Centre to give Rs 1-3 lakh loans to self-help groups at very low rates

The Central government, as part of the existing National Rural Livelihood Mission (NRLM), plans to facilitate women-led self-help groups (SHGs) by giving them bank loans of over Rs 1,00,000 and up to Rs 3,00,000 for undertaking various activities at easy interest rates.

The union cabinet had in a decision taken on November 02, 2015 had extended the interest subvention under the National Rural Livelihood Mission (NRLM)  to 100 districts.

Under the same, all women SHGs that avail off loans up to Rs 3,00,000 from banks are charged interest at the rate of 7 per cent per annum and they also get additional interest subvention of 3 per cent of timely repayment, which brings down their effective rate of interest to just 4 per cent per annum. 

These loans would be provided through the credit-linkage facility currently available with the SHGs under which the Centre has facilitated availing of bank credit of around Rs 30,000 crore per year.

This is now being targeted to be doubled to almost Rs 60,000 crore per year till 2019.

Under the Livelihood Mission, the government has developed linkages between ministries of rural development and agriculture to undertake activities like goatery, livestock rearing etc.

India has around 2.5 million self-help groups in rural areas. The groups usually comprise of 8-10 women, who work in remote areas of the country. 

On NRLM, the cabinet approved the extensive use of the database generated by the newly released Socio-Economic Caste Census for Rural areas for targeted reduction of poverty and convergence with other schemes.

According to SECC there are around 8.5 crore rural households in the country.

“The NRLM will use the SECC data to undertake planning for poverty free Panchayats involving Panchayati Raj institutions and Self-Help Group (SHG) of households,” a statement then released had said.

The interest subvention for women Self-Help Groups (SHGs) is now being extended to 100 more districts.