Logo Logo
Home > Information Kiosk >SHG (Self Help Group) Bank Linkage
SHG (Self Help Group) Bank Linkage

SHG (Self Help Group) Bank Linkage updated on 02-06-2012

Self Help movement through savings has been taken up as a mass movement by women. There are about 5.79 lakh women SHGs in Andhra Pradesh covering nearly 74.58 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. 2385.98 crores is mobilized as corpus among these groups. 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.