Self-Help Model of Microfinance in India: The Journey of Two Decades

摘要

Among all the innovations that emerged in India for extending formal banking services to the unbanked population sections, the self-help group (SHG)-bank linkage programme (SBLP) stands unique. The prototype of the programme was piloted in the early 1990s under the auspices of the National Bank for Agriculture and Rural Development (NABARD) with a view to developing a hybrid credit strategy to serve the rural poor by combining the flexibility, sensitivity and responsiveness of the informal credit system with the strength of technical and administrative capabilities and financial resources of the formal credit institutions. SHGs are small, informal collectives, consisting mostly of women - from a homogeneous class, but self-selected and unrelated - who regularly attend meetings, save, rotate savings among themselves as loans, borrow from formal banks and are willing to put pressure on peers to enforce repayment. The method of micro-financing implicit in the SBLP focuses on gradually building the poor households' financial discipline and credit history by involving members' own money saved over time in the lending operations. Once the groups attain the maturity to handle finances, the banks are encouraged to give them loans without any collateral and at market interest rates. Apart from promoting formal banking activity among hitherto unreached populations, building mutual trust among bankers and the rural poor was also an objective of the experiment. The three major types of banks in the country — commercial banks, cooperative banks and regional rural banks (RRB) — participate in the programme. Over the past two decades, SBLP has come to be represented as the state's approach to microfinance and is seen as a link that connects the social banking era of the 1970s and 1980s with the market and efficiency-driven banking phase introduced around the early 1990s. Currently, it is one of largest microfinance programmes globally, and one of the core rural development/poverty alleviation strategies of the provincial and central governments nationally. It may need to be mentioned here that India is also home to a sizeable number of direct microfinance intermediaries registered as non-profit entities or profit-making companies. The for-profit institutions, known officially as non-banking finance company-microfinance institutions or NBFC-MFIs, have grown steadily over the years and account for about a third of all resources deployed by banks in microfinance in the country. The dichotomous structure of the microfinance sector, with competing models and overlapping 'markets', has caused serious bottlenecks on the way to evolving an effective system of regulation.