Financial inclusion

FINANCIALINCLUSION-
byNitinHarchekar
06-12-2020 nitinvh2@gmail.com 1

Making poor preferred clients of financial
institution
MSRLM facilitates universal access to the affordable
cost-effective reliable financial services to the poor.
These include financial literacy, bank account,
savings, credit, insurance, remittance, pension and
counselling on financial services. The core of the
MSRLM financial inclusion and investment strategy
is “making poor the preferred clients of the banking
system and mobilizing bank credit”.

SHG lifecycle Financial Inclusion…
•Formation of SHGDay 0
•Basic SHG training
•Basic Book Keeper training
Day 15
•Opening of Bank Account
•Gradation for RFDay 60
•Disbursement of Revolving Fund.
Day 90
•Micro Credit Plan (MCP)
Day 150
•Disbursement of Community Investment
Funds (CIFDay 180
•First Bank LinkageDay 180-210

Financial Assistance to Rural Poor Families.
• Community Funds:
• Revolving fund (RF) Rs 10000/- to 15,000/- depending upon their Grading
(A=15000,B=12000,C=10,000)
Community Investment Fund (CIF) Rs 60,000/-
ii. Bank Linkage : RBI Guidline:-
• First Dose: 6 times of the existing corpus or minimum of Rs 1
lakh whichever is higher.
• Second Dose: 8 times of the existing corpus or minimum of Rs
2 lakh, whichever is higher
• Third Dose: Minimum of Rs 3 lakhs based on MCP
• Fourth Dose: Minimum of Rs 5 lakhs based on MCP

Capitalizing Institutions of the Poor
• MSRLM provides Revolving Fund and Community Investment Fund (CIF)
as Resources in Perpetuity to the institutions of the poor, to strengthen
their institutional and financial management capacity and build their
track record to attract mainstream bank finance.
• MSRLM provides Revolving Fund (RF) to SHGs of Rs.10,000-15,000 as
corpus to meet the members’ credit needs directly and as catalytic
capital for leveraging repeat bank finance. RF is given to SHGs that have
been practicing ‘Dashasutra’ (Regular meetings; Regular savings; regular
inter-loaning; Timely repayment; and Up-to-date books of accounts).
• MSRLM provides Community Investment Fund as Seed Capital to SHG
Federations at Cluster level to meet the credit needs of the members
through the SHGs/Village Organizations and to meet the working capital
needs of the collective activities at various levels.
• MSRLM provides Vulnerability Reduction Fund (VRF) to SHG
Federations at Village level to address vulnerabilities like food security,
health security etc., and to meet the needs of the vulnerable persons in
the village.

Access to Credit
MSRLM expects that the investment in the institutions of
the poor would leverage the bank credit of at least
Rs.1,00,000 /- accessible to every household in repeat doses
over the next five years.For this, SHGs go through Micro-
investment Plan (MIP) process periodically. MIP is a
participatory process of planning and appraisal at
household and SHG levels. The flow of the funds to
members/SHGs is against the MIPs. NRLM has
provided interest subvention for all eligible SHGs to get
loans at 7% per annum from mainstream financial
institutions. Further, additional 3% interest subvention is
available only on prompt repayment by SHGs in most
backward districts.

SHG Credit Linkage
• While the Mission provides only catalytic capital support to the community
institutions, it is expected that the banks provide the major chunk of funds required
for meeting the entire gamut of credit needs for the rural poor households. The
Mission therefore expects that the SHGs leverage significant amount of bank credit.
• The Mission assumes that over a period five years, each SHG would be able to
leverage cumulative bank credit of Rs. 10,00,000/- in repeat doses, such that on the
average each member household accesses a cumulative amount of Rs. 100000/-.
• In order to facilitate bank linkages, State Level Bankers’ Committees (SLBC) would
constitute exclusive sub-committees for SHG bank linkages and financial inclusion in
NRLM activities. Similarly, District Level Coordination Committees and Block Level
Coordination Committees would review SHG-Bank linkages and NRLM.
• The Mission units are also expected to use the services of the field level customer
relationship managers such as,Bank Mitra/Sakhi.
• Further, institutions of the poor are expected will be guided to constituting
community-based recovery mechanisms (sub-committees on bank linkage and
recovery of loans).
• NRLM works towards increasing the portfolio of products of savings, credit, insurance
(life, health and assets) and remittance through the institutions of the poor directly or
in partnership with mainstream financial institutions using various institutional
mechanisms and technologies.

KEY FOCUS AREAS
SHG Bank
Linkage
Financial
Literacy
Digital
Finance
Insurance &
Pension
(Social
Security)
Community
Funds
Enterprise
Finance
Financial
Inclusion
906-12-2020 nitinvh2@gmail.com

FINANCIAL INCLUSION
E n s u r i n g a c c e s s t o A p p r o p r i a t e , R e l i a b l e , A f f o r d a b l e & C o n v e n i e n t
f i n a n c i a l s e r v i c e s t o a l l p o o r H o u s e h o l d s .
 CONVENIENT
SERVICES AT THEIR DOORSTEPS ( WITHIN 5 KM)
 APPROPRIATE
1. AC OPENING, 2.SAVING, 3. CREDIT, 4. INSURANCE, 5.
REMITTANCES, 6. EQUITY, 7. PENSIONS, 8.
ENTITLEMENTS/PAYMENTS.
 RELIABLE
ACCESSIBLE ON A SUSTAINABLE BASIS WITH DIGNITY.
 AFFORDEBLE
AT FAIR COST
APPROPRIATE
RELIABLE
AFFORDEBLE
CONVENIENT

