Finance Minister Arun Jaitley on Tuesday urged banks and financial institutions to step up focus on improving credit flow to the unorganised sector and, thereby, help increase employment in the country.
Addressing a seminar to mark the silver jubilee of the Nabard-led self-help group-bank linkage programme, Jaitley said that the reality of India is that there are more people in the unorganised sector than in the organised.
“If the resources of banks and financial institutions through various schemes are diverted towards this (unorganised) sector, it will help create more employment,” Jaitley said. This event was held on the eve of the 36th Foundation Day of Nabard.
Jaitley said he was hopeful that the Nabard-led SHG-bank linkage programme would further expand in the coming days.
Over a span of 25 years, the linkage programme has grown into a massive movement with 85 lakh SHGs across the country now a part of it.
The total loan exposure of the banking system to these SHGs is about ₹61,000 crore. The SHGs also hold about ₹16,000 crore in savings in the banking system as of end-March 2017.
Jaitley said that there is a natural tendency for certain sections of society to be left behind in the growth story of a nation.
“This happens in spite of all our best intentions and various development schemes of the government. The Nabard-led SHG-bank linkage programme gains increased importance because it addresses these very sections of society which are excluded even after development,” he said.
Anjuly Chib Duggal, Secretary, Department of Financial Services, said that the Centre was working towards linkage of the SHG movement with the social security schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Jeevan Jyoti Suraksha Bima Yojana and Atal Pension Yojana.
“Apart from credit linkages, we are also offering occupational training, entrepreneurial training and financial literacy training to SHGs,” she said
Through 470 offices of Nabard and SIDBI, schemes of relevance to SHGs are being provided. Also, efforts are on to facilitate linkage with more distant markets.
“Over a period of time, we are hopeful of making some of the SHGs become suppliers or buyers and make them work together to increase their heft and reach bigger markets.”
There is also a need to help the members of SHGs grow beyond SHGs, she said.
“Although the SHG movement is tremendously empowering, it should not become a cocoon. We will look to push MUDRA and Startup India schemes to the SHG members who are looking to pursue individual entrepreneurship,” Anjuly said.
Speaking on the occasion, Harsh Kumar Bhanwala, Chairman, Nabard, said that the SHG-bank linkage programme is not only about linkage, but is also about livelihood and financial literacy. As much as 90 per cent members of SHGs are women. The total fund-based business of SHGs is estimated at ₹1 lakh crore, he said.
“The programme has matured into a source of social capital, finance capital and in recent years IT-based capital,” Bhanwala said.