Excellence by Saikat Sir: HDFC Bank Adjudged Best Performing Bank in SHG Linkage by NRLM

What is the news:

HDFC Bank has been adjudged Best Performing Bank in SHG Linkage by National Rural Livelihood Mission (NRLM), Ministry of Rural Development, Govt of India.
At a function organised at Vigyan Bhavan, New Delhi, the award was presented by Shri Giriraj Singh, Minister of Rural Development to Mr. K Venkatesh, Head – Sustainable Livelihood Initiative, HDFC Bank.
Notably, HDFC Bank was the only Private Bank to be felicitated for remarkable work in SHGs – by the National Rural Livelihood Mission (NRLM).
Self Help Group (SHG) is a group lending model with a group of small-time women entrepreneurs coming together for a loan, where the repayment is a collective responsibility of each member in the group. Self Help Group emphasises on the concept of group cohesion and bonding. Due to this structure, an SHG is an evolved group with strong group linkage in place.
Given the structure, Govt of India started National Rural Livelihood Mission (NRLM) in 2011 as a poverty alleviation project. Implemented by the Government of India under the ministry of Rural Development, NRLM’s focus is to promote self-employment and create sustainable livelihood opportunities for the rural poor.

Important :

As part of NRLM, HDFC Bank provides access to financial services to over 4.5 lakh individuals in unbanked and underbanked sections of society. The Bank has signed MoUs with State Rural Livelihood Mission of six states, namely Assam, Chhattisgarh, Maharashtra, Punjab, Rajasthan and Uttar Pradesh.
Under the National Rural Livelihood Mission, the bank has offered advances over Rs 1,000 crore – as of February 2022.

What is SHG ( Self help group):

A self-help group(commonly abbreviated SHG) is a financial intermediary committee usually composed of 10 to 25 local women between the ages of 18 and 50.
Most self-help groups are in India, though they can be found in other countries, especially in South Asia and Southeast Asia.
A SHG is generally a group of people who work on daily wages who form a loose grouping or union. Money is collected from those who are able to donate and given to members in need.
Members may also make small regular savings contributions over a few months until there is enough money in the group to begin lending. Funds may then be lent back to the members or to others in the village for any purpose.
In India, many SHGs are linked with banks for the delivery of micro-credit.

About DAY-NRLM (Deendayal Antyodaya Yojana-National Rural Livelihoods Mission)

Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM), a flagship programme of Ministry of Rural Development aims at eliminating rural poverty through mobilizing poor women into community institutions like Self Help Groups (SHGs) and strengthening their livelihood base by accessing necessary credit from banks.
The Mission was launched in June, 2011 and as on 15th December, 2021, 8.04 crore rural women have been mobilized into 73.5 Lakh Self Help Groups and it is envisaged that by 2024, about 10 crore women would be mobilized into Self Help Groups.
During this Financial Year upto 30th November, 2021, 27.38 lakhs SHGs have been provided credit by banks to the extent of Rs 62,848 Crores and total credit accessed by the women SHGs is more than Rs.4.45 lakh crores since April, 2013, inter alia to make adequate investment in productive enterprises. The outstanding balance is of more than Rs. 1,33,915 crores with just 2.49% NPA.
The Mission is using Community Based Repayment Mechanism (CBRM) which is community managed where by a committee with representatives drawn from various SHGs or their federations take responsibility of monitoring SHG banks linkage and also ensure prompt repayment by SHG to banks by enforcing rules and social pressure.

About HDFC bank:

Excellence by Saikat Sir