Women's self-help groups to get cheaper loans (at 7%) under NRLM

The Indian Government has approved the proposal of providing loans to Women Self-Help Groups (SHGs) at a lower interest rate of 7% as compared to present rate ranging between 11.5 – 14% to eradicate poverty through women empowerment. The programme will be operated under NRLM (National Rural Livelihood Mission) to provide loans up to Rs.3 lakhs at subsidized interest rate by focusing on 150 backward districts, including 82 Integrated Action Plan districts, affected by Naxal menace. 25 lakh women SHGs are expected to be covered under the benefit of scheme.
About Women Self – Help Group (SHGs)

  • A Women Self-Help Group (SHG) is a village-based financial intermediary comprising of 10–20 local women, started by Non-Government Organisations for women empowerment.

The objectives of women SHGs are:

  • Development of  leadership abilities among poor people
  • Increase in enrollment in schools
  • Improvement in nutrition level
  • Empowerment of women
  • Promotion of small savings among members

Additional benefit of cheaper loans

  • Additional 3% interest rate will be reduced if women SHGs will repay the loan amount on due date and effective interest rate will be 4% from 7%.

Who will bear the interest cost over and above 7%?

  • The difference between market rate and subsidized rate will be borne by Rural Development Ministry and State government in proportion of 3:1 which amount to Rs.560 crore.


  • A Poverty reduction programme based on employment generation by adoption of a multi-pronged strategy.
  • Launched by UPA chairperson Sonia Gandhi in June 2011
  • Objective:  Creating efficient and effective institutional platforms of the rural poor, thus by enabling them to increase household income via sustainable livelihood enhancements and meliorated access to financial services.



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