The National Bank for Agriculture and Rural Development (NABARD) has come out with a number of suggestions to fine-tune the informal credit delivery system in Ariyalur district and mooted promotion of 800 self-help groups (SHGs).
In its Potential Linked Credit Plan (PLP), which was released by District Collector M.Ravikumar recently, the bank said Tamil Nadu is ranked second in the country, after Andhra Pradesh, in SHG-bank linkage programme. Wide network of non-governmental organisations (NGOs), encouraging support of banks, and support of government agencies are the factors that contribute to the performance of the State. Regular savings, maintenance of books and accounts, and internal lending are the major factor in determining the credit absorption capacity of the groups.
In order to give a major thrust to formation and linkage of SHGs, Central government has directed that all SHGs shall be sanctioned cash credit limits only. Term loans can also be given to those SHGs where the SHG undertakes a group activity.
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Besides, the NABARD has pointed out that all the scheduled commercial banks and regional rural banks and State co-operative banks have been directed to respond to the changing requirement of members.
Thus, hereafter, voluntary savings over and above the compulsory savings would be allowed. Cash credit or overdraft would be extended to SHGs. The banks could enable formation of joint liability groups (JLGs) within the SHGs. Steps would be taken to build second-tier institutions and improve risk mitigation systems. Monitoring mechanism would also be strengthened.
With specific reference to Ariyalur district, the bank said as many as 8,752 SHGs have been promoted as on March 31, 2012 and 12,983 SHGs have been provided credit linkage.
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