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Presentation on theme: "NATIONAL RURAL LIVELIHOOD MISSION (NRLM)"— Presentation transcript:

03 February 2015, Chennai

2 Implementation arrangements under NRLM

3 State Missions – Dedicated manpower
6 – 20 member team with thematic specializations 6-8 member team responsible for programme implementation at District level 5 member team responsible for programme implementation at Block level 8-10 Community Cadres at each Cluster (28-40 Gram Panchayats) State Mission Management Unit (SMMU) District Mission Management Unit (DMMU) Block Mission Management Unit (BMMU)/ Project Facilitation Teams (PFT)

4 Consultation mechanism with banks
Central Level Coordination Committee (CLCC) IBA sub committee at the national level NRLM Sub-committee under SLBC NRLM Sub-committee under DCC BLBC with participation of community representatives

5 Community Institution Architecture
(250 – 300 SHGs) Monitoring Sub Committee Repayment Sub committee Convergence Sub Committee CLF Accountant Bank Mitra CLF SHG Monitoring Sub Committee Bank Linkage Sub committee Asset Verification Sub Committee Social Action Sub Committee (15 – 25 SHGs) VO Book Keeper Community Facilitator V.O SHG Book Keeper SHGs Self Help Groups ( members) 5

6 Bank Linkage Mandate under NRLM
“Each poor Household is able to access credit of at least Rs 1 lakh in multiple doses (over 4-5 years)”

7 SHG Capitalization Strategy
Step by step process 36-40 Months Internal Lending SB A/C opening RF MCP prepared CIF Bank Credit – 1st Linkage Bank Credit – 2nd Linkage Months 6 -12 Months 6-8 Months Bank Credit – 3rd Linkage 6-8 Months 3-4 Months 2 Months From 1st Meeting RF : Revolving Fund MCP: Micro Credit Plan CIF: Community Investment Fund


Revolving Fund (RF): RF support to SHGs which are active for a minimum period of 3/6 months and ‘Panchasutra’ - Rs – Rs per SHG Community Investment support Fund (CIF) : CIF will be provided to the SHGs in the intensive blocks, routed through the Village level/ Cluster level Federations Capital Subsidy has been discontinued under NRLM

10 Lending Norms Eligibility criteria for the SHGs SHG should be in active existence at least 6 months & following ‘Panchasutra’. Revived SHGs are also eligible for credit if they are continue to be active for a minimum period of 3 months. Grading as per norms fixed by NABARD. As and when the Federations of the SHGs come to existence, the grading exercise can be done by the Federations to support the Banks.

11 Loan amount First dose: Rs. 50,000 or 4-8 times the corpus during the year whichever is higher. Second dose: Rs. 1 lakhs or times the existing corpus and proposed saving during the next twelve months, whichever is higher. Third dose: Minimum of Rs. 2 lakhs, based on the MCP prepared by the SHGs and appraised by the Federations/Support agency Fourth dose onwards: Loan amount can be between Rs lakhs for fourth dose and/or higher in subsequent doses. The loan amount will be based on the MCP

12 Type of facility and repayment
SHGs can avail either Term loan or a CCL loan or both based on the need. Repayment schedule could be as follows First dose: 6-12 installments Second dose: installments Third dose - based on MCP - repayment either monthly/quarterly /half yearly based on the cash flow (2 to 5 Years) Fourth dose onwards: repayment has to be either monthly/quarterly /half yearly based on the cash flow (3 to 6 Years) Security and Margin No collateral and no margin will be charged upto Rs lakhs limit to the SHGs

13 Interest Subvention to self help groups

14 Interest Subvention scheme – Credit limit Rs 3 lakhs Parameter
Category-I districts Category-II districts 1 Coverage Limited to selected 150 districts Remaining 490 districts 2 Eligibility All women SHGS are eligible for IS NRLM compliant women SHGs are eligible for IS 3 Benefit & eligibility Condition SHGs will be eligible for loans from banks at upfront 7% per annum; In case of prompt repayment additional 3% IS. Thus effective interest rate is 4% . IS available on prompt repayment only IS will be equivalent to the difference between lending rate of banks and 7% per annum 4 Release mehanism Banks will be subvented SHGs will be subvented Difference between the bank's lending rate and 7% (subjected to a max. of 5.5%) 5 Nodal Agency Canara Bank for PSBs & Pvt Banks NABARD for RRBs & Cooperative Banks Respective SRLM

