Bhubaneswar: Under the 5T mandate of Mission Shakti, the State Government has targeted to increase the loan size to Rs 4 lakh per women self-help group (SHG) by the end of Financial Year 2022-23. However, the banks have failed to achieve the target by the end of March 2023.
According to data provided by banks at the recent meeting of the State Level Bankers’ Committee (SLBC), the average SHG loan size during the last financial year stood at Rs. 3.01 lakh, which is Rs 1 lakh less than the target set by the State Government for the banks.
During the last financial year 2022-23 (as on 31 March 2023), 3,65,542 SHGs have been credit linked with loan amounting to Rs. 11005.10 crore against the annual physical & financial credit linkage target of 3,50,000 & Rs. 8750.00 crore respectively. The physical and financial achievement as percentage of the target comes to 104% & 126% respectively. But the average loan size has not been increased as per the desire.
Considering the yearly growth, utilization and repayment of loans, the annual target for the current Financial Year (2023-24) has been fixed for 4,00,000 SHGs amounting Rs. 15,000 crores.
When the State Government aims at graduating SHGs to entrepreneurs, the quantum of loan to the SHGs is crucial for undertaking livelihood and entrepreneurial activities in a sustainable manner. However, the poor show by banks has upset the Government.
To expedite the credit flow to WSHGs, the State Government has proposed for the constitution of the Sub Committee of SLBC in this regard. The Sub-Committee led by Mission Shakti Secretary will look into credit flow to WSHG, Mission Shakti Loan – State Interest Subvention, BCA, Mission Shakti Scooter Yojana, and Financial Literacy program etc. and provide an institutional mechanism for interfacing with the Banks for credit linkage to WSHGs in Rural and Urban Areas.
Banks have been asked to issue suitable advisory to their field offices to adhere the decision taken in the 167th SLBC on minimum loan size to SHGs i.e Rs. 2 lakhs for fresh/1st linkage, Rs. 4 lakhs for 2nd linkage and Rs. 6 lakhs for 3rd linkage onwards irrespective of the SHG corpus.
Considering the growth in demand of credit and women entrepreneurship at the SHG level, the State Government has increased the interest subvention benefits from Rs. 3 lakhs to Rs. 5 lakhs providing loans at 0% effective annual rate of interest to WSHGs (both rural and urban) w.e.f 1 April 2022. This benefit is applicable to SHGs in case of prompt and regular repayment of loans.
Interest subvention claims amounting to Rs. 216.42 crore have been settled under ‘Mission Shakti Loan’ -State Interest Subvention Scheme during 2022- 23, benefitting 3.05 Lakh eligible SHGs. Now, the annual target (FY 2023-24) for Mission Shakti Loan – State Interest Subvention has been fixed to Rs. 250crore.
The banks operating in the state have been impressed upon to educate their field functionaries on the Interest Subvention Scheme so as to aware loanee SHGs about the scheme and facilitate for availing the benefits of the State’s flagship scheme of reimbursement of interest.
Similarly, a total of 2318 WSHG/Federation Members engaged as Business Correspondent Agents (BCAs) across the state. Transactions amounting to Rs. 1159.49 crore have been undertaken by these BCAs during the last financial year 2022-23.
To ensure last mile delivery of banking services in unbanked and underbanked Gram Panchayats, it is targeted to cover all unbanked GPs during the current financial year (2023-24).
Further, the banks have been asked to implement the new scheme–Mission Shakti Scooter Yojana during the current year. Under the scheme, the Government is providing interest subsidy benefit by bringing down the effective rate of interest to 0% (interest free) per annum for bank loan up-to Rs. 1 lakh for purchase of scooter.
Provisioning of financial support towards mobility empowerment of nearly 2 lakh SHG members across the State to be mobile. The scheme will be implemented within a period of 5 years (FY 2023-24 to 2027-28) with a total budget outlay of Rs 528.55 crore.