LIFECYCLE OF SHG
8
7
6
5 4
3
2
1 • Contributed by all members
• Voluntarily decided
• Weekly
1. SAVING (First
Meeting)
• Recording of financial
transactions
2. BOOK KEEPING
• Within 3 months of Group
formation
3. SB ACCOUNT OPENING
SHG & INDIVIDUAL MEMBER
• For Judging Readiness
• To receive RF/CIF
• 3-4 Months or on submission
of MIP
4. 1ST GRADING OF SHG
• 2nd LEVEL GREDATION BY BANK
• 3rd Level GREDATION BY VO
• INSURANCE
• CIF
• BANK LINKAGE
7. MICRO INVESTMENT PLAN
CONSOLIDATION @ VO LEVEL
Rs.10,000 to Rs. 15,000
6.RF DISBURSEMENT
• Members are encouraged to Recognize,
Understand and Evaluate their
Resources , analyze challenges , Identify
needs and make future plans
5. MICRO INVESTMENT PLAN
Individual SHG Level
SHG
FORMATION

TYPES
SUSANFLOWERS
ManagerCOMPULSORY VOLUNTARY
• Collected from members @
Regular intervals.
• Rate of Interest is fixed by
SHG.
• Reviewed annually.
• Can be fixed some higher limit
when SHG members get
Higher income.
• Members may bring their voluntary
saving in addition to their compulsory
saving.
• Purpose could be Festival , Agriculture
, Education etc.
• No limit.
• Can be taken back whenever need
emerge.
SAVINGS OF SHG

BOOK KEEPING OF SHGs & THEIR FEDERATIONS(1/3)
Recording of financial transactions of SHG is called as Accounting.
NEED
• For creating belief among SHG Members
• To maintain transparency
• Legal Compulsion in the context of CBO –Bank Linkage.
• To facilitate good governance.
• Help to take decision to strengthen the financial health.
FILES AND DOCUMENTS
• SHG - UC , Loan application form
• VO/CLF- Payment Voucher File , MoU File ,MIP File , Report File, Correspondence File etc.

REPORTS FROM SHG TO VO (Monthly)
a. No of meetings held
b. Member attendance
c. Member saving
d. Member wise repayment
e. Member wise loan outstanding
f. RF/CIF received
g. Bank loan received
h. Repayment to bank (if loan outstanding)
i. Member wise new loan issued
j. Total income –Expenditure

WHEN TO BE WRITTEN ( BOOKS OF ACCOUNTS)
a. SHG – Formal books of accounts handed over to SHG after 3 months of its formation.
By Member or Book Keeper supported by staff for initial 3 months.
b. VOs – Will be written in the books of accounts from the very 1st day of transaction of
the VO after its formation
By the book keeper.

TRANSACTION FLOW AND DOCUMENTS
SUPPORTED BY EVIDENTIAL DOCUMENTS
TRANSACTION
SUMMARIZATION OF TRANSACTION
BY SHG VO CLF
BOOKS OF ACCOUNTS
VO/CLF-Trail balance
A. SHGs-(After 1 year
except Rec & payment)
B. From the beginning of
the year.
VO/CLF MINUTES BOOKS,
RECEIPT VOUCHER,C
ONTRA VOUCHER
JULIAN GLOVER
PAMELA HOWELL
RECORDING AND CLASSIFICATION OF
TRANSACTIONS
SHG- MINUTES BOOK
PRIME
A . Cash Book
B. General Ledger
SUBSIDIARY
A . SHG- Saving & Loan
Register
B. VO/CLF-Loan ,
Membership
& Stock register
SHGs
Receipt & Payment
Account.
PREPERATION OF FINANCIAL STATEMENT
A. Receipt & Payments account
B. Trading & Profit Loss account
C. Balance Sheet

STEPS-OPENING OF SAVING BANK ACCOUNT (1/3)
SHG should open SB Account within 3 months of formation of group ( No limitation of service area)
1 2 3 4 5
By SHG to open Bank
Account @ Selected Bank.
1. RESOLUTION
• Of 3 office bearers to operate
the bank account on behalf of
all members
• Condition that the money can
be withdrawn with signature
of any 2 office bearers.
2. AUTHORIZATION
RUBBER STAMP OF SHG
• Submission of duly filled SB
account form
• Residential proof of office bearers
• Identity proof of office bearers
• Photographs of office bearers ( 2
Copies each)
4. COMPLY WITH BANK NORMS
NO FRILL ACCOUNT WITH ZERO BALANCE

STEPS-OPENING OF SAVING BANK ACCOUNT
(2/3)
• Designated signatories of the SHG SB account are required to comply with KYC Norms
1. Proof of Identity( any one of the following)
Voters Card
 Aadhar Card
MGNREGS Job card
Any card with photograph , that is issued by govt.dept
2. Proof of Address
 Voters Card
 Aadhar Card
MGNREGS Job card
Electricity Bill

STEPS-OPENING OF SAVING BANK ACCOUNT (3/3)
PRECAUTION AND TRANSPARENCY
1. One ordinary members should go with the office bearers for ensuring
transparency and development of trust.
2. Group should get the passbook updated regularly and collect it from bank within
time period.
3. Passbook and cheque book should be kept in safe custody.
FACILITATOR TIPS
1. Bank sakhi should facilitate the process
2. Bank Account opening should be done in batches ( not less than 10 SHGs on each
occasion)
3. Should be done on designated days mutually agreed by Bank Branch Manager.
4. Some transactions among SHG and bank should be encouraged after opening of
SB account.

