SHG Bank linkage
Brief Note
Acts/Gos/ Memos/Circulars
Progress Reports
SHG Bank Linkage



Self Help Movement through:   savings has been taken up as a mass movement by women. There are about 8.50 lakh women SHGs in Andhra Pradesh covering nearly 111.81 lakh rural poor women. The SHGs are not only resorting but are also taking small loans out of the corpus available with the group. An amount of Rs. 4025.55 crores is mobilized as corpus among these groups and the savings of these SHGs have an accumulated Savings Rs. 1962.50 as onFebruary 2009.    The state government has taken several initiatives to extend financial support to these groups which are mentioned hereunder.

Self sustaining movement:    The members of SHGs are poor with low or nil saving capacity, and who depend on moneylenders or private sources to meet their expenditure and other obligations. During the group meetings, the thrift amount is pooled and given as loans to members for utilization, production or investment purposes based on the priorities determined by the group. The group members keeping in view the interests and prosperity of the member take a collective decision regarding all matters. These groups play the role of a mid-wife or money lender. Since it is members thrift that is given out as loans to one or two members at each meeting depending upon the priorities as set by the group, members exercise close supervision on utilization of loans. Peer pressure is exerted on members to continue savings to enable every member to have an opportunity to avail loans. Prompt repayment of loans is insisted by the remaining members to avail themselves loans of higher order. As a result, at any given point of time all members in a SHG will not be borrowers. Even if all of them are borrowers, their loans outstanding will not be equal. Several interesting features have been observed in the financial dynamics of groups where there is evidence in qualitative shift in loans portfolio in favour of productive purposes as against consumption loans availed earlier. So is the case with the size of loan.

Thrift and credit working together: Thrift and credit activities have thus emerged as solitary binding force to mobilize rural poor in group mode. The rural poor may not be able to form groups by themselves to command a sufficient strength to approach and negotiate with external agencies like banks for funds. With a view to make thrift and credit activities meaningful for economic empowerment, the groups are gradually encouraged to deploy their funds investment or income generating activities. While doing so, conscious efforts are made by Self Help Promoting Institutions (SHPIs) / Mutually Aided Cooperative and Thrift Societies (MACTS) to build appropriate capacities for managing micro enterprises. Capacity building efforts include training in functional areas of management, skill development, technology up-gradation, market support etc.

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