNSTARRED QUESTION NO. 4272

ANSWERED ON 29/03/2022

## STRENGTHENING OF SHGs

## 4272.   SHRI MOHANBHAI KALYANJI KUNDARIYA: SHRI RAJESHBHAI CHUDASAMA:

Will the Minister of RURAL DEVELOPMENT be pleased to state:

- (a) whether the Government has received any proposal to increase the number of Self Help Groups (SHGs) in the States and if so, the details and the response thereof;
- (b) whether the Government proposes to lower the interest rate on the advances given to these groups and keep it at par with the interest rate charged on crop loans;
- (c) if so,the details thereof;
- (d) whether the Government reviews the funds for SHGs from time to time and if so, the details thereof; and
- (e) the other steps taken by Government to strengthen the SHGs?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF RURAL DEVELOPMENT (SADHVI NIRANJAN JYOTI)

(a) The  Ministry  under  Deendayal  Antyodaya  Yojana  -  National  Rural  Livelihoods Mission  (DAY-NRLM)  receives  Annual  Action  Plans  (AAPs)  from  States/UTs  which includes  physical  targets  for  mobilization  of  rural  poor  women  into  Self  Help  Groups (SHGs). The Annual Action Plans are approved by the Empowered Committee set up in the Ministry under the Chairmanship of Secretary (RD) for each financial year. The ultimate aim of  DAY-NRLM is  to  cover  at  least  one  woman  member  from  each  rural  poor  household (about 9-10 crore) under the fold of Self Help Groups (SHGs). All households with at least one deprivation as per the Socio-Economic and Caste Census (SECC) database and identified through the process of Participatory Identification of Poor (PIP) and vetted by the respective Gram  Sabhas,  are  the  potential  target  for  coverage  under  DAY-NRLM.  In  the  current Financial Year, up to 28 th February, 2022, against the target of 7.80 lakh SHGs, 5.43 lakh SHGs have been formed and cumulatively, 74.80 lakh SHGs have been formed across the country (except Delhi and Chandigarh) under DAY-NRLM.

(b)  &(c)  Under  the  DAY-NRLM  interest  subvention  is  already  being  provided  on  loans taken by women Self Help Groups from Banks.  In 250 backward districts, referred to as Category-I districts, all women SHGs are eligible to get bank loans up to Rs. 3.00 lakh at an interest  rate  of  7%  per  annum.  An  additional  Interest  Subvention  of  3%  per  annum  is provided  to  women  SHGs  maintaining  prompt  repayment,  reducing  the  effective  rate  of interest  to  4%.  This  part  of  the  scheme  is  implemented  directly  by  Ministry  of  Rural Development and funded entirely out of the central component under DAY-NRLM.

In the remaining districts of the country referred to as Category-II districts, women SHGs under DAY-NRLM availing loans upto Rs. 3.00 lakh from Banks, Interest Subvention is given  to  the  extent  of  the  difference  between  Bank's  lending  rate  and  7%  subject  to  the maximum  ceiling  of  5.50%  per  annum.  This  part  of  the  scheme  is  implemented  by respective  State  Governments  and  is  funded  out  of  the  allocation  provided  to  each  State under DAY-NRLM which includes State share as per norms.

The  Government  has  now  approved  an  uniform  interest  subvention  scheme  for  women SHGs across  all  districts  in  the  country  from  next  year  i.e.  2022-23.  Under  the  uniform interest  subvention  scheme,  women  SHGs  will  be  eligible  for  loans  upto  Rs  3  lakhs  at interest rate of 7% per annum. Further women SHGs can avail loans above Rs 3 lakhs and upto  Rs  5  lakhs  at  interest  rate  equivalent  1-year  MCLR  (Marginal  Cost  of  Funds  based Lending Rate) of respective lending banks. As on Mar 2022, 1 year MCLR of major Public Sector Banks ranges between 7% to 7.5%.

(d) DAY-NRLM  has  a  provision  for  providing  Revolving  Fund  (RF)  at  the  rate  of Rs.10,000-15,000 per SHG and Community Investment Support Fund (CISF) to the extent of  Rs.  2,50,000  per  SHG.  These  funds  remain  with  the  SHGs  and  their  federations  in perpetuity and are utilized to provide loans to their members to undertake socio-economic activities as per their micro-credit/investment plans. As on 28 th February, 2022, a total of Rs. 17,342 crore of Capitalization Support (Revolving Funds  and Community Investment Support Funds) has been provided to SHGs and their federations by the Mission.

(e) The Government is taking regular steps to strengthen the SHGs by promoting SHG federations such as Village Organisations (VOs) and Cluster Level Federations (CLFs) which provides handholding support. SHGs have been provided Revolving Fund and Community Investment Support Fund towards credit support and to leverage high doses of credits from banks.  Regular  training  programmes  have  been  conducted  for  the  SHG  members  on  SHG management, financial literacy, livelihoods related technologies etc.

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