Nabard plans to scale up the digitisation of self-help group (SHG) accounts and expand digital coverage to 100 districts by end of this fiscal, Harsh Kumar Bhanwala, Chairman, Nabard, said. This could lead to an additional ₹10,000 crore credit flow from the banking system to the SHG movement in the country in a year, Bhanwala told BusinessLine here on Tuesday.

Another interesting dimension is that this digital intervention will also help build credit history for each member of an SHG and this could be passed on to credit bureaus.

One of the hurdles for banks in extending credit has been the absence of credit history for the members of SHGs, he pointed out Today, the digitisation coverage is for 25 districts with linkage to a Nabard portal called e-shakti so that any movement in an SHG account is automatically conveyed to e-shakti.

Bank credit to SHGs in these 25 districts has grown 100 per cent, Bhanwala said. In due course, there is intent to have this digital intervention in all the 640 districts, he added.

Bhanwala said Nabard has, in the last few years, taken “vibrant steps” to put the SHG-bank linkage programme on the technology platform.

The digital intervention started in 2015 in two districts — Dhule in Maharashtra and Ramgarh in Gujarat. “We were faced with challenges on the SHG-bank linkage programme. All the financial inclusion initiatives of the Indian government were technology driven. This was the one of the oldest ones — but no technology.

“We felt the need for major technological intervention to surmount the challenges such as less staff, etc. Now bank managers get information about SHGs at their desktops,” he said Nabard, which will celebrate its 36th Foundation Day on Wednesday, has chosen ‘SHG-bank linkage’ as its theme for the current year.

The highlight of the SHG scheme, which was main-streamed in 1992 when C Rangarajan was the Reserve Bank of India Governor, is that it inculcated financial discipline, especially when the beneficiaries are non-registered entities and are not providing any collateral.

comment COMMENT NOW