GRADING OF SHGs
TYPE PURPOSE
INDICATIVE
TIME
REMARKS WHOES RESPONSIBILITY
1st
• For Judging
readiness
• Eligibility of
SHG to receive
RF
• 3-4 Months or
• Submission of MIP
• VO/CRP/Community Representative
with the help from MSRLM Staff.
2nd
• For Judging
readiness
• Eligibility of
SHG to receive
Bank Credit
• 6 Months or before
application of bank
linkage from the
date of the
formation of SHG
• Branch official/Authorized
representative of bank , VO
3rd
• For Judging
readiness
• Eligibility of
SHG to receive
CIF
• 9 months form the
formation of SHG
• VO/CRP/Community Representative
with the help from MSRL
• M Staff.
Grading is the exercise performed for evaluation , Assessment of other social indicators ,performance
,strength of SHGs( VO should conduct the assessment of the members of SHGs in the monthly meeting
based on the monthly reports submitted by SHGs)

FUND MANAGEMENT IN COMMUNITY INSTITUTIONS(1/3)
REVOLVING FUND ( Rs.10,000/- to Rs.15000/-)
PURPOSE- Besides meeting consumption and initial production needs, would also build
institutional capacities of SHGs in managing loans and funds.
ELIGIBILITY-
• Poorest of poor
• Active existence since last 3 months
• Member attendance not less than 90%
• Should following 10 sutra
• Repayment rate should be 95% and above
• All members have received member level training.
• Should have trained Book keeper
• Have not availed RF earlier , under SGSY
• Should have saving bank account.

COMMUNITY INVESTMENT FUND ( Rs./- to Rs.0/-) As a catalyst for improving the livelihoods and
quality of life of the poor communities. This may be supported further by leveraging finance from
commercial lending Institutions.
PURPOSE-
• To undertake the productive livelihoods enhancing activity.
• Vulnerability Reduction of the poorest( food and health security interventions)
• Improving access to social safety nets and entitlements.
• Promoting access to formal financial services for the poor.
• Providing small grants to the destitute , old and the disabled in extreme poverty to meet the
emergency needs.
ELIGIBILITY of SHG-
• SHG should be the member of VO
• Groups completed 6 months after formation
• “A” Graded SHGs
• SHGs prepared MIP
• SHGs had undergone basic training on fund management.

ELIGIBILITY of VO -
• VO must have completed 3 months.
• VO lenders must be selected & EC and subcommittees must have been constituted in
VO.
• VO should have bank account.
• VO Office bearers and EC members should have undergone basic training on VO and
Fund management.
• BK for VO have been placed and trained and VO must introduce minimum required
documents Minutes book , Cash book etc.
COMPONENTS OF CIF-
A. LIVELIHOODS FUND (90%)- Financing both far and non farm activities and service sector activities.
Can be used as working capital for small enterprises also.
B. VULNERABILITY REDUCTION FUND (10%) - Can be used for the purpose of reducing the vulnerability
and risk faced by the disabled and vulnerable in the village . The SHGs which have prepared
Vulnerability reduction Plan in MIP can avail this fund.

FLOW OF LIVELIHOODS FUNDS AMONG VARIOUS
COMMUNITY INSTITUTIONS
RF
CLF
DMMU/
BMMU
SMMU
VO
SHG
LF & VRF
LF
LF & VRF

PHASEWISE FUND INJECTION
PHASE I
REVOLVING
FUND
PHASE II
LIVELIHOOD FUND
PHASE III
VULNERABILITY
REDUCTION
FUND
AFTER 3 MONTHS OF
FORMING SHG
Average Rs.-10,000 - 15,000
PURPOSE-
• To meet emergency needs
• Consumption needs
• High interest debt swapping
• Small/Micro enterprises
AFTER 6 MONTHS OF FORMING VO
Average Rs.-30,000 - 40,000 per SHG
PURPOSE-
• To support livelihoods
• Assetization
• Working capital
• High interest debt swapping
THROUGH VO TO SHG
MAXIMUM Rs. XXXX per SHG
PURPOSE-
• To reduce the vulnerability of the SHG Members.
• Food security
• Health Risk
• Community based rehabilitation of disable SHG
members.
DIRECTLY TO SHG

SUGGESTIVEREPAYMENTAND APPLICABLEINTERESTRATEONLIVELIHOOD FUNDS
CLUSTER LEVEL FEDERATION
SELF HELP GROUP
VILLAGE ORGANIZATION
SELF HELP GROUP MEMBERS
RATE OF INTEREST
6%
12%
24%
60 INSTALLMENTS
36 INSTALMENTS
REPAYMENT TEANURE
24 INSTALLMENTS

VISION
OF
MAHARASHTRA STATE RURAL LIVELIHOODS MISSION
VISION
Every House Holds to be able
to access a credit linkage of
Rs. Lakh over a period of 10
Years.
CASH CREDIT LIMIT
/ TERMLOANS

• May be sanctioned by
Bank for the period of 3-5
years based on the
projected savings of SHG
• Draw able limits for the
SHGs are fixed annually
with aggregate ceiling of
actual saving in SHG.
CASH CREDIT LIMIT TERM LOANS
• Loan sanctioned by
bank for a specific
period of time with a
regular interval of
repayment.
TYPES OF CREDIT PRODUCTS
• PURPOSE OF BANK LOAN-
• Income generation activities.
• Social Needs-Housing, Education, Marriage
• Debt swapping

• Internal assessment on
SHG meeting eligibility
criteria for credit linkage
can be done by VO or
SHG members
themselves.
1 5
2 6
Filing of
Documents-Inter
say documents,
Loan application
form
Visit to bank
branch to
complete the
documentation
formalities
Resolution by the
SHG for taking
Bank Loan.( it
should be
mandatorily
entered in to
Minutes books)
• Grading of
SHG by Bank
manager.
1 2 3 4 5 6
• Preparation of Micro
Plan
• Review of the Micro
plan.
• Assessment for demand
of credit needs from the
Banks.
3
4
PREPARATION FOR THE CREDIT LINKAGE AT THE SHG LEVEL

PROCESS OF BANK LINKAGE
SHG FORMATION
MICRO PLAN PREPARATION
ACCOUNT OPENING
GRADING FOR BANK LINKAGE
1 MONTH
(Book keeping Introduced)
WITHIN 2-3 MONTHS
TIMELINE
6 MONTHS
CREDIT LINKAGE

