Status of Microfinance in India 2012-13

This report analyzes the journey traversed by the "Self Help Group- Bank Linkage Program (SHG-BLP)," which was an attempt to bring the 'unbanked' poor into the formal banking system. In addition, the report provides an analysis on the progress under microfinance as at the end of March 2013. It lays its belief in the thought that the success of SHG-BLP or financial inclusion should be assessed not on the basis of savings or credit linkage or on social capital leveraged, but on the basis of the improvement in the quality of lives of its members. To achieve this, the National Bank for Agriculture and Rural Development (NABARD) envisions a few strategic focus points for the next four years, a few of which are listed under:

• All eligible poor rural households in the country to be covered through SHG-BLP by March 2017;
• Convergence with government programs like National Rural Livelihood Mission (NRLM) to maximize benefits to the SHG members;
• Special schemes to revive dormant SHGs through effective capacity building and hand holding support;
• Initiate additional financial literacy drive at the SHG level to eliminate over-indebtedness at the member-level, especially in high SHG density states;
• Focus on convergence of SHG-BLP and financial inclusion initiatives.