Nabard asks MP to spruce up self-help groups

The National Bank for Agriculture and Rural Development (Nabard), Bhopal, has asked the MP government to consolidate the self-help groups (SHGs) instead of increasing their population.

"Against the target of Rs 184 crore, only Rs 51 crore has been disbursed to state SHGs and thus each SHG gets hardly Rs 45,000," Nabard Regional Manager Ashok Mathur said.

The state has almost 400,000 SHGs, of which 45,000 are monitored by Nabard and 40,000 by the rural development department. Mathur said the focus of the state was on increasing the number of the SHGs and not on consolidation, which was damaging for SHGs.

"Credit linkages with banks are necessary for any SHG to survive so that micro-credit activities could take place," he said.

Self-help groups in the state have opened savings accounts in nearby branch but in most of the cases the corpus (of savings account) has not been mobilised in micro-finance activities like loans for small businesses, piggeries or small farming.

"Self-help groups often become liabilities on banks. It is essential for the government to identify these SHGs," Mathur said.

Further, the state government has asked the Mahila Vitta Vikas Nigam to look into the financial conditions of SHGs. Under the Nabard scheme from April to June, 3,978 accounts have ben opened and Rs 6.72 crore has been deposited, out of which Rs 3.70 crore has been disbursed. Nabard has recovered 60 per cent of the amount disbursed.

A finance ministry official said credit linkage to the weaker sections is only possible through SHGs but sharing this finance by a number of SHGs may create problems in future.

"Despite a fall in total advances of Rs 238 crore from March 2005 to June 2005, the state has registered a good progress in advances to weaker section which swelled by Rs 92 crore from Rs 3678 crore to Rs 3770 crore. This is 1.55% more than the national target of 10%," a government official said.