SHG Bank Linkage Programme
MIDS has successfully facilitated the linkage of Self-Help Groups (SHGs) with formal financial institutions, notably ICICI Bank and Federal Bank. These linkages have played a crucial role in providing the rural poor with access to essential financial services, thereby promoting financial inclusion and improving the quality of life for millions.
Key Aspects
Bridging Formal and Informal Sectors
The SHG Bank Linkage Programme connects the informal sector of SHGs with formal financial institutions, promoting financial inclusion and enabling rural poor to access banking services that were previously out of reach.
Role of MIDS
MIDS acts as a facilitator, ensuring that SHGs recommended for bank loans operate systematically with good internal controls and transparency in fund management. This guarantees that the funds are properly utilized and managed.
Financial Inclusion
The primary motive of this programme is to include the rural poor under the services of the banking sector, providing them with greater access to credit, savings, insurance, and other financial services.
Achievements
ICICI Bank Linkage
MIDS has linked numerous SHGs with ICICI Bank, enabling members to directly avail credit from the bank to meet their diverse financial needs. This partnership has enhanced the financial stability and self-sufficiency of SHG members.
Federal Bank Collaboration
MIDS partnered with Federal Bank, Parassala Branch, to scale up bank linkage services for SHGs due to the high demand for credit. A Business Correspondent (BC) agreement ensures prompt and efficient delivery of credit to SHGs and addresses any related issues. The Federal Bank linkage programme was officially launched on July 7, 2023, during MIDS' Silver Jubilee Concluding function. Federal Bank authorities have shown significant interest in financing MIDS SHGs, with ongoing collaboration to plan future disbursements and resolve any divergences.
Impact
Enhanced Financial Access
By linking SHGs with ICICI and Federal Bank, MIDS has provided rural poor families with direct access to financial services, enabling them to borrow, save, invest, and protect their families against risks.
Poverty Alleviation
These linkages have contributed to poverty reduction by allowing SHG members to improve their livelihoods through better financial management and access to credit.
Comprehensive Support
The programme addresses not only financial needs but also focuses on improving health, education, and employment opportunities for its members, thus enhancing their overall social and economic status.
