Region-specific Initiatives
- NABARD has intensified its efforts for roping in new partners for promotion and linkage of groups in regions where the growth of groups has not been commensurate with potential
- Priority has been assigned to awareness- building and for identification of NGOs and other partners in 13 priority states, which account for 70% of rural poor in the country.
Capacity Building
- NABARD sponsors capacity building programmes for various partners in the field of microFinance to sensitise and equip them with concept & nuances of SHG bank linkage programme.
- NABARD provides training inputs on SHG financing to training establishments of participating banks, to help them to internalise the training requirements at their level.
- NABARD gives technical support to banks to evolve suitable intermediate structures like Farmers' Clubs to increase the outreach of their branches in promotion and linking SHGs
- NABARD supports and helps banking institutions (especially RRBs & cooperative banks) to take on the role of Self Help Promoting Institutions (SHPIs)
Support to Governments
- Necessary assistance is provided to the governments by NABARD for dovetailing mF practices with the poverty alleviation programmes
- NABARD also encourages the association of Panchayati Raj Institutions (PRIs ) in adopting group processes for maximization of empowerment.
- NABARD, in association with Lal Bahadur Shastry National Academy of Administration, Mussoorie conducts tailor made exposure programme on self help group and microFinance for senior and middle level officers of Indian Administrative Services (IAS) who are posted as district collectors/ Chief Executive Offices of local administrative set ups (Zilla Parishad)
Support to NGO Partners
- Several steps have been taken by NABARD for capacity building of NGOs which partner in promotion and nurturing of SHGs. The emphasis is on involving a large number of NGOs. Special focus is on those NGOs participating in watershed development, health, literacy and women development, to encourage them to take up promotion, nurturing and linkage of SHGs as an 'add-on' activity.
- NABARD has a scheme of part-financing the cost of promotion of groups by NGOs.
- NABARD has developed specialized programmes for use by CEOs of NGOs for appropriately envisioning this as an add-on concept. Separate programmes have also been designed for NGO field staff to appreciate the nuances of SHG functioning.
Alternate mF practices
- The NGOs and other local bodies at village, block and district levels in the North Eastern States are encouraged to take up alternative micro-credit delivery mechanisms through direct funding.
- Formation and operation of SHG Federations is supported and encouraged by NABARD. Similarly, networking of NGOs is also encouraged.
Coordinating mF Efforts in India
NABARD coordinates the mF activities in India at international/ national/ state / district levels. These include organizing international/national Workshops, Seminars, etc for experience sharing, Organizing National and State level Meets of Bankers and NGOs etc.Dissemination of best practices in SHG / microFinance.
Monitoring and Review
Block/district/state level review meetings are organised and/or organised by NABARD. The relative documentation and database is also carried out by NABARD. In addition, periodical Monitoring studies are conducted through NABARD/Bank Officers. Internal Impact Studies and are conducted by NABARD periodically.
Other Initiatives:
MicroEnterprise Development Programme (MEDP) for Matured SHGs
The progression of SHG members to take up micro enterprise involves intensive training and hand holding on various aspects including understanding market, potential mapping and ultimately fine tuning skills and entrepreneurship to manage the enterprise. Hence, a separate, specific and focussed skill-building programme ‘Micro Enterprise Development Programme (MEDP)’ has been formulated. This involves organizing short duration, location specific programmes on skill upgradation / development for setting up sustainable micro-enterprises by matured SHG members. The duration of training programme can vary between 3 to 13 days, depending upon the objective and nature of training. The training may be conducted by agencies that have background and professional competency in the field of microEnterprise Development with an expertise in skill development.
Scheme for Capital/ Equity Support to Micro-Finance Institutions (MFIs) from MFDEF
The scheme attempts to provide capital/equity support to Micro Finance Institutions (MFIs) so as to enable them to leverage capital/equity for accessing commercial and other funds from banks, for providing financial services at an affordable cost to the poor, and to enable MFIs to achieve sustainability in their credit operations over a period of 3-5 years.
Scheme for financial assistance to banks/ MFIs for rating of Micro Finance Institutions (MFIs)
In order to identify MFIs, classify and rate such institutions and empower them to intermediate between the lending banks and the clients, NABARD has decided to extend financial assistance to Commercial Banks and Regional Rural Banks by way of grant. The banks can avail the services of credit rating agencies, M-CRIL, ICRA, CARE and Planet Finance in addition to CRISIL for rating of MFIs. The financial assistance by way of grant for meeting the cost of rating of MFIs would be met by NABARD to the extent of 100% of the total professional fees subject to a maximum of Rs.3,00,000/-/-. The remaining cost would be borne by the concerned MFI. The cost of local hospitality (including boarding and lodging) towards field visit of the team from the credit rating Agency, as a part of the rating exercise, would also be borne by the MFI. Those MFIs which have a minimum loan outstanding of more than Rs. 50.00 lakh (Rupees fifty lakh only) and maximum of Rs 10 crore (Rupees Ten crore only) would be considered for rating and support under the scheme. Financial assistance by way of grant would be available only for the first rating of the MFI.
MFIs availing Capital Support and/or Revolving Fund Assistance from NABARD are also eligible for re-imbursement of 50% of the cost of professional fee charged by Credit Rating Agency for second rating subject to a maximum of Rs.1.50 lakh (i.e 50% of Rs.3 lakh). This will be in addition to the re-imbursement of professional fee for first rating of the MFI.
Refinance support to banks for financing mFIs
The scheme is to provide 100% refinance to banks for financing mFIs. Interest rate on refinance to Commercial Banks and Regional Rural Banks on their loans to mFIs for on lending to clients will be at 3% less than that charged by banks subject to minimum interest rate of 7.5% for all regions and all eligible purposes. The revised rate of interest is applicable to refinance disbursed on or after 01 March 2010.
Scheme for financing matured SHGs for Farm Production and Investment activities
The objective of the scheme is to facilitate the members of matured SHGs to meet their credit requirement for farm production and investment activities and to enable them to diversify their income generating activities. Term Loan and Cash Credit limit given by the banks for a period of five years to SHGs exclusively for farm production and investment activities covering agriculture sector and allied activities. Banks can also sanction composite loans by combining consumption credit to the extent of 30% of the total limit. Matured SHGs which have successfully utilised bank loans and whose members have moved from consumption requirements to production requirements, may be considered for financing for farm production and investment activities. Due freedom may be given to SHGs to monitor and ensure end-use of credit as is usually practiced by banks under SHG Bank Linkage Programme. Refinance - 100% of the bank loan under Automatic Refinance facility (ARF). The refinance provided to the banks under the scheme will be payable in 5 years at half yearly intervals.
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