http://www.chaitanyaindia.

org/what-we-do/shg-and-federation-promotion 20/7/2014
SHG and Federation Promotion
Chirag is the name of our Community Based Microfinance program. Chaitanya is one of the pioneers of
community based micro-finance institutions in Maharashtra, India. It facilitated the formation of Grameen Mahila
Swayamsiddha Sangh, the first federation of self help groups (SHGs) in Maharashtra. Initially SHGs came together
to form an informal association which was later registered as a charitable society. GMSS is located in the Khed
block of Pune district.

As of January 2013, Chaitanya has facilitated the setting up of fifteen federations in seven districts of
Maharashtra; eight federations in Pune district, one federation each in Ahmednagar, Nashik, Satara, Sangali and
Nandurbar districts, and two federations in Dhule district. The federations in the Pune district are located in
Khed, Maval, Ambegaon, Junnar, Daund, Manchar, Shikrapur and Belhe blocks. In addition, it has initiated the
formation of SHG-Federation framework across nine blocks in six districts of Vidarbha (north eastern
Maharashtra) region infamous for its agrarian distress. Also capacity building as resource organization is being
provided to twenty-five CMRCs of MAVIM (Mahila Arthik Vikas Mandal).
Goal
To provide equitable and affordable financial services to women through the formation of federations in all
districts of Maharashtra
Objectives
To organize women into strong and sustainable self help groups, clusters and federations as a forum for
sharing, learning, planning and monitoring
To provide financial services such as savings, credit and insurance to the members
To promote federation linkage with institutions like the Small Industry Development Bank of India and
Friends for Women World Banking to meet the financial needs of the members
To provide technical services to the federations like audit, MIS, financial management, facilitating ratings
and linkages with banks
Major Activities
Map scope of Chirag Unit
Coordinate and plan meetings between Districts, NGOs, Blocks and Villages
Implement awareness programme
New group formation
Cluster and federation programme
Conduct exposure visits
Coordinate with the Government and link their groups with the federations
Disburse loans and collect repayments
Coordinate training programme for financial management, coordination and default management
Develop Monitoring Information System


Email: info@chaitanyaindia.org
Head Office
Moti Chowk,Rajgurunagar,
Taluka Khed, District Pune 410505,
Mahasrashtra, India.
Telephone: 0091-2135-223176
Fax: 0091-2135-226580
Livelihood

Objectives and Activities
Enhance knowledge of livelihood practices and the skills required to manage available resources. Conduct
trainings tying up with technical partners; related to:
o Vermi-compost/Biodynamic
o Organic farming
o Animal husbandry
o Financial aid for credit needs
o Raised-bed agriculture
o Kitchen garden
o Horticulture
o Fodder enrichment-Azolla
o Systematic Rice Intensification (SRI)
Promote farmer groups around specific products and services identified via value chain analysis and work
towards facilitating bigger share for them. This is achieved through both backward linkages like collective
procurement and forward market led interventions.
Create a cadre of community resource persons called Upjeevika Jankars to perform field extension services and
marketing.
Promote entrepreneurship through skill trainings like tailoring, bag making and handicraft.

http://www.mavimindia.org/display_details.php?page=contactus&id=8
Nasik nashik.mavim@gmail.com
Plot No. 21, Jairam Krushna
Sankul, Gharpure Road,
Ashok Stambh, Dist. Nasik
95253- 2580 608 2581737 2318030
NASHI
K
Kalvan GOPIKA CMRC Kalvan
Nashik STRISHAKATI CMRC Nashik.
Malegaon YASHASVI CMRC Malegao
Chandwad AHILAYDEVI CMRC Chandwad,
Niphad GAUITAMI CMRC Tal. Niphad,
Kalvan PRATIKSHA CMRC Abhona
Surgana TEJASWINI CMRC Surgana,
Profile


SHG Based Schemes -
Before \" Tejaswini Maharashtra Rural Women Empowerment Programme\".
Maharashtra Rural Credit Programme : (1994-2002)


The Maharashtra Rural Credit Programme (MRCP) is a poverty alleviation programme
supported by the International Fund for Agricultural Development. In the first phase from
1994 onwards the programme was implemented in 4 Districts of Chandrapur, Yeotmal,
Nanded and Pune. Thereafter from 1998 onwards 8 Districts namely Gadchiroli, Bhandrara,
Amravati, Dhule, Jalgaon, Thane, Beed and Nandurbar were added. In the programme
MAVIM was entrusted with the responsibility of ensuring \"Women\'s Access to Credit\" as
an important dimension. While organizing rural women into SHGs MAVIM ensured that
along with their economic development, the political and social developmental needs of the
women were also addressed and a strong sense of \'self\' was inculcated in the women.
upto March 2007 , 4516 SHGs have been formed and 64,423 w omen were organised
together under this scheme. In this project at the end of March 2007 the women had
savings of Rs.10.51 crores and Rs. 39.56 crores of internal lending. The groups had accessed
bank loans to the tune of Rs. 25.82 crores. and 36549 women started their own business.
Swarna Jayanti Gram Swarozgar Yojana (SGSY) :- (On going)





