Progress of Microfinance in India under SHG-Bank Linkage Model
Keywords:
Microfinance models, SHG-BLP, MFIs, ProgressAbstract
The Indian Microfinance Sector has witnessed a phenomenal growth over the past few years. In India, microfinance is provided majorly through two models- the SHG-Bank Linkage Model (SHG-BLM) and Microfinance Institution (MFI)- Bank Linkage Model. The SHG-BLM developed by NABARD is the most widely used model of micro finance in India. National Bank for Agriculture and Rural Development (NABARD) launched the pilot phase of the SHG-BLP in February 1992,as per which Self Help Groups (SHGs) were connected to banks for both savings and credit disbursement. Since1992, the programme has grown manifold. Today, the SHG - Bank Linkage Programme (SHG-BLP) is the largest microfinance programme in the world because of its size and the population it touches. In this background the paper attempts to study the progress made under the SHG-Bank Linkage Model in India during the last decade.While the SBLP model remains the most widely used model of micro finance in India, the MFI model has also gained momentum in the recent past. The MFI Model is more recent and has grown rapidly from less than one million borrowers in 2003 to nearly 40 million borrowers in 2017.
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