Women's SHG fund to get cabinet nod in next meet

NEW DELHI: Almost a year after Finance Minister Pranab Mukherjee announced a Rs 500-crore fund for women's self help groups ( SHG) in the 2011-12 budget, the finance ministry may finally be able to get it functional.

The launch of the fund, which was to be used to provide cheaper loans to woman, was delayed due to inter-ministerial wrangles with the rural development ministry raising some objections.

"Cabinet should clear it in next meeting. There were some issues which have been sorted out in consultation with the rural development ministry," said a finance ministry official, requesting anonymity.

At present there are over 6 lakh women SHGs who hold a bank account but only 50% of them avail loan from banks. Pranab Mukherjee in 2011-12 budget had announced, 'Women's SHG's Development Fund' with a corpus of 500 crore to empower women and promote self help groups. The ministry of rural development had suggested that loans given to SHGs be brought under priority sector lending of banks and recommended a dedicated national bank for women SHG instead of a one-time fund.

"Both the issues need approvals from the Reserve Bank of India. As of now there has been no significant development on any of these proposals," the above quoted official said.

The proposed SHG fund will be operational under National Bank for Agriculture and Rural Development (Nabard), and will also help woman to get access to various financial services, the finance ministry official said.

"It's essential that the beneficiaries of the fund are also made aware of other government schemes so that inter-linkages can be formed," said an official with Nabard. Rural development ministry also runs Swarnjayanti Gram Swarozgar Yojana (SGSY), self employment programme which involves the participation of Self Help Groups (SHGs).