The SGSY is a Central Government Scheme implemented through the District Rural
Development Agency under the Rural Development Department with the aim of alleviating
poverty. The scheme was initiated in 1999 but MAVIM has implemented the scheme in
2001. The scheme is being implemented in 31 rural districts of Maharashtra. At the end of
March 2007, 10413 SHG groups were formed and 1,15,8284 women were organised. By the
end of March 2007 the women saved Rs.13.64 crores and generated internal lending of Rs.
35.15 crores under this project. The women also obtained Rs.35.15 crores of bank loans and
45405 women started their own business.
Swayamsiddha Programe (IWEP) : (2002-2007)



The Indira Mahila Yojana was implemented by the Central Government from 1994 and the
Mahila Samruddhi Programme was merged with it and a revised Swayamsiddha Programme
was declared for implementation for 5 years from 2001 2002 onwards. To implement the
programme MAVIM was declared as the Programme Implementation Agency (PIA) vide G.R.
No. IMY-2001/40/Ka-10 dated 3.12.2001.The Women & Child Development Department,
Mantralaya, has declared MAVIM as the Apex Body for the same. MAVIM implements the
Swayamsiddha Programme in 19 districts and 36 Blocks in Maharashtra. Out of 36 blocks, 21
blocks (old) of Indira Mahila Yojana and 15 new blocks were selected. A target of forming
3,500 self-help groups by the end of 2006 was given in 19 districts where the programme
operated. At the end of March 2007, 3943 SHG groups were formed and 50066 women
were organised. The women saved Rs. 5.70 crores and generated internal lending of Rs.
10.31 crores. They obtained bank loans of Rs. 12.65 crores. 17734 women started their own
business.
Ramai Mahila Shakshamikaran (SCP): (On going



Under the Special Component Plan, the department of Social Justice of the State
Government allotted the scheme of formation of 20,250 self-help groups of Scheduled
Castes i.e. 3,03,750 women throughout Maharashtra to cover 5920 villages within 4 years.
Through this programme, trainings were arranged on gender equality, gender sensitization,
women\'s empowerment, social awareness, functional literacy, entrepreneurship and other
related capacity-building aspects. MAVIM has been appointed as an implementing agency of
the scheme and Rs.20.25 crores was sanctioned for the project as per GR No. MAVIM
2001/4/ KA/10 WCD Dept., dated 15.2.2003. The scheme is implemented in 33 districts
directly by MAVIM Sahayogines and through NGOs appointed by MAVIM. At the end of
March 2007, 20950 SHG groups were formed and 2,53,092 women were organised. Rs.
22.10 crores were saved by the women and they generated Rs. 34.33 crores of internal
lending. They obtained bank loans of Rs. 16.89 crores. Under this project 56190 women
started their own business.
NABARD ADD-ON PROJECT:- (2003-2005)

Under this project, MAVIM was to form 1000 SHGs in 10 districts and 15,000 women were
to be organized. MAVIM was to be given a promotion grant of Rs. 1,880/- per SHG
amounting to a total of Rs.1,88,000/- by NABARD. The period of this project is of 2 years
during which it is expected that the emphasis will be primarily on establishing SHGs and
making credit available to them. As suggested by NABARD the 10 districts selected are
Parbhani, Jalna, Washim Latur, Beed, Hingoli, Nanded, Aurangabad Gondia and Kolhapur
where the scheme is implemented. At the end of March 2007, 1773 SHG groups were
formed and 21263 women were organised. Rs. 2.85 crores were saved by the SHG members
and Rs. 5.39 crores were given as internal loans to members of the group. The women
obtained loans of Rs.2.43 crores from banks. Under this project 4141 women started their
own business.
Rashtriya Sam Vikas Yojana (RSY) :- (2003-2005)




The Rashtriya Sam Vikas Yojana of the Planning Commission is to be implemented in the
districts Gadchiroli, Bhandara, Nandurbar, Gondia, Dhule and Chandrapur. MAVIM has been
entrusted the task of setting up 1000 SHGs in 3 years (2003-2005) in each district.
Components such as vocational training, revolving fund MIS have been included in this
programme. It is also proposed that \"MAVIM GHAR\" should be build from this fund. At
the end of March 2007, 2213 SHG groups were formed and 27159 women were organised in
six districts. Rs. 1.99 crores were saved by SHGs and Rs. 3.29 crores were given as internal
lending. Under this project, 6479 women started their own business.
Krushi Saptak Yojana:- (2003-2005)

The Krushi Saptak Yojana of the Agricultural Department is implemented by MAVIM in 4
districts i.e. Washim, Nanded Parbhani and Sangli. Under this project 25 SHGs are to be
formed in each district and 250 women will be organised. The training imparted is
on Agricultural skills, Animal husbandry, Dairy Development etc. The women trained in this
field are to start activities related to agriculture which