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Welcome to Andhra Bank
Self Help Groups
Despite vast expansion of the formal credit system encompassing spheres of social and mass banking, the dependence of the rural poor on moneylenders still continues in many areas, especially for meeting their emergent needs. Under these circumstances, a non-formal agency for credit supply to the poor, in the form of Self Help Groups, emerged as a promising partner to the formal credit system. SHGs are a part of micro credit.
The objectives of Self Help Groups are to:
inculcate saving and banking habits among the poor;
secure them with financial, technical and moral strengths;
enable availing of loan for productive purposes and repaying the same over a period of time, and in the process gain economic prosperity;
SHG - Bank Linkage programme-emergence:
Experience of Bangladesh Grameena Bank paved way.
Rigidities of formal credit system and the plight of the poor necessitated to form into groups by adopting the concept "Self Help & Mutual Help".
NABARD has formulated pilot project for Linking SHGs with Banks in 1992.
Criteria for selecting SHGs :
The group should have been in active existence for at least a period of six months.
The group should have successfully undertaken savings and credit operations from its own resources.
Democratic working of the group wherein all members feel that 'they have a say' should be evident.
The group is maintaining proper accounts / records.
The SHG members should preferably have homogeneous background and interest.
Estimation of credit requirements:
Ist Dose:1:4 times of the corpus or Rs. 50,000/- whichever is higher.
2nd Dose:1: 10 times of the corpus or Rs. 1,00,000 in case of rural , Rs.1,50,000 in case of urban areas whichever is higher.
3rd and Subsequent Doses : Financing as per Micro Credit Plan
Repayment period:
Loans are repayable in monthly installments ranging from 36 to 60 months
Interest Rates:
Base Rate 8.25 + 3.75 = 12.00 % p.a.
Bank "Rating System" Critical Rating Index (CRI)
The following points are covered under CRI.
Composition of group.
Age of groups.
No. of meetings per month.
Attendance of meetings by members.
Maintenance of minutes book.
Participation of members in discussion
Savings frequency.
Mode of recovery.
Books of accounts.
Bye laws / group rules.
Bank's Rating System - Selection Criteria:
Maximum marks stipulated: 100
"A" Rating-70-100marks
"B" Rating-50-70marks
"C" Rating-Less than 50 marks Capacity building is required.
Security:
No Collateral Security upto an aggregate limit of Rs.5.00 lacs per group
If aggregate credit limits exceeds Rs.5.00 lacs, SHGs should offer collateral security.
Road AHEAD:
Serving SHG clientele at their door step through smard cards
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