Rashtriya Mahila Kosh

The Rashtriya Mahila Kosh (RMK) was a national-level autonomous body established in 1993 by the Government of India under the aegis of the Ministry of Women and Child Development. Its primary objective was to provide concessional, collateral-free micro-credit to poor and disadvantaged women, particularly those in the rural and unorganised sectors, in order to promote their socio-economic empowerment. RMK operated for nearly three decades as an instrument of women-centred micro-finance before being phased out in line with government reforms initiated in the 2020s.

Establishment and Objectives

RMK was registered under the Societies Registration Act, 1860 and began functioning with an initial corpus provided by the Government of India. Its creation was rooted in the recognition that conventional banking structures largely excluded poor women due to their lack of collateral, small loan requirements, and informal employment status. RMK thus sought to bridge this gap by promoting micro-finance through intermediary organisations.
The detailed objectives of RMK included:

• Credit as an instrument of change: Promoting micro-credit as a tool for socio-economic development by providing financial and social support services to women.
• Employment and asset creation: Supporting schemes for sustaining employment, generating new opportunities, creating and redeeming assets, and addressing consumption and contingent needs.
• Participatory approaches: Encouraging the organisation of women’s groups to utilise credit resources effectively and achieve self-reliance.
• Innovation in outreach: Supporting experimental and voluntary sector initiatives that adopted innovative methodologies for reaching poor women.
• Integration with state mechanisms: Sensitising government institutions to recognise poor women as vital clients of formal credit systems.
• Research and dissemination: Promoting studies, documentation, and training on credit management and replicable success models.
• Networking and federation: Encouraging the formation of federations of women’s organisations for sharing experiences and building capacities.
• Entrepreneurship promotion: Supporting skill development and enterprise creation among women.
• Partnerships: Cooperating with governments, financial institutions, industry, and voluntary bodies to further RMK’s mission.
• Non-discrimination: Ensuring that all benefits were extended without discrimination on grounds of religion, caste, class, or community.

Operating Model and Loan Schemes

The operational model of RMK was based on lending to Intermediary Micro-Finance Organisations (IMOs), including NGOs, cooperatives, and self-help group federations. These intermediaries then disbursed small loans to women for entrepreneurial and livelihood activities. RMK did not lend directly to individuals but functioned as a refinancing and promotional body.
Over the years, RMK introduced several loan schemes to meet diverse needs:

• Loan Promotion Scheme: Encouraged new women’s groups to access credit facilities.
• Main Loan Scheme: Provided general micro-credit for income-generating activities.
• Gold Credit Scheme: Offered larger loan amounts to established SHGs and IMOs with proven repayment records.
• Housing Loan Scheme: Supported women in constructing or improving housing facilities.
• Working Capital Term Loan: Provided funds for sustaining small businesses and enterprises.

RMK revised its loan guidelines in 2017–2018 to simplify processes and expand reach. To promote awareness, it launched advertisement drives, video campaigns, and radio jingles through the National Film Development Corporation (NFDC), as well as digital outreach initiatives.

Impact and Contribution

During its active years, RMK extended financial assistance to thousands of women, especially in rural India, enabling them to engage in small businesses such as tailoring, food processing, animal husbandry, handicrafts, and local trade. It also facilitated housing improvements and consumption needs, reducing women’s dependence on exploitative moneylenders.
RMK played an important role in promoting self-help groups (SHGs) and participatory lending models, which later formed the foundation of larger national financial inclusion schemes. It contributed to the expansion of women’s access to institutional finance and served as an early catalyst for women-led entrepreneurship in India.

Decline and Closure

By the late 2010s, the Indian financial ecosystem had undergone significant transformation. Large-scale initiatives such as the Pradhan Mantri Jan Dhan Yojana (2014), the Pradhan Mantri Mudra Yojana (2015), and expanded SHG-Bank Linkage programmes provided direct, widespread access to credit for women without the need for intermediary mechanisms like RMK.
In November 2020, the report on Rationalisation of Government Bodies, prepared by the Principal Economic Adviser to the Government of India, recommended the closure of RMK. The report argued that RMK had lost its relevance and utility in the new financial landscape and that duplication of credit schemes should be avoided to streamline governance.
Following these recommendations, the Government decided to wind down RMK. By the mid-2020s, the institution had ceased active operations, with women’s credit needs being met by more integrated and extensive government financial inclusion schemes.

Legacy

Although no longer operational, the Rashtriya Mahila Kosh holds an important place in India’s socio-economic history. It represented one of the earliest structured efforts by the state to institutionalise women-centric micro-finance at the national level. RMK demonstrated the viability of participatory lending and SHG models, which influenced later financial inclusion strategies.