Home ODISHA LATEST Credit linkage to 1 lakh women SHGs in 2013-14

Credit linkage to 1 lakh women SHGs in 2013-14


Reported by Chinmaya Dehury/Edited by Sandeep Sahu
Bhubaneswar, Oct 7:

Notwithstanding the reluctance of banks to provide loan to the micro industries and agriculture sectors, the state government has set an ambitious target to provide credit linkage worth Rs 1,000 crore to one lakh women self help groups (SHGs) in 2013-14.


In an effort to make SHGs self reliant, the government has decided to provide loan of large size to them through their Gram Panchayat level federations under the Odisha Livelihood Mission (OLM).

“In order to make the poor people credit worthy and valued costumers of the banks, the SHGs will be given priority for bank linkages under OLM. In the year 2013-14, the government has targeted to provide credit linkage to one lakh women SHGs with credit requirement of rupees one thousand crore,” said Chief Minister Naveen Patnaik at the first governing body meeting of OLM here today.

While more than 50 lakh poor households have been organized into SHGs through the Mission Shakti movement in the state, the panchayat federations will be provided with community investment fund, a grant ranging from Rs five lakh to Rs 25 lakh based on their population.
National Rural Livelihood Mission (NRLM) has created provision for interest subvention over and above the interest rate of seven per cent per annum to reduce the interest burden on poor households. All women SHGs in Integrated Action Plan (IAP) districts and SHGs which comply with NRLM norms in non-IAP districts will be eligible for an additional 3 per cent interest subvention on prompt repayment.

“In our state, the state government has recently rationalized interest subvention by reducing effective interest burden to two percent per annum for all SHGs who pay their dues on time,” said the Chief Minister.

However, data shows that the banks, particularly private banks, are not providing credit to the sector despite the intervention of government.
The MSME departmental analysis for the years 2011-12 and 2012-13 revealed that as many as 11 out of 25 public sector banks, along with four of seven private banks and four of six regional rural banks, have posted negative growth in credit flow to the MSE sector. Nine public sector banks have shown negative growth in MSE accounts.

The Chief Minister also said that the government has targeted to train 50,000 rural youth and place at least 75 per cent of them in the organized sector. The government will spend Rs 240 crore under OLM in the current financial year, he said.