Credit linking through the SHGs in India - A review

Finance, either through accumulated savings or through credit, in required volume is essential for undertaking any productive activity. Productive activity, therefore, requires linking of the producers with the financial or credit system of the country, a process termed financial inclusion, so as to enable them to avail of credit facility in time. An innovative form of such credit linking introduced in India in 1992–93 is through the self-help groups (SHGs). This paper is an attempt at reviewing, and commenting on, the progress of the programme in the country since its inception in 1992–93 with reference to its role in financial inclusion in the country.