Multi-agency approach exhibiting the penetration of self help group (SHGS) - Bank linkage in India: A macro perspective

The process of development encompasses undertaking economic activity on one front and imbibes the assessment of the inclusiveness of economic growth on the other. In the recent years, microfinance is being increasingly utilized as a panacea for poverty alleviation and as an important tool for development of economy as a whole. It has become a fulcrum for development initiatives for the poor, particularly in the third world countries. However, the old adage “India is a rich country where poor people live” still holds true for Indian economy. This is on account of widespread poverty and spatial distribution of income, wealth and assets which are rampant in Indian economy.With a view to facilitate smoother and more beautiful banking with poor, the multi- agency approach was adopted which emphasised a strong contribution of various institutional agencies viz. Commercial Banks, Regional Rural Banks and Cooperative Banks in provision of credit to a large chunk of people. The purpose of the approach was to provide the combined delivery of financial services along with technical assistance along with a refined model of micro-credit delivery, eminently known as Self Help Group- Bank Linkage Programme. In the present paper, attempt has been made to analyse and bring forward the progress in SHG-Bank Linkage programme on the basis of returns furnished by Commercial Banks (CBs), Regional Rural Banks (RRBs) and Co-operative Banks operating in the country. The study also reflects the macro perspective of the savings of Self-Help Groups (SHGs) with banks, loans disbursed by banks to SHGs, outstanding loans of SHGs with the banking system, the figure of Non Performing Assets (NPAs) of various agencies and the recovery percentage of SHG loans.