The Self Help Group (SHG) Bank Linkage (BL) Project, initiated by NABARD in 1992, is the world’s largest microfinance project. This program permitted banks to open savings accounts for SHGs, leading to a woman-centered, community-based approach towards financial inclusion.
Components of The SHG-BL Project
The success of the program can be attributed to several key components. The SHG-BL project involved the training of bank branch managers and positioning of Bank Sakhis at rural branches. A Community Based Repayment Mechanism (CBRM) was initiated to ensure smooth transactions. Moreover, a web portal was created to overcome information asymmetry, incorporating data directly from Banks’ Core Banking Solution (CBS) database.
Funding and Achievements
Since the financial year 2013-14, SHGs have accessed bank loans worth Rs. 7.68 lakh Crore. These figures represent the significant progress made by SHGs in harnessing financial services, thus demonstrating the effectiveness of the linkage with banks.
Introduction to Deendayal Antyodaya Yojana-National Rural Livelihood Mission (DAY-NRLM)
Launched in 2011, the DAY-NRLM aims to eliminate rural poverty through multiple livelihood promotion and improved access to financial services. Its strategy involves working with community institutions through community professionals to self-help. This initiative has greatly influenced livelihoods by mobilizing rural households into SHGs and organizing training for SHG members.
Sub Programs of DAY-NRLM
Several sub-programs under DAY-NRLM further contribute to its vision. The Mahila Kisan Sashaktikaran Pariyojana (MKSP) promotes agro-ecological practices to help increase women farmers’ income. The Start-Up Village Entrepreneurship Programme (SVEP) supports entrepreneurs in rural areas in setting up local enterprises. The program also includes Aajeevika Grameen Express Yojana (AGEY) and Deendayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY) for providing transport services and skill development, respectively.
Role of SHGs in Developmental Activities
The emergence of SHGs marks a significant shift in the approach to developmental activities, historically dominated by state intervention. SHGs have played an instrumental role in enabling women’s economic participation, thereby empowering them and also contributing to overall community development.
The Success of SHG-BL as a Poverty Alleviation Program
The SHG-BL program, a unique innovation in India, has proved to be one of the most effective poverty alleviation and women empowerment programs. This is evident from the International Initiative for Impact Evaluation study conducted in 2019 that found a 19% income boost and a 28% increase in household savings compared to the baseline due to the SHG-BL project.
Relevance in Civil Services Examination
The importance and impact of the SHG-BL project have been acknowledged in various examination questions for civil services, including in both Prelims and Mains examinations, underlining their role in poverty alleviation and rural development. Understanding these institutions and their significance is crucial for anyone preparing for Civil Services Examination.
