Value of savings and loans under SHG-BLP program in India FY 2020-2022

In financial year 2022, self-help groups' (SHGs) savings with banks in India increased from 261 billion in the financial year 2020 to around 472 billion in 2022. Loans disbursed to SHGs witnessed a dip in 2021, however, the value of loans outstanding gained momentum by the following year.

What is Self-Help Group-Bank Linkage Program?

The SHG-BLP was developed by National Bank for Agriculture and Rural Development (NABARD) to provide financial services to the unreached rural poor. Under this program, banks were allowed to open savings accounts for self-help groups (SHGs). Self-help groups are registered or unregistered entities comprising 15 to 20 members from low-income families, usually women.

Relevance of SHG-BLP for the Indian microfinance industry

 Financial inclusion of the rural poor has been one of the major challenges for the Indian microfinance industry. Under the SHG-BLP program, banks could directly lend to SHGs, and NABARD provided refinancing and promotional support. Consequently, the rural poor and the SHGs received easier access to financial services like savings, credit, insurance, and remittance.