A Study on Innovation in Delivery of Credit — Microfinance through Self-help Group - Bank Linkage Programme

This study has assessed the socio-economic impact of microfinance through SHG-bank linkage programme in the Nalgonda district of Andhra Pradesh. The study has covered two mandals, 8 SHGs and 80 member households. The data pertaining to 1998–99 (pre-SHG period) and 2008–09 (post-SHG period), were collected through personal interview method. The regression estimates of income have indicated a significant impact of microfinance on SHG member households. The maximum number (76.25%) of households borrowed for carrying out various income generation activities. It was also observed that incremental income generated was highest from non-farm activities (36%), followed by farm (34%) and off-farm (27%) activities. On an average, the loan amount received by the members during post-SHG situation worked out to be 43250, which was about 789 per cent more than the pre-SHG situation ( 4860). The study has revealed that the net income was more equitably distributed in the post-SHG period than in the pre-SHG period. Thus, an innovation in delivery of credit, i.e. microfinance through SHG-bank linkage programme has brought out a significant improvement in social status of the members. The study has suggested that efforts should be made on strengthening of the existing groups. There is also a need for a database on SHGs at the district level.