• FOR REGULAR MONITORING OF
BANK LINKAGE ON MONTHLY QTRLY
BASIS.
SET UP OF SUB COMMITTEE ON
SHG BANK LINKAGE IN SLBC
SMMU WITH DIST TEAM
SHOULD ATTEND DLRC
MEETING ON ROTETIONAL
BASIS.
REGULAR
PARTICIPATION,REVIEW AND
ANALYSIS OF THS SHG BANK
LINKAGE PREFERABLY WITH
THE MISSION DIRECTOR
• ANNUAL CREDIT TARGET
PLANNING( WITH BOTTOM
UP APPAROCH)
• GETTING CREDIT TARGET
APPAROVAL@ SLBC
• Classroom Training,
• Immersion Visit trainings
COORDINATION OF THE
BANKERS SENSITIZATION
PROGREME FOR THE
CONTROLLING OFFICER OF THE
BANK
• ADVOCATE FOR UNIFORM
DOCUMENTETION FOR SHG-
BANK LINKAGE AND MIS
REPORTS WITH SLBC
• INSTITUNALIZE THE SAME
THROUGH THE
CONTROLLING OFFICES OF
VARIOUS BANKS.
REGULAR REVIEW OF THE BANK
LINKAGE STSTUD @ STATE
LEVEL
CAPACITY BUILDING OF THE
DISTRICT LEVEL PROJECT STAFF
KEY TASKS TO BE PERFORMED BY SRLM TO LEVERAGE CREDIT
FOR SHG FROM BANK
@ STATE LEVEL.
1 2 3 4
5 6 7 8

• REVIEW AND ANALYSIS OF
THE STATUS OF SHG BANK
LINKAGE IN DLRC/DLCC
MEETING REGULARLY
• A ONTHLY AND QTRLY
REPORT TO BE SUBMITTED
DISTRICT LEVEL STAFF SHOULD
ATTEND BLBC MEETINGS
REGULARLY.
REGULAR INTERACTIONS AND
MEETING WITH DDM,LDM AND
BRANCH MANAGERS IN THE
DISTRICT(MONTHLY/BI
MONTHLY)
COORDINATION THE
SENSITIZATION PROGREME FOR
BRANCH
MANAGERS(EXPOSURE VISITS)
• REVIEW OF THE BLOCK TEAM ON
SHG BANK LINKAGE.
• COLLECTING DATA FROM VO/CLF
AND BMMU AND PREPERATION OF
THE RELEVANT REPORTS FOR
SPMU/SLBC SUB COMMITTEE.
FOR SHG FROM BANK
@ DISTRICT LEVEL .
1 2 3
4 5

• ATTENDING BLBC MEETINGS
REGULARLY • VISITING BANK BRANCHES
WITHIN THE BLOCK
REGULARLY FOR
IDENTIFYING BRANCH
SPECIFIC ISSUES FOR BANK
LINKAGE
• SAVING LINKAGE AND CREDIT LINKAGE
PLANNING WITH THE BRANCH
MANAGER.
• MEETING WITH THE OFFICE
BEARERS OF FEDERATIONS/SHGs
AND COMMUNITY RPs TO IDENTIFY
ISSUES RELATED TO BANK LINKAGE.
FOR SHG FROM BANK
@ BLOCK LEVEL .
1 2
3 4

• Identification of Bank branches @ Block and Cluster Level.
• Meeting with Branch Managers along with district/Block managers.
• SHG bank account opening as per the branch level linkage plan.
• Internal assessment on SHG meeting eligibility criteria for credit linkage( Can be done by VO or SHG
members themselves.)
• Preparation of the micro plan, Review of the micro plan.
• Assessment for demand and credit needs from the banks.
• Resolution by the SHG for taking loan(Resolution to be mandatorily entered in the minutes register)
• Filing of the documents-inter-say agreement, loan application form.
• Invite bank manager for the grading of the SHGs.
• Visit to bank branches for completion of the documentation formalities( Only selected representatives
should vsit the bank branch)
• Credit linkage of SHGs as per the linkage plan.
• Monthly Monitoring of repayment of bank through VO.
FOR SHG FROM BANK
@ CLUSTER LEVEL.
YR
1
• Promoting CRP on FI ( BOOK KEEPIN TRAINERS/COMMUNITY AUDITORS/BANK MITRA)
• Assessing the eligible SHGs through VO for repeat credit linkage.
YR
2

TRAINING STRATEGY FOR FINANCIAL INCLUSION
STATE LEVEL
POOL OF THE TRAINERS @
STATE LEVEL
SENSITIZATION OF THE
BANKERS-CONTROLLING
OFFICER OF THE BANK
SENSITIZATION OF THE
BANKERS-LDM, DMMs,
BRANCH MANAGERS
MoU WITH RESOURSE ORG.
EXPOSURE VISITS OF BANKERS
ACCOMPAINED BY THE STAFF
TRAINING OF THE DISTRICT
LEVEL STAFF/ToTs.
TRAINING OF THE BLOCKLEVEL
STAFF
TRAINING OF THE
COMMUNITY COORDINATORS
TRAINING OF THE
COMMUNITY / COMMUNITY
INSTITUTIONS.
DISTRICT LEVEL
BLOCK LEVEL

DURATION (IN DAYS) OF THE VARIOUS TRAINING PROGRAMMES AT
DIFFERENT LEVEL
TOPIC STATE DISTRICT BLOCK CC BK VO BK SHG SHG
FI IN MSRLM 2 2 1 NA NA NA NA
BK 1 2 5 5 5 5 5 NA
SHG GRADING 1 1 1 1 NA
FUND MGMT 1 1 2 2
MICRO
PLANNING
1 3 3 3 3
SHG BANK
LINKAGE
1 1 1 2 2 2 2
AUDITING
SYSTEM
1 2 3 3 3 3 1
FL & CREDIT
COUNCELLING
1 2 2 2 2 2 2