15 Interest Subvention Cat. – I (150 districts)
Role of Banks Banks will lend to all women SHGs at upfront 7% per annum (upto Rs 3 lakhs) Banks will also pay additional interest subvention of 3% to SHG loans accounts being serviced promptly Bank will submit claims pertaining to interest subvention to Canara Bank for further submission to MoRD for release of claims. Role of MoRD & SRLMs MoRD will subvent banks to as per DFS approved rate - Weighted Average Interest Charged (WAIC) SRLMs will undertake initiatives for spreading on the scheme Interest Subvention Cat. – I (150 districts)

16 Weighted Average Interest Cost (WAIC) As prescribed by DFS
Banks WAIC Interest to be subvented above 7% HDFC Bank 18.00 5.5 ICICI Bank 14.26 Yes Bank 20.50 Axis Bank 12.68 J&K Bank 13.00 Karur Vysy Bank 11.28 4.28 Dhanalaxmi Bank Ratnakar Bank South Indian Bank 14.50 Federal Bank 12.70 ING Vysy Bank 19.05 Indus Ind Bank No lending to WSHG NA Kotak Mahindra Bank Tamil Nadu Mecantile Bank

17 Interest Subvention Cat. – II (490 districts)
Role of Banks Banks will lend to women SHGs at regular lending rates Banks to regularly share data with NRLM on loans disbursed to women SHGs directly from CB Role of State Missions State Missions will identify ‘NRLM Compliant SHGs’ Based on the data shared by banks, promptly repaying SHGs will be identified. State Missions will transfer the amount of interest subvention directly to SHG loan a/c.

18 SHG Bank Linkage How are Private Banks performing?

19 Share in Credit disbursement to SHGs (FY13-14)

20 Region-wise penetration by Pvt Banks (2013-14)

21 Growth in disbursement of loan by Pvt Banks
No. of SHG Linked Loan Amount (Rs Cr) No. of SHG Linked Loan Amount

22 Average loan Size to SHGs
Amount of Credit Per SHG (Rs)

23 No. of SHGs having Loan o/s % of SHG having loan outstanding
SHGs Bank Linked S.No. States Estimated no of SHGs No. of SHGs having Loan o/s (Mar 2014) % of SHG having loan outstanding Share of Pvt Banks 1 TAMIL NADU 6,36,000 4,46,671 70% 10% 2 KARNATAKA 5,00,000 3,37,196 67% 6% 3 RAJASTHAN 2,31,763 1,29,830 56% 8% 4 KERALA 2,29,964 1,17,303 51% 18% 5 MP 1,59,457 81,030 6 MAHARASHTRA 6,87,717 2,04,355 30% 12% 7 GUJARAT 2,08,410 61,848 3% Total 26,53,311 13,78,233 Source: Status of Microfinance , NABARD

24 SHG NRLM 1. Policy Formulation
SRLM - Promotion of SHG & Fedn - Capacity Building of CBOs - Financial literacy, counselling services on savings, credit and Micro-investment Planning - Placement of Bank Sakhi - Institutionalizing CBRM for ‘Zero NPA’ Pvt Banks - Opening of SB a/c - Channeling benefits to SHG & members – Community Funds/ Interest Subvention/ other entitlements - Credit Linkage of SHGs NRLM 1. Policy Formulation 2. Project Financing 3. Technical Support SHG

25 Expectation From Private Sector Banks
Much greater Partnership with SRLMs for lending to women SHGs Data sharing on loan disbursed to women SHGs on monthly basis. Assign following codes to all accounts of SHGs Unique code for Women SHGs – Assign gender based codes for SHGs-Male, Female as well as mixed irrespective of promoting agency Unique code for NRLM – For both S/B and loan accounts of women SHGs channel Interest Subvention benefit for Women SHGs

26 Thank You


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