Loans for SHGs for Productive Purpose_Component under the Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY- NRLM) (Central)
Did you know that the Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) offers financial assistance to women Self Help Groups (SHGs) for productive purposes? This scheme provides concessional loans to SHGs at 7% interest rates, enabling them to engage in income-generating activities.
Here, we’ll explore everything you need to know about the scheme—its objectives, benefits, eligibility criteria, application process, and success stories. Let’s dive in!
What is the DAY-NRLM?
The Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) is a flagship program of the Government of India aimed at poverty reduction. It focuses on building strong institutions of the poor, particularly women, and empowering them through financial inclusion and livelihood opportunities.
Key Objectives of the DAY-NRLM
· Empower Women: To empower women through financial inclusion and economic independence.
· Poverty Reduction: To reduce poverty in rural areas by providing sustainable livelihood options.
· Community Development: To strengthen community institutions like SHGs and federations.
· Financial Inclusion: To enhance access to credit and financial services for rural communities.
Eligibility Criteria for the DAY-NRLM Loan Scheme
· Active SHG: The SHG must be actively functioning for at least 6 months.
· Good Standing: The SHG should adhere to 'Panchasutras' – regular meetings, regular savings, regular internal lending, timely repayment, and proper book-keeping.
· Eligibility Criteria: The SHG must meet the eligibility criteria set by NABARD.
Benefits of the DAY-NRLM Loan Scheme
· Concessional Interest Rates: Loans are available at a subsidized interest rate of 7%.
· Additional Interest Subvention: In certain districts, an additional 3% interest subvention is available for prompt repayment.
· No Collateral/Margin: Loans up to ₹10 lakhs can be availed without collateral or margin money.
· Flexible Repayment: Repayment schedules are flexible and tailored to the needs of the SHGs.
How to Apply for the DAY-NRLM Loan
1. Approach the Bank: Contact the bank where the SHG maintains its account.
2. Check Eligibility: Verify eligibility for the loan based on the SHG's savings history and other criteria.
3. Submit Application: Submit a loan application to the bank using the common application form recommended by the Indian Bankers' Association (IBA).
Documents Required for Application
· Proof of Identity: Voter ID, Bank Passbook, etc.
· Other Documents: Recommendation Letter, Agreement, Identity Verification Documents (of establishment).
Success Stories Under the DAY-NRLM
The DAY-NRLM Loan Scheme has transformed the lives of thousands of entrepreneurs. Here are two inspiring examples:
1. Rikme M Sangma, Meghalaya:
From a life of poverty and hardship, Rikme, a farmer's daughter, built a successful business. Joining a Self-Help Group, she utilized small loans to invest in livestock and farming. Today, she is a thriving entrepreneur, demonstrating the power of resilience and community support.
2. Meera Sangma, Meghalaya:
Hailing from a large, impoverished family in Ganol Apal, Meera faced hardship early on. Joining the "Wega SHG" empowered her not only financially but also with valuable knowledge and skills. Through the group, she gained confidence and the ability to navigate government services, opening doors to a brighter future.
FAQs About the DAY-NRLM Loan Scheme
1. What is the maximum loan amount available?
₹3,00,000 per SHG.
2. Can I apply if my SHG is less than 6 months old?
No, the SHG must be active for at least 6 months.
3. Is collateral required for the loan?
No collateral is required for loans up to ₹10 lakhs.
Why Should You Apply for the DAY-NRLM Loan?
The DAY-NRLM loan scheme provides a valuable opportunity for women SHGs to access affordable credit for income-generating activities. By availing of these loans, SHGs can:
· Improve livelihoods: Enhance their income and improve their living standards.
· Create employment: Generate employment opportunities for themselves and other community members.
· Reduce poverty: Contribute to poverty reduction in rural areas.
· Empower women: Gain financial independence and play a more active role in their communities.
Conclusion
The DAY-NRLM loan scheme is a crucial component of the government's efforts to empower women and reduce poverty in rural India. By providing access to affordable credit and supporting the growth of SHGs, this scheme plays a vital role in fostering economic development and improving the lives of rural communities.