Paper
NABARD and Microfinance
Taking banking services to the poor
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12 pages
This paper show-cases the achievements of the NABARD initiated Self Help Group (SHG) bank linkage program from 1991-92 to 2001-2002. By the end of March 2002, the program had benefited 39 million poor people in India, with 7.8 million families having accessed bank-credit.
The different bank linkage models that have evolved over time are:
- SHGs are formed and financed by banks;
- SHGs are formed by NGOs but financed directly by banks;
- SHGs are financed by banks through NGOs.
SHG banking has emerged as a strong alternative to the formal banking system in India as it has established a flexible structure for the flow of financial services for low income families.
NABARD plans to reach 100 million poor through one million SHGs through its linkage program. Some of the strategies it has identified to meet this goal are:
- Providing training and exposure assistance to all stake holders;
- Encouraging cooperatives to finance SHGs;
- Integrating SHG approach in social sector programs of development agencies;
- Disseminating the SHG concept among the rural masses.
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