SCHEDULE OF THE VARIOUS TRAINING PROGRAMMES AT DIFFERENT LEVEL
TOPIC STATE DISTRICT BLOCK CC BK VO BK SHG SHG
FI IN MSRLM ORIENTATION ORIENTATION ORIENTATION
BK 1
AFTER
EMERSION (1-2
MTS)
AFTER
EMERSION (1-2
MTS)
AFTER EMERSION
(1-2 MTS)
JOINING JOINING JOINING
SHG GRADING
AFTER
EMERSION (1-2
MTS)
AFTER
EMERSION (1-2
MTS)
AFTER EMERSION
(1-2 MTS)
JOINING JOINING JOINING
FUND MGMT
AFTER
EMERSION (1-2
MTS)
AFTER
EMERSION (1-2
MTS)
AFTER EMERSION
(1-2 MTS)
MICRO
PLANNING
AFTER
EMERSION (1-2
MTS)
AFTER
EMERSION (1-2
MTS)
AFTER EMERSION
(1-2 MTS)
WITHIN 2-3
MONTHS
WITHIN 2-3
MONTHS
SHG BANK
LINKAGE
ORIENTATION ORIENTATION ORIENTATION JOINING JOINING JOINING
AUDITING
SYSTEM
AFTER ONE YEAR OF PROGRAM INITIATION
FL & CREDIT
COUNCELLING
ORIENTATION ORIENTATION
AFTER EMERSION
(1-2 MTS)
WITHIN 7-8
MONTHS
WITHIN 7-8
MONTHS
WITHIN 7-8
MONTHS
WITHIN 7-8
MONTHS

MICRO PLAN
Definition-
Micro planning is a process where members are encouraged to
• Recognize
• understand
• Evaluate their resources
• Analyze challenges they face
• Identify needs and make future plans
to overcome vulnerabilities by making optimum utilization of
resources and fostering convergences.

MICRO PLAN
Objective-
• To instill a sense of confidence among SHG Members about their own capacity to improve
their quality of life
• To facilitate SHG Members recognize and understand their resources (individual and common)
• To facilitate SHG Members identify the challenges they face and analyze their causes
• To enable SHG Members systematically prepare short-term and long term goals and also
develop a sense of ownership on the goals set
• SHG Members list needs/ support required (financial; technical and convergence) for achieving
the goals set and also identify sources of support
• To enable SHG members linkages with Government sponsored welfare and development
programmes
• To motivate members to progress on the way towards economic and social empowerment

FLOW CHART FOR MIP
C
3.Discussion on each member profile in group – identify current challenges/ hurdles faced
2.Discussion on individual Members’ Household profile (Family members, education, health status,
Physical status, Occupation, Resources, Assets, Liabilities, access to entitlements, outstanding debts,
food security issues, special category)
1.Discussion on objective of MP with SHG by Facilitator (Ensure Participation of all members)
4.Sharing/ Discussion on the future plan by each members to overcome hurdles
5.Ask members to prepare/confirm their plans with their family members (immediate & long-term
plan)
1STMEETING
1stMEETING
(SHGLEVEL)

FLOW CHART FOR MIP
8. Assessment of needs for execution of individual Members’ plan
(Financial needs; technical support needs; convergence support needs)
7.Prioritization of on individual Members’ plan
6.Discussion on individual Members’ & Household future plan in group
9.Prioritization of needs of individual Members’ at group level
10.Discussion on sources of needs (Financial; technical; convergence)
1STMEETING2ndMEETING
(SHGLEVEL)
11.Filling of micro plan in MP format
12.Grading of group by facilitator

FLOW CHART FOR MIP
1.Appraisal of MP submitted of each Group by loan committee of VO/ BMMU
14.Receipt of fund by SHG from VO; Disbursement of fund to members as per MP
13. Application to BMMU/VO for appraisal & sanction
2.Consolidation of needs of individual Members’ plan in diff groups at VO – sector wise
(Financial needs; technical support needs; convergence support needs)
3.Application by VO to BMMU for release of funds
2ndMEETING
(SHGLEVEL)
4. Release of fund to SHG
5. Utilization check of fund by loan committee
(VOLEVEL)
SUBMISSION OF UC BY SHG TO BMMU/VO WITHIN ONE MONTH OF RECEIPT OF FUND
WITHIN15DAYS
OFAPPLICATION

INITIALLY BY
TRAINED PROJECT
STAFF
• DISTRICT
• BLOCK
• CLUSTER LEVEL
EVENTUALLY BY
• TRAINED CRPS
• COMMUNITY
MOBILIZERS
OR
• TRAINED
MEMBERS OF THE
VO
WHO WILL FFACILITATE MP

WHEN? ? ? ? ? ?
06
04
05
01
02
03
2. Minimum 2 month old SHG
(Process should be initiated
after at least 8 meetings by
SHG)
1.To be done primarily in the
resource and intensive blocks
3.Micro-plan to be reviewed annually or at any time before
infusion of external funds in SHG (micro plan for HH in first
phase. Micro Plan member specific in subsequent phases?)
6.Saving Bank A/C of SHG opened
4.Eligibility for Micro – Plan
preparation (Triggers)
SHG following Pancha Sutra (Regular
Meeting; Regular Attendance; Regular
Savings; Inter-loaning; Regular
Updation of books of record)
5.SHG received the basic
training (Orientation;
Leadership Development)

HOW ? ? ? ? ? ?
SHG Level Process
• SHGs fulfilling the eligibility criteria for Micro-Plan for training cum meeting on micro-plan
preparation should ensure participation of all members in the meeting.
• The household profile of SHG members should include member wise details on - Family members
(earning/ dependents), education qualification, Occupation, Resources (private and access to
common resources) , Assets, Liabilities, access to entitlements, outstanding debts, food security
issues, special category( physically/ mentally challenged, vulnerable group )
• Members should identify the challenges they face in life. Special attention should be taken to
facilitate members differentiate between symptoms and challenges/ problems.
• The members should be encouraged to share their plan (short-term & long-term) to overcome the
challenges. The fundamental principle is ‘poor have innate abilities to overcome the challenges’ and
have plans for the same.

