RBI announced interest subvention scheme for Women Self-Help Groups

Reserve Bank of India (RBI) on 25 August 2016 asked all commercial and Co-operative banks to provide loans to women self-help groups (SHGs) in rural areas at 7 percent per annum.

The laons will be provided for the financial year 2016-17 under the Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (NRLM) in 250 districts.

Interest subvention scheme for Women SHGs - Year 2016-17

• All women self-help groups (SHGs) will be eligible for interest subvention on credit up to three lakh rupees at 7 percent per annum.

• SHGs availing capital subsidy under the Swarnajayanti Gram Swarozgar Yojana (SGSY) in their existing credit outstanding will not be eligible for benefit under this scheme.

• All banks will be subvented to the extent of difference between the weighted average interest charged and 7%, subject to the maximum limit of 5.5% for 2016-17.

Further, the SHGs will be provided with an additional 3% subvention on the prompt repayment of loans. For the purpose of interest subvention of additional 3% on prompt repayment, an SHG account will be considered prompt payee if it satisfies the following criterion as specified by RBI.

National Rural Livelihoods Mission (NRLM)

NRLM (Aajeevika) was launched by the Union Ministry of Rural Development (MoRD) in June 2011. In 2015, the mission was replaced by the Deen Dayal Antyodaya Yojana.

Aided in part through investment support by the World Bank, the NRLM aimed at creating efficient and effective institutional platforms of the rural poor. It seeks to enable them to increase household income through sustainable livelihood enhancements and improved access to financial services.