Women SHGs and their Federations :
Women SHGs under NRLM consist of 10-15 persons. In case of special SHGs i.e. groups in the difficult areas, groups with disabled persons, and groups formed in remote tribal areas, this number may be a minimum of 5 persons. NRLM will promote affinity based women Self –help groups. Only for groups to be formed with Persons with disabilities, and other special categories like elders, transgender, NRLM will have both men and women in the self-help groups. SHG is an informal group and registration under any Societies Act, State cooperative Act or a partnership firm is not mandatory. However Federations of SHGs formed at village level, cluster level, and at higher levels are to be registered under appropriate acts prevailing in their States.
Financial Assistance to the SHGs:
NRLM would provide a Revolving Fund (RF) support to SHGs in existence for a minimum period of 3/6 months and follow the norms of good SHGs, i.e they follow ‘Panchasutra’ – regular meetings, regular savings, regular internal lending, regular recoveries and maintenance of proper books of accounts. Only such SHGs that have not received any RF earlier will be provided with RF, as corpus, with a minimum of Rs.10,000 and up to a maximum of Rs. 15,000 per SHG. The purpose of RF is to strengthen their institutional and financial management capacity and builda good credit history within the group.
Interest Subvention:
No Capital Subsidy will be sanctioned to any SHG from the date of implementation of NRLM. NRLM has a provisionfor interest subvention, to cover the difference between the Lending Rate of the banks and 7%, on all credit from the banks/ financial institutions availed by women SHGs, for a maximum of Rs. 3,00,000 per SHG. This will be available across the country in two ways:
(i) In 150 identified districts, banks will lend to all the women SHGs @7% up to an aggregated loan amount of Rs. 3,00,000/-. The SHGs will also get additional interest subvention of 3% on prompt payment, reducing the effective rate of interest to 4%.
(ii) In the remaining districts also, NRLM compliant women SHGs will be registered with SRLMs. These SHGs are eligible for interest subvention to the extent of difference between the lending rates and 7% for the loan up to Rs. 3 lakhs, subjected to the norms prescribed by the respective SRLMs. This part of the scheme will be operationalized by SRLMs.
Community Investment support Fund (CIF)
CIF will be provided to the SHGs in the intensive blocks, routed through the Village level/ Cluster level Federations, to be maintained in perpetuity by the Federations. The CIF will be used, by the Federations, to advance loans to the SHGs and/or to undertake the common/collective socio-economic activities.
Role of banks
(a) Opening of Savings accounts: The role of banks would commence with opening of accounts for all the Women SHGs, SHGs with members of Disability and the Federations of the SHGs. The ‘Know Your Customer’ (KYC) norms as specified from time to time by Reserve Bank of India are applicable for identification of the customers.
(b) Lending Norms: The eligibility criteria for the SHGs to avail loans will be as under:
– SHG should be in active existence at least since the last 6 months as per the books of account of SHGs and not from the date of opening of S/B account.
– SHG should be practicing ‘Panchasutras’ i.e. Regular meetings; Regular savings; Regular inter- loaning; Timely repayment; and Up-to-date books of accounts;
– Qualified as per grading norms fixed by NABARD. As and when the Federations of the SHGs come to existence, the grading exercise can be done by the Federations to support the Banks.
– The existing defunct SHGs are also eligible for credit if they are revived and continue to be active for a minimum period of 3 months.
(c) Loan amount: Emphasis is laid on the multiple doses of assistance under NRLM. This would mean assisting an SHG over a period of time, through repeat doses of credit, to enable them to access higher amounts of credit for taking up sustainable livelihoods and improve on the quality of life. The amount of various doses of credit should be as follows:
– First dose: 4-8 times to the proposed corpus during the year or Rs. 50, 000 whichever is higher.
– Second dose: 5-10 times of existing corpus and proposed saving during the next twelve months or Rs. 1 lakhs, whichever is higher.
– Third dose: Minimum of Rs. 2 lakhs, based on the Micro credit plan prepared by the SHGs and appraised by the Federations/Support agency and the previous credit history
– Fourth dose onwards: Loan amount can be between Rs. 5-10 lakhs for fourth dose and/or higher in subsequent doses. The loan amount will be based on the Micro Credit Plans of the SHGs and their members.
The loans may be used for meeting social needs, high cost debt swapping and taking up sustainable livelihoods by the individual members within the SHGs or to finance any viable common activity started by the SHGs.
(Corpus is inclusive of revolving funds, if any, received by that SHG, its own savings and funds from other sources in case of promotion by other institutes/NGOs.)
(d) Type of facility and repayment:
SHGs can avail either Term loan or a CCL loan or both based on the need. In case of need, additional loan can be sanctioned even though the previous loan is outstanding.
Repayment schedule could be as follows:
– The first dose of loan will be repaid in 6-12 instalments
– Second dose of loan will be repaid in 12-24 months.
– Third dose will be sanctioned based on the micro credit plans, the repayment has to be either monthly/ quarterly /half yearly based on the cash flow and it has to be between 2 to 5 Years.
– Fourth dose onwards: repayment has to be either monthly/quarterly /half yearly based on the cash flow and it has to be between 3 to 6 Years
(e) Security and Margin:
No collateral and no margin will be charged up to Rs. 10.00 lakhs limit to the SHGs. No lien should be marked against savings bank account of SHGs and no deposits should be insisted while sanctioning loans.