Women's Access to Credit and Rural Micro-finance in India

Micro credit should form an integral
part of the bank’s credit plan and
should be reviewed at the highest level
on a quarterly basis.
• A simple system requiring minimum
procedures and documentation is seen
as a pre-condition for augmenting the
flow of micro credit. Branch managers
are to be delegated adequate sanctioning
powers so as to remove operational
irritants. The loan applications, forms,
procedures, and documents are to be
kept simple. A statement is to be furnished
to the Rural Planning and
Credit Department, RBI on a halfyearly
basis indicating the amount of
micro credit disbursed by the bank.
There is also a prescribed ‘Micro
Credit Progress Report’ that the banks
are supposed to submit to the RBI.
National Bank for Agriculture and
Rural Development (NABARD)
According to NABARD, three broad
models of SHG-bank linkage have been
identified:
Model I: Bank-SHG-Members
In this model, the bank acts as a Self-Help
Group Promoting Institution (SHPI). The
bank takes the initiative in forming the
groups, nurturing them, opening their
savings accounts and then providing them
with credit. This model formed 14 per cent
of the cumulative number of SHGs
linked upto March 31, 2001.
Model II: Bank-Facilitating Agency-
SHG-Members
In this model, groups are formed by facilitating
agencies like NGOs, government
agencies, or other community
based organizations. The groups are nurtured
and trained by these agencies. The
bank opens savings accounts and then
provides credit directly to the SHGs after
observing their capacities. The share
of SHGs financed under this model during
1999-2000 was 70 per cent. This
large figure is attributed to the fact that
while more NGOs are getting involved
as facilitators, state governments are
also operating through their respective
development agencies in the same context.
Model III: Bank- MFI-SHG-Members
Banks in some areas are not in a position
to finance SHGs themselves. In
such cases, NGOs act as both facilitators
and as Micro-finance Institutions (MFIs).
They form, nurture and train the groups.
They also avail of bulk loans from the
banks for on-lending to the SHGs. Under
this model the MFIs are also found
to form Federations of the SHGs. This
model formed 16 per cent of the cumulative
number of SHGs credit linked in
1999-2000.
Apex Bodies
Small Industries Development Bank
of India (SIDBI)
SIDBI had launched the Rs.1000 million
SIDBI Foundation for Micro Credit
(SFMC) in November 1998. It is a fully
functional separate department of
SIDBI since January 1999. The Foundation
is supposed to assist NGOs and
voluntary organizations on soft terms,
which would in turn extend micro credit
to poor people. The purpose of the
SFMC is to create a national network
of strong, viable, and sustainable
46 WOMEN’S ACCESS TO CREDIT AND MICROFINANCE IN RURAL INDIA