SHG-Bank Linkage Programme A Case Study

The self-help group - bank linkage programme (SBLP) and microfinance institutions (MFIs) are the two models of microfinance delivery in India. The SBLP covers about 56% of all microfinance space, and the remaining 44% are enveloped by MFIs. This study examined various relevant aspects of SBLP with respect to Dhenkanal district of Odisha, as a case study. All of the sample SHG members had opened savings bank accounts in their respective banks and believed that SHGs were useful for promoting savings and availing bank loans. More than 80% of them availed repeat loans. Above 90% of the loan amount were largely utilised for productive purposes in existing household economic activities. At the branch level, SHG’s saving balance was more than 30% of SHG outstanding loans. More than 40% of savings-linked SHGs had not availed credit from their respective branches because of their unwillingness to avail loan. Non availability of regular and timely interest subvention was one of the reasons for their unwillingness to avail bank loans.