HOW ? ? ? ? ? ?
1) Member should discuss proposed plans at family level and finalize accordingly.
2) The second meeting of the SHG for micro plan preparation should be done within 7 days of the first
meeting.
3) Each Member may share multiple plans. Prioritization of the individual plans should be done for
systematic implementation
4) After prioritization of individual level plans, members should be encouraged to share the needs/ support
requirement for execution of plan. At this stage no commitment for any support from the project
should be shared. For financial support requirement, facilitation is required to separate own
contribution and credit requirement. Members seeking credit should be facilitated to analyze
outstanding credit and their repayment ability.
5) Prioritization of the needs among members in the group should be done. Careful facilitation is required
at this stage. The principle for prioritization will be ‘Poorest First’. In the first round, for requirement of
3-5 members’ Equal distribution of any financial assistance or credit support should be discouraged.
Members on subsequent priority should have an idea on when (may be in months) they would get the
support.

HOW ? ? ? ? ? ?
6. Discussion on the sources of support may be taken up. At this stage the facilitator should explain the
support that the SHG may receive from the project level support.
7. Filling of the micro-plan in MP format (In duplicate). (MP Format developed by BRLPS annexed).
8. Grading (Refer Grading Format – 1) of the SHG submitting the MP by facilitator and application to VO. In
case VO is absent the application may be sent to BMMU.
9. After receipt of funds from VO/ DMMU the SHG should disburse the funds among members as per the
micro plan prepared and submitted. In case deviations are done, this should be noted in the minutes book
of the SHG.
10.Within one month of receipt of fund from VO/DMMU, the SHG should submit Utilization Certificate for
funds to VO or to BMMU

HOW ? ? ? ? ? ?
VO Level Process
1. Appraisal of the MP should be done by the Loan Committee at VO. In case VO is absent appraisal of
the MP should be done by the loan committee at BMMU level. It should be taken care that during
the appraisal process, the community representative should be involved.
2. Sector wise consolidation of individual members’ needs should be done at the VO/ BMMU level for
initiating related intervention.
3. VO should make application to CLF for release of funds. In case VO & CLF is absent, application will
be sent by BMMU to DMMU.
4. The release of fund to SHGs should be done within 15 days of submission of MP to VO/BMMU
5. Utilization check of the funds given to the SHG should be done by the Loan committee at the VO. In
case VO is absent, BMMU should conduct this process. Utilization check of the funds given to the
SHG should be done by the Loan committee at the VO. In case VO is absent, BMMU should conduct
this process.06-12-2020 nitinvh2@gmail.com 48

Role of Facilitator: Do’s & Don’ts in MP Preparation
Do’s
1. During the meeting for MP preparation with SHG, facilitator should make efforts to create an
environment where members can open up and have uninterrupted discussion.
2. Facilitator should ensure active participation of all members during MP preparation.
3. Facilitator should ensure that the facts shared by members are correct and should be vetted by
other members in the group
4. Facilitator should ensure that during MP preparation along with discussions on financial aspects,
discussions on social issues and convergence requirements be taken up
5. The facilitator should ensure that interest of the poorest members in the group is not undermined
6. MP preparation should be completed within stipulated time. However care should be taken not to
fast pace the process
7. Facilitator should ensure that all discussion and decision taken during the process is documented and
incorporated.
8. The final version of the micro plan should be read out to the group and changes if any should be
incorporated.

Role of Facilitator: Do’s & Don’ts in MP Preparation
Don’ts
1. Facilitators should not impose her/his ideas or decisions on the group during preparation of the
micro-plan
2. The facilitator should not conduct MP preparation without clearly explaining to the group about the
objective of MP preparation.
3. MP preparation should not be completed without finalization of repayment plan of each member
4.

Check list for ideal loan Proposal
• (1) Covering letter
• (2) Loan Application form by SHG (Annex.3)
• (3) SHG’s member wise information
• (4) Second Gradation Form
• (5) Photocopy of following 2 registers of SHG
(A) Last meeting minutes from Register no.1
(B) last meetings Balance sheet from Register No. 4A
& B
• (6) MCP in case of third dose and onward loan doses
• (7) Loan Appraisal & sanction form

Micro Credit Plan
• From third dose onward MCP is required to be submitted along with
loan proposal.
• It is not necessary to submit detail project report for each activity
• There may not be common income generating activity for all members.
It is “Demand Base” process and individual activity may be different for
every member
• Third dose may be of Rs 2 to 5 lakhs and individual loan demand may be
say Rs.20000/- to Rs50000/- for different income generating activity.
• MCP forms giving details of all members is required to be fill up and
submit.

Loan documents
• Loan application
• Receipt
• Demand & promissory note with revenue stamp signed by authorized members.
• Inter say Agreement to be executed by members of group
• Articles 0f Term loan Agreement or CC limit Agreement
• In case of third dose onward where assets are formed, Hypothecation of assets as primary
security.
• No stamp duty for agreements.( In view of Govt. Of Maharashtra, Forest & Revenue
Department order no. Y/A2003/OEL,CA 494/Y-1/Dated 17-11-2003 granting exemption of
payment of stamp duty. No stamp duty is payable to Women SHGs
• No collateral security up to loan of Rs.10 lakhs.

