Keywords: India, micro credit, self help groups, monetary policy, bank loans, financial services, poverty, poor, disadvantaged, entrepreneurship, management, self-employment, empowerment, women
Micro credit in India: an overview
The present paper reviews origin, development and growth of the micro credit programme in India. The National Bank for Agriculture and Rural Development in India launched its pilot phase of the Self Help Group Bank Linkage programme in 1992. Self Help Groups have been recognised by the policy makers as the effective conduits for accomplishing the distributional objectives of monetary policy. The SHG-bank linkage programme has emerged as the largest micro credit programme in the world. The programme has made rapid progress since its inception in 1992. The progress under the SHG-Bank linkage programme has been quite impressive. Nearly 16.7 million families were assisted through this programme and 1079091 Self Help Groups were provided with bank loans. Total amounts of 867 million US$ were given to the Self Help Groups for employment generating activities. NGOs have emerged as effective change agents by organising, nurturing and stabilising SHGs and affecting their linkage with banks as also by adopting other delivery mechanisms for providing financial services directly or indirectly to the poor.