SHG

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SHG

Self Help Group loan support for small groups working toward economic development.

Concept

Self Help Group is a homogeneous group comprising Min. of 10 and Max. of 20 members

Voluntarily formed to save whatever amount they can conveniently save out of their earnings

Mutually agree to contribute to a common fund of the group

Small loans are given to the members as internal lending for meeting their productive and emergent credit needs from the common fund

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Purpose

To meet the credit needs of the poor

To build mutual trust and confidence between the bankers and the rural poor;

To encourage banking activity both on thrift as well as credit side in a segment of the population that the formal financial institutions usually find difficult to cover;

To enable additional employment generation;

To facilitate women empowerment in case of women SHGs.

Eligibility for Credit Linkage

Credit linkage will be normally after 06 months of successful/satisfactory operations of the SHG with the Bank.

Extent of Loan

Based on the corpus amount of the group, loan can be extended to the group ranging from 1:1 to 1:8 times for first linkage & second linkage

For Third, Fourth and Subsequent linkage – Micro credit plan to be submitted by the Group

Type of Loan

Cash Credit

Security/ Margin

Hypothecation of assets created out of loan

No other collateral security will be insisted upon up to the limits fixed by the bank from time to time except for hypothecation of assets created out of the loan and hypothecation of book debts as primary security.