Institute for Social and Economic Change

Established in 1972 by Professor V K R V Rao, ISEC is an All-India Institute for Interdisciplinary Research and Training in the Social Sciences

Economic and Social Benefits of SHG-Bank Linkage Programme in Karnataka – isec

Economic and Social Benefits of SHG-Bank Linkage Programme in Karnataka


Among the several SHG models, Self-Help Groups (SHGs) formed under the Self-Help Group-Bank Linkage Programme (SBLP) supported by the National Bank for Agriculture and Rural Development (NABARD), is a prominent one. The programme encourages the members, primarily women, to access banks directly as a group. This helps them enhance their level of financial inclusion and literacy, and especially aids them to access credit for income-generating activities. This paper is based on a field survey conducted in three districts of Karnataka, and examines how the accessibility to credit is enhanced by the programme for rural women and how it has impacted their income-generating capabilities. The paper also highlights the concerns pertaining to credit delivery that still remain to be addressed. Taking up the issue of costs of borrowing, including transaction costs, the paper shows that the transaction costs contribute only marginally to the cost of borrowing and hence argues that the programme which has many benefits, both social and economic, especially for women, should be strengthened and expanded further.

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