Bank-Shg Linkage

[pic] Let us understand the SHG-Bank Linkage Model.  SHGs argon pure, viscous and participative groups of the poor, who pool their thrift regularly and use it to get down small interest bearing loans to members and in the process learn the nuances of pecuniary discipline. Subsequently they graduate to access bank credit to affix their resources for lending to their members in need of financial assistance for conflux their credit needs.    Over the years the pooled resources of the SHGs become a respectable corpus, which complimented by higher volume of bank loan enables them to suffer up livelihood activities which results in improving their standard of living. What has the above work achieved? According to the Status of Micro Finance in India 2009-2010 released recently by National Bank for Agriculture and pastoral Development (NABARD) there are 69,53,000 SHGs in the country nest egg linked with banks and 48,51,000 SHGs having loan outstandings as on 31 troop 2010.  The estimated number of families covered under this model is about 970 lakhs.  The meat savings amount of all the SHGs with banks as on 31 March 2010 amounts to Rs.6198.71 crore and the total amount of loans outstanding against SHGs as on 31 March 2010 is Rs.28038.28 crore.  The SHG-Bank Linkage Model is the largest financial inclusion body programme in the world.

  How did it happen? What are the merits in this model? Let us ponder. Incentive to save Members of SHGs are encouraged to make voluntary savings, regularly.  Women, whether rich or poor are heavy savers of money.  Small savings of rural poor women which were hidden in pots, jars, etc. where brought out in the open through the curriculum of SHGs and found a way to the bank or utilise for internal lending among the members of the group.  Thus, the money lying idle in the household earns interest. Internal lending Money saved by the members are lent internally among the needy members of the group and the interest charged vary between 12-24-36%. ... If you want to get a just essay, order it on our website: Ordercustompaper.com

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