Loan interest waiver for women-run SHGs in Bihar

Decision taken at a meeting chaired by CM Nitish Kumar

By Alok Gupta
Published: Friday 22 November 2013

 Along with reducing the burden of loans, the state government is also working on provide technical training to SHGs. (Photo credit: Wikimedia Commons)Bihar chief minister Nitish Kumar on Friday announced a considerable waiver on interests paid by women self help groups (SHGs) in the state on bank loans. The groups would be provided loans at an interest rate of just four per cent instead of the present rate of 12 per cent and the state will pay eight per cent of the loan interest directly to the banks.

The decision was taken after a review meeting of Bihar State Rural Livelihood Mission after counsultation with Amrit Lal Meena, secretary state rural development department and Arvind Chaudhary, managing director of Jeevika, Bihar state rural livelihood mission.

More SHGs for Bihar soon

Nitish Kumar also said that women run SHGs need support to enhance their capabilities. For this, the state rural development department and Jeevika had been advocating a loan-interest relief to 1.5 lakh women run SHGs in the state. These groups are a source of economic benefits to around 15 lakh people in the state. Therefore, the state is now planning to create about one million such SHGs and connect about 12 million people of the state for better livelihood.

Amrit Lal Meena told Down To Earth that a significant waiver will also help SHGs in maintaining good margin money; reduce dependency on local money lenders and also to expand their work to a large population. “Women run SHGs in the state have been promoting livelihood schemes intensively but a whopping interest rate has made them less effective,” he said.

Meena also pointed out that at present stringent criteria have been fixed for waiver on loans. The suggested waiver would be available only to those SHGs which have a good track record of loan repayment. The government is planning to give further waivers to those SHGs who also maintain a good track record of implementation of livelihood projects along with loan repayment.

“There is a plan for additional 3 per cent tax curtailment on loan interest rate for SHGs with extremely good performance record,” Meena added.

Along with reducing the burden of loans, the state government is also working on providing technical training to SHGs. Some of the selected areas in which training would be provided include dairy, fishery and goat rearing. Bihar is also aiming at giving a boost to income levels of women and raising their standard of living through SHGs.

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