Self Help Group Linkage Banking

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Agricultural Credit Guarantee Scheme Fund (ACGSF)

Self Help Group Linkage Banking

Development Financing | Activities | Agric Credit | Commodity Surveillance | Microfinance | SMEEIS | Refinancing & Rediscounting Scheme | Infrastructure Finance | Newsletter | Microfinance Advisory Board | Financial Inclusion | Financial Literacy | Youth Entrepreneurship Development Programme

The Self-Help Group Linkage programme was launched under the Agricultural Credit Guarantee Scheme (ACGS) in 1991 and became operational in 1992. Under the programme, farmers are encouraged to form themselves into groups of between 5 and 15 on the basis of common purpose (informal and informal). The groups are encouraged to undertake regular savings with a partner bank of their choice. After operating such savings for six months, they could then apply to the partner bank for loan. The amount saved provides part cash security for loans to saving groups.

Bank loans to the groups are normally in multiples of the balance in their savings account at the time of the application for the loan. The group savings security would not be drawn on until the loans are fully repaid. The aim of the Self-Help Group Linkage Banking is to inculcate the culture of savings and banking habit in group members as well enable them to build up resources for financing their farm projects without recourse to bank borrowing on the long run.

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