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| The central bank said that the approach to micro-financing of SHGs should be totally hassle-free and could include consumption expenditure to enable smoothening of consumptions as needed, relative to time-profile of income flows.
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| It emphasised that the group dynamics of working of the SHGs may be left to themselves and need neither be regulated nor formal structures imposed or insisted upon.
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| Banks have been asked to establish linkages with SHGs, making the procedures absolutely simple and easy while providing for total flexibility in such procedures to suit local conditions.
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| Nabard should devise mechanisms to ensure sharing of experiences among the bank branches that are closely involved in extending micro-finance.
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| In the last 11 years, about 14.5 lakh self-help groups (SHGs) have been mobilised and 37 lakh swarozgaris have been assisted with an investment of Rs 7,500 crore.
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| The vehicle of self-help groups has grown into the largest microfinance programme in the world, in terms of its outreach.
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| The collateral-free loans have been extended mostly to those who could not be reached by the banking system earlier.
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| Many banks have started accepting micro-finance as normal and sustainable banking business operating at market rates of interest.
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| With on-time repayments well above 95 per cent, collateral security has been progressively replaced by mutual trust.
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| The SHG programme has immense potential for making rural people self-reliant and to increase rural incomes by creating opportunities for self-employment at the local level.
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| It may be pertinent to note that women self-help groups maintain almost cent per cent loan repayment.
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| The micro-finance initiatives have assisted the rural poor, especially women, in contributing meaningfully to the process of economic growth in the rural areas.
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| The most important and immediate banking needs of the poor are to keep safe their occasional surpluses in the form of thrift.
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| They also needed consumption loans to meet emergent lifecycle needs. The banking services and products need to be hassle-free.
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| Based on its experiences, Nabard initiated a pilot project in 1992 that aimed at financing 500 SHGs across the country, through the already existing banking network. |
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