Cabinet gave approval for Women Self Help Groups to Get Low Interest Loans

The Union Cabinet of India on 1May 2013 approved major changes to the National Rural Livelihoods Mission (NRLM) with the objective of removing poverty in rural areas by empowering women. Approximately, 25 lakh Women Self Help Groups (SHGs) will be given bank loans at an interest rate of seven percent. They could avail loans upto 3 lakh rupees annually. At first, the scheme will begin as a pilot project in 150 districts which includes the 82 Integrated Action Plan districts affected by naxal violence while 75 per cent of the cost will be carried by the Central government and 25 per cent by the States in the rest of the states.

All women SHGs are now getting bank loans at 11.5 to 14 per cent rate of interest. In the 150 districts, the Union government will carry the complete cost of the interest subvention from the market rate to seven per cent. The entire cost of the project is approximately 1650 crore rupees for 2013-14, out of which, 1400 crore rupees shall be carried out by the Union government and 250 crore rupees by the States.

Aajeevika - National Rural Livelihoods Mission (NRLM) was launched by the Ministry of Rural Development (MoRD), Government of India in June 2011. Aided in part through investment support by the World Bank, the Mission aims at creating efficient and effective institutional platforms of the rural poor enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.