The bond between the Self Help Groups (SHGs) and banks is growing stronger in the State. Now, Andhra Pradesh stands first in the country with regard to the SHG-bank linkages. As much as 37% of bank linkages provided across the country are from the State.
From a meagre ₹56.60 crore in 1999-2000 to 2016-17, ₹12,246 crore was withdrawn by 3,85,456 SHGs till March 31 this year. This is against the target of ₹11,375 crore.
The achievement is 107%, taking the State to the top slot. The credit facility to the SHGs has grown steadily from 2004-05. On average, each SHG availed itself of ₹45,000 credit during the financial year 2004-05. During the last fiscal, the SHGs received ₹369 lakh.
The reason for the shift in favour of the SHG-bank linkage is mainly attributed to the cash credit limit (CCL) facility. The facility, which was earlier available only to the businesses, is now being extended to women groups by the banks.
Earlier, in the term-loan mode, the SHGs were not eligible to approach banks for a fresh loan until they cleared the old loan.
Subsequently, the SHG members used to rely on alternative sources such as micro-credit. The banks, however, later switched to the CCL facility, which helped the SHG members immensely. The members can get loans from banks up to the sanctioned limit any number of times while paying the interest, say officials.
Budgetary support
When contacted, Society for Elimination of Rural Poverty (SERP) Chief Executive Officer P. Krishna Mohan, quoting the National Rural Livelihoods Mission (NRLM) data, says no other State is nearer to AP.Karnataka, which stands second, has mere 16% to its credit.
There are many reasons for the success of the SHGs in the State. Community-based recovery mechanism (CRBM), bank linkage sub-committees, micro-credit plans from the SHGs and the State government support are some of the reasons that propelled AP to the top spot in the SHG-bank linkage, he explains.
Mr. Krishna Mohan says the State government’s budgetary support and interest subvention also have contributed to the success of the SHGs.
Regular savings, periodical and regular meetings, proper maintenance of accounts, internal lending and recovery in the last six months, have been linked to the bank for loan, he says.
To a question, he said the Non-Performing Assets (NPAs) were about 3%.
