The objectives of SHGs is to inculcate the habit of thrift, banking culture in availing loans for productive purposes and repaying the same over a period of time and in the process to gain the economic prosperity through loan / credit.

  • 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 out of its own resources.
  • Democratic working of the group, wherein all members feel that they have a say should be evident.
  • The group should be maintaining proper accounts /records.
  • The branch should be convinced that the group has not come into existence only for the sake of participation in the project and availing benefits there under. There should be a genuine need to help each other and work together.
  • The SHG members should preferably have homogenous background and interests.
  • The interest of the NGO or the Self Help Promoting Institution (SHPI) concerned, if any, in the group is evident and the agency is helping the SHGs by way of training and other support for skill up gradation and proper functioning.
  • In addition to criteria mentioned above, following criteria should be followed:
    • Village Panchayat leaders should not normally be the office bearers or leaders of SHG.
    • There should not be any interference from local authority/ies.
    • Satisfactory internal savings and credit activity for at least 6 months.
    • Proper book keeping system and procedures for lending and savings.
  • If any of these criteria are not met, steps should be taken to remedy the situation by training, by arranging visits to SHGs working well etc, if necessary, with the assistance of an NGO/NABARD/Bank.
  • It would be prudent to select SHGs only from a compact & smaller geographical area so as to provide effective guidance and exercise proper supervision.
  • Branches may be required to provide training to members of SHG in book keeping, financial management, income generating` activities etc., with the help of an NGO.
  • No credit be extended to SHG without training or before ensuring its members have the necessary capability to participate in SHG.

Quantum and Margin Upto ₹. 10.00 Lakhs, Margin NIL, No Collateral
Above ₹. 10.00 Lakhs and Upto ₹. 20.00 Lakhs , Margin 10% , No Collateral
CGFMU For SHG Loans upto ₹. 20.00 Lakhs to be covered under CGFMU Mandatorily.
Security Hypothecation of Assests created out of Bank Finance
Repayment for Term Loans
  • The first dose of loan may be repaid in 24-36 months in monthly/quarterly instalments.
  • The second dose of loan may be repaid in 36-48 months in monthly/quarterly instalments.
  • The third dose of loan may be repaid in 48-60 months based on the cash flow in monthly/quarterly instalments.
  • From the fourth dose onwards loans may be repaid between 60-84 months based on the cash flow in monthly/quarterly installments.
Rate of Interest

For Agriculture and allied activites: (Excluding food and agro processing units )

S.No Loan amount Rate of interest
1. Upto ₹. 3.00 Lakhs 7%
2. Above ₹. 3.00 Lakhs to ₹. 5.00 Lakhs 1 Year MCLR
3. Above ₹. 5.00 Lakhs
Slab (Marks Secured ) Spread over MCLR
A Grade 1.25
B Grade 2.00
 

B. For Food and Agro processing units:

S.No Loan amount Rate of interest
1. Upto ₹. 3.00 Lakhs 7%
2. Above ₹. 3.00 Lakhs to ₹. 5.00 Lakhs RLLR
3. Above ₹. 5.00 Lakhs
Slab (Marks Secured ) Spread over MCLR
A Grade 1.25
B Grade 2.00
PMJDY OD ₹. 5000 PMJDY OD for all the women members having PMJDY OD
In case of CCL Loans

In case of CCL, banks are advised to sanction a minimum loan of ₹. 6 lakhs to each eligible SHG for a period of 3 years with a yearly drawing power (DP). The drawing power may be enhanced annually based on the repayment performance of the SHG. The drawing power may be calculated as follows:

  • DP for the first year: 6 times of the existing corpus or minimum of ₹. 1.5 lakhs, whichever is higher.
  • DP for the second year: 8 times of the corpus at the time of review/enhancement or minimum of ₹. 3 lakhs, whichever is higher.
  • DP for the third year: Minimum of ₹. 6 lakh based on the Micro Credit Plan (MCP) prepared by SHG and appraised by the federations/support agency and the previous credit history.
  • DP for the fourth year onwards: Above ₹. 6 lakhs, based on the MCP prepared by SHG and appraised by the federations/support
In case of term loans
  • First dose: 6 times of the existing corpus or minimum of ₹. 1.5 lakh, whichever is higher
  • Second dose: 8 times of the existing corpus or minimum of ₹. 3 lakh, whichever is higher
  • Third dose: Minimum of ₹. 6 lakhs, based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history.
  • Fourth dose onwards: Above ₹. 6 lakh,based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history.
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Last updated on 11-12-2023 12:14 PM

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