Telangana SHGs chart a new course

TS government provides bank linkage of Rs 10,000 crore to 2.67 lakh SHGs during 2020-21 when Covid-19 was on the rampage

Hyderabad: At a time when most States are struggling to stay afloat and extend support to the rural-folk including Self Help Groups (SHGs), the Telangana State government has a major achievement under its belt – providing bank linkage of Rs 10,000 crore to 2.67 lakh SHGs during the 2020-21 financial year when Covid-19 was on the rampage.

This helped in registering a record 53 per cent growth rate and this is first time that the State Government managed to achieve such a remarkable growth, a senior official from Panchayat Raj Department told Telangana Today.

The Society for Elimination of Rural Poverty (SERP), which has the means to encourage SHGs, launched the bank linkage to enable poor households access adequate formal credit at their doorsteps through the SHGs.

“The idea is to facilitate proper utilisation of loans and even service existing high cost debts. It is also aimed at improving their livelihood and finally, implement Microcredit Plan (MCP) wherein households reach a stage where they can assume a higher degree of risk,” the official said.The credit worthiness of these groups, which are otherwise unbanked, having no collaterals, have been built on their group discipline, repayment culture and accumulated corpus funds; and this resulted in SHGs’ bank linkage programme, under which they are provided with credit by service area banks as per Micro Credit Plans of SHGs.

“The State government’s achievement, coming at a time when Covid was a serious issue, only shows the confidence banks have on our government led by Chief Minister K Chandrashekhar Rao,” the official said, adding that what was more striking about the achievement was the confidence of banks on the SHGs’ capacity to repay the loans.

Stating that all the District Collectors worked hard to achieve this growth rate, the official said it is not just about achievements but about strength of the rural economy. “It puts more money in the hands of people living in rural areas,” he explained.

Interest on all loans taken by SHGs is paid by the State government under “Vaddi leni runalu” programme for which this year an amount of Rs. 3,000 crore has been allocated in the budget, the official said, adding that this will help SHGs to avail loans at zero per cent interest. Another striking aspect about Telangana SHGs is that the Non-Performing Assets (NPAs) are below 2 per cent, the official informed.

This was mainly achieved by the regular supervision and guidance of Panchayat Raj Minister E. Dayakar Rao, he added.