Banks extend credit to north, east SHGs: Ramesh

He was making a strong pitch for banks in north and east Indian states to be proactive in addressing linkage problem and releasing funds for such self help groups which help rural poor as also promote social development.

"Today, SHG movement is very much a part of the banking network. Last year, banks lent Rs 17000 crore loans to all the SHGs across the country though 80 per cent of the 17000 goes to the inevitable gang of four--Andhra Pradesh, Tamil Nadu, Karnataka and Kerala," Ramesh said at a conference attended by top officials of the major nationalised banks.

"Now, the picture has to change. Because we are expanding the SHGs in Orissa, Rajasthan, Bihar, Uttar Pradesh and we are finding that the biggest constraint in the SHGs movement today is linkage with banks.

"It is easier to start the SHGs. It is more difficult to establish the linkage with the banks and get the banks to actually lend money to the SHGs," the Minister said at the National Conference on Rural Self Employment Training Institutes (RSETI).

Emphasising that the banks are crucial for SHGs, he said the Government wanted bankers to "look beyond Andhra Pradesh, Tamil Nadu, Karnataka and Kerala" to make the SHG movement a success in states, including Bihar, Jharkhand, Chattisgarh, and Madhya Pradesh where it has already taken off.

One of the most important reasons why the SHG movement took off in the South Indian states was the presence of local banks such as State Bank of Hyderabad, Andhra Bank, Syndicate Bank, Canara Bank and Vijaya Bank, Ramesh said.