Based on the observations of various research studies and an action research project carried out by National Bank of Agriculture and Rural Development (NABARD), the model of Self Help Group-Bank Linkage Programme or ‘SHG-BLP’ was evolved as a cost effective mechanism for providing financial services to the unreached and underserved poor households.
The NGO sector has played a prominent role of working as a Self Help Group Promoting Institution (SHPI) by organizing, nurturing and enabling credit linkage of SHGs with banks. NABARD later co-opted many others as SHPIs including the rural financial institutions (RRBs, DCCBs, PACS, Farmers’ Clubs (FCs), SHG Federations, NGO-MFIs, Individual Rural Volunteers (IRVs) etc.
These stakeholders were encouraged to take up promotion of SHGs by way of promotional grant assistance from NABARD. This savings-led microfinance model has now become the largest coordinated financial inclusion programme in the world covering almost 101 million households in the country. With more than 86% of the groups being exclusively women groups, the programme has provided a much needed push to women empowerment in the country.