How to Establish SHG-Bank Linkage: A Case of Anarde Foundation

SHG-Bank Linkage Programme or self-help group (SHG) promotion approach has emerged predominantly the significant approach for the growth and development of microfinance sector in India. Started by National Bank for Agriculture & Rural Development (NABARD) in early 1990s as an experiment with MYRADA-NGO in Karnataka, it has undergone from pilot phase to consultation phase to implementation phase. The SHG promotion approach is based on the simple preposition where NGOs or banks motivate poor people to come into groups, mobilize their savings and finally link them with banks for credit support to start income. There are three models of linkage. These are i) bank directly promoting SHGs and providing credit to them, ii) NGO acting as SHPI and linking SHGs with banks for credit support and iii) NGO acting as intermediary. Anarde Foundation, one of the leading SHPIs in India, started group linkage in North Gujarat in 1997 with the support of NABARD. But it could not sustain the project in the long run. This case is the reflection of the Project of SHG-Bank Linkage implemented by Anarde Foundation.