Microfinance and Self-Help Groups in India
Self-Help Groups and the Bank Linkage Model
In India, groups of women save together and borrow from banks as a group, a model promoted by NABARD from 1992.
India developed its own path, built around self-help groups.
What an SHG is
A self-help group is a small group, usually of women, who pool savings and lend to members.
Bank linkage
In 1992 NABARD launched the SHG-Bank Linkage Programme, under which banks lend to established groups.
Scale
Millions of groups now exist, covering crores of households.
Beyond credit
Groups often discuss health, schooling and local issues, building confidence and voice.
Twelve women meet, each contributes a small amount, and they lend to a member with an urgent need.
They also build social capital.
- SHGs pool members' savings.
- NABARD's programme began in 1992.
- Millions of groups exist.
- They build social capital.
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