Scaling the Financial Sustainability of SHGs-Bank Linkage Programme of Micro Financing in an Underdeveloped Region
Scaling the financial sustainability of SHGs-Bank Linkage Programme of Micro Financing in an Underdeveloped Region, Prajan, Vol. XXXVIII, No.4, 2009-10, Pp-253-267
Posted: 16 Apr 2014
Date Written: March 31, 2010
Abstract
Financial sustainability of micro financing endeavour through SHG-Bank Linkage Programme (SBLP) is crucial as nearly 40 million beneficiaries are linked to the formal banking network of India. Scaling the sustainability through a composite index is one of the several attempts. Considering various parameters of SHGs, their linked banks and of the SBLP as a whole a composite index is constructed in the context of Meghalaya, which is an underdeveloped state in the north eastern region of the country. The rising index over a three year of study period provides enough indication towards the sustainability of this programme. Poor loan recovery rate of the banks, negligible share of SHG finance in total loan portfolio of the banks, negative impact of subsidy on the SHGs and high operating expenditures are identified as some of the drags for the financial sustainability of the whole programme.
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