RBI asks banks to extend loans to women SHGs at 7% rate

Posted on:26 Aug 2016 18:16:09

RBI asks banks to extend loans to women SHGs at 7% rate
26 August 2016 Current Affairs GK: Reserve Bank of India (RBI) has asked banks to provide loans up to Rs 3 lakh at 7 per cent interest rate to Women Self-Help Group (SHG). This loan scheme must be provided under the National Rural Livelihoods Mission (NRLM)-Aajeevika scheme during 2015-16.

The revised guidelines on interest subvention scheme under NRLM have been issued after approval from the Union Ministry of Rural Development. Under this loan scheme, an interest subvention on credit up to Rs 3 lakhs at 7% per annum will be provided. 

All women SHGs will be eligible for it. However, SHG availing capital subsidy under Swarnjayanti Gram Swarojgar Yojana (SGSY) in their existing credit outstanding will not be eligible for benefit under this scheme. All banks will be subsidised to the extent of difference between the weighted average interest charged and 7% subject to the maximum limit of 5.5% for the year 2015-16. 

Further, SHGs will be provided with an additional 3% subvention on the prompt repayment of loans. The funding for this subvention will be provided to the State Rural Livelihoods Missions (SRLMs) from the allocation for NRLM.

National Rural Livelihoods Mission (NRLM) : Aajeevika NRLM-Aajeevika was launched by the Union Ministry of Rural Development in June 2011. In November 2015, it was renamed Deen Dayal Antayodaya Yojana (DAY-NRLM). The Mission aided by World Bank aims at creating efficient and effective institutional platforms of the rural poor. It seeks to enable rural poor (below BPL) to increase household income through sustainable livelihood enhancements and improved access to financial services. It is the largest poverty reduction initiative and the largest programme for women in the world with its goal to reach out to nearly 70 million rural households.

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