SHG Loan Product Codes
• BoM-101
• Union Bank- SR108
• Bank of India- 65
• Canara Bank-737
• Indian Bank- 590321 to 590326
• IDBI- 901
• HDFC- 1373
• SBI- 021705
• Maharashtra Gramin Bank-CC-6150 5601
• Term-6250 5601
• Vidarbh Kokan Gramin Bank-SHGWO/NRLWO/MSRLML/MSRLMC

SHG loan Product/Activity codes
• Vijaya Bank-Category I-Term loan- SL 930
• Category II-SL 931
• Allahabad Bank-Category I-Term loan- 6033/3282 Category
II-6033/3278
• PNB-016/007 free code-7
• SBH-621208301to 62512701
• Syndicate -137 to 139
• UCO-LA 894 to 895
• ING vaisya- 4218 &4219
• Indian Bank-5901
• Punjab & Sindh-61

Portal
• Detail study of portal for identifying potential SHGs, performance, recovery of
loans, bank wise, block wise monitoring
• Reasons for non availability of interest subvention
• (A)Banks Head office level--- 1) Master Data 2) Data sharing 3) Transaction
data.4) Loan account closed 5)Transaction error.6) Wrong formats (Digits)
7)Wrong account no.8) Wrong IFSC code
•
• (B)Branch level---- 1) Incorrect loan product code 2) SMS Alert
• © MSRLM/DRDA level---- 1) Mapping exercise 2) Compliant-Yes/No 3) SHG
Inventory
• (D)Community level---1) Payment of Installment and interest within 30 days as
per repayment schedule 2) Keeping advance amount of due installment in S/B
account with Standing Instruction
• Reconsilation of cases that has been rejected.

FI issues
1) Need to conduct campaign on submission on bank loan
Proposals at bank
2) Effective follow up for pending cases at banks
3) Effective use of DLCC / BLCC platform for bank linkage.
4) Each district should conduct special campaign for SHGs
product code in respective banks
5) Conducting remaining districts wise Bankers workshop.
6) SHGs Mapping exercise.
7) All districts needs to send bank loan proposals data
every month to SMMU
8) Effective use of MSRLM Bank Linkage portal.
9) Each districts needs to have proper data of SHGs who is
eligible for 2nd & 3rd bank loan dose.

FI issues
10) Each districts needs to track bank loan repayment status.
11) Special efforts should be taken by all the district to clear existing
NPA
12) Each district should utilize services of Divisional financial
consultant.
13) Block Mapping Pending - Satare, Sangli, Raigad, Pune, Nagpur,
Nashik, Nagar, Buldhana, Kolhapur

FI issues
14) Effective bank melava
15) Branch visits to hard core branches
16) Effective use of 11 and 26 dates of every month.
17) Money lender free block
18) ‘0’ NPA level block
19) Convergence
20) SAGY SHG credit linkage
21) DCC issues
22) MOU

Common Operational Issues
1) Pendency of Loan Applications of SHGs at Bank Branches
2) Interest Subvention Scheme for SHGs- Lending to SHGs upfront at 7%.
3) KYC requirement for the SHGs
4) Stamp Duty on Loan documents executed by Self Help Groups
5) Common Bank Loan Application form
6) Data sharing by Banks for facilitate transfer of Interest Subvention
7) SHG Code issue
8) Loan repayment Alert SMS in vernacular language

Reasons of NPA related to SGSY-SHGs.
1. Under finance/In adequate finance
2. Non capacity building of SHGs
3. SHGs only for getting subsidy benefits
4. Formation, normation problems
5. To fast steps in SHG cycle
6. Target based Quantity lending
7. Some misleading concept
8. Partial finance
9. Delay in finance.
10. Insufficient internal lending to meet consumption needs.
11. No consideration for backward forward linkages, marketing, intreprenual competences.
12. No consideration for demand based activity

WHAT WE INTEND TO DO UNDER FI ?
62
Step-up Credit Linkage Digital channels for financial inclusion among SHG
members
Smoothen fund management
in Federation of SHGs:
• Mission has place total 2834
Bank Sakhi & 2270 FLCRP
during the year against set
target of 3609 BSs & 2670
FLCRPs.
• Motivate SHGs for higher
loan
• 3rd Dose will ensure increase
in amount.
• During the current FY BC at Wardha, Solapur, Nanded,
Beed & Thane Districts have implemented. Total 327 BC
is trained and Certified. Against set target of 560
BCSakhi at present 278 BC sakhi & 195 DIGIPay Sakhi
(Total 473) are working .
• Will be extended to other district of Maharashtra.
• PM DISHA training through CSC to encourage the Digital
transaction by SHGs.
• SHG women will be trained at RSETI with support for
IIBF certification to be eligible for Business
Correspondent (BC Sakhi ) as per MoRD & NAR MOU
under Mission “One GP one BC”
• Qualified Manager &
Account person will
ensure maximum
utilization of all the funds
of Federation.
• Credit products will be
developed i.e. Loan to VO;
Loan to FPO etc.
Extending social security protection to SHG members:
 At present around 11 lakh women are covered under the Insurance schemes and 35728 are covered under APY.
Financing enterprises: MUDRA, MSME loan to SHG and SHG members

Interest Subvention scheme – Credit limit upto Rs 3 lakhs
Parameter Category-I districts Category-II districts
1 Coverage Limited to selected 250 districts Remaining districts
2 Eligibility All women SHGS under NRLM are eligible for IS All women SHGs under NRLM are eligible for IS
3
Benefit & eligibility
Condition
 SHGs will be eligible for loans from banks at upfront 7% per
annum;
 prompt repaying SHG get additional 3% IS through Bank
 IS available on prompt repayment only.
 IS will be equivalent to the difference
between lending rate of banks and 7% per
annum.
4 Release mechanism
 It is reimbursed to Bank by NRLM through Nodal bank
(Canara Bank) for PSBs & Pvt Banks
 Thus effective interest rate to SHG is 4% .
 SHGs will be subverted interest will be
calculated at NRLM on the basis of
transaction report submitted by bank @
Difference between the bank's lending rate
and 7% (subjected to a max. of 5.5%)
5 Nodal Agency  NABARD for RRBs & Cooperative Banks Respective SRLM.06-12-2020 nitinvh2@gmail.com 63

Interest Subvention by State Govt.
For effective 0% rate of interest for loans availed by
SHGs subject to regular repayment as per norms of
NRLM State Government has also introduced a IS
named as Sumatibai Sukalikar Udyogini Mahila
Sakshamikaran Yojana (SSUMSY). It is applicable to
NRLM compliant woman SHGs in Maharashtra,
supplementary to Interest subvention being given
by NRLM, Under this Scheme 4% interest subvention
will be given in Category I and 7%in category II
districts, resulting 0 % effective rate of Interest.
Under this scheme so far Mission has paid IS for 16-
17 to 13093 SHGs amounting to Rs.370.88 lakhs & for
17-18 to around 38035 SHGs amounting to Rs.1122
lakhs.06-12-2020 nitinvh2@gmail.com 64

MONITORING OF FINANCIAL INCLUSION
• Financial inclusion implementation by banks is monitored by
MSRLM at following platform
• Block Level : Block Level Bankers Committee.
• Distt.Level : District Level Bankers Committee.
• State Level: State Level Bankers Committee & Sub Committee.
• By State Government: State Level Financial Inclusion Committee
headed by Chief Secretary, Maharashtra Govt.
• Follow-up is also done through LDMs, RBI.

PRADHAN MANTRI JEEVAN JYOTHI BIMA YOJANA
1.Insurrance cover for death due to any reason.
2.Aadhar linked SB account holders with age 18 to 50 years can
participate. (One person can have only one cover even if he is having
multiple accounts).
3.Coverage period: one year from 1st June to 31st May , renewable year
after year upto the age of 55.
4.Premium payable: Rs. 330/- per annum payable by debit to designated
SB account.
5.Benefit: Rs. 2 lakhs payable to the nominee in case of death of insured
person.

PRADHAN MANTRI SURAKSHA BIMA YOJANA
1. Accidental Insurance policy with one year cover, renewable from year to year.
2. Aadhar linked SB account holders with age 18 to 70 years can participate. (One person can have only
one cover even if he is having multiple accounts).
3. Coverage period: 1st June to 31st May of next year
4. PREMIUM- Rs. 12/- per year. Auto debit to SB a/c.
5. Benefit (Sum assured): Rs. 2 lakhs for accidental death or non-coverable loss of both eyes/legs/arms
and Rs. 1 lakhs for loss of one eye/leg/arm

ATAL PENSION YOJANA
It is pension scheme designed for the benefit of people in unorganized sector(Agricultural & non
agricultural laborers, traders, self employed, agriculturists) not covered under any statutory scheme.
All bank SB account holders , age group 18-40 years
Administered by PFRDA
(Pension Fund Regulatory and
Development Authority). NSDL is
the CRA( Customer Relation
Associates)
Pension commences on attaining
60yrs of age and minimum
period of contribution is 20 yrs.
Fixed Pension of Rs. 1000/- to
5000/- for the subscriber and as
family pension to spouse after
death of subscriber and payment
of corpus to the nominee after
the death of subscriber as well as
spouse.

AYUSHYAMAN BHARAT
& TARGET GROUP-SECC DATA
About the Scheme:
For Rural World’s largest universal health
coverage scheme
Targeted to cover 10 crore poor
families
Members of the family to get cashless
hospitalisation facility
Up to Rs 5 lakhs per family per year. Treatment at any empanelled
hospital
All RSBY beneficiaries automatically
covered.
Entire premium to be borne by Government (Centre: State - 60:40)
69
Total deprived Households targeted for PMRSSM who belong to one of the six deprivation criteria amongst D1, D2, D3, D4, D5 and D7:
Only one room with kucha walls and kucha
roof (D1)
No adult member between age 16 to 59
(D2)
Female headed households with no adult
male member between age 16 to 59 (D3)
Disabled member and no able-bodied adult
member (D4)
SC/ST households (D5) Landless households deriving major part of
their income from manual casual labour
(D7)
Automatically included
Households without
shelter
Destitute/ living on alms Guidelines for Pradhan Mantri
Rashtriya Swasthya Suraksha Mission (PMRSSM)
Manual scavenger families, primitive tribal
groups, legally released bonded labour

Community based Repayment Mechanism (CBRM) & NPA Management
70
Facilitating and ensuring almost
100% recovery by the community
itself and evolving a proper system
for monitoring and recovery of
loans on an ongoing basis.
To have close interaction between
the community and Branch
Manager –both in recovery of loans
and in addressing financial needs of
the SHGs.
Facilitate linkage of SHGs every
month as per the monthly plan
evolved for each Bank branch to
ensure timely availability of credit.
Committee Formation :
1. Br. M of bank branch Chairman of the committee
2. Bank Sakhi( if placed at Branch) will be Member Secretary of committee.
3. FLCRP/BC Sakhi (if Placed) will also be member of committee.
4. Two Member of Sub Committee of VO in that branch area for Bank Linkage will be member of this committee.
MEETING: Committee to Meet every month to discuss the Bank Linkage; Bank Credit Linkage & NPA recovery and
other matters. Frequency may be less then a month as per requirement.
At present mission have around 1630 CMBR committees with contentious follow up with the districts mission
could reduced the NPA from 10.35 as on 31.3.19 to 8.36% on 31.12.2019.

Aspiration!!!

Financial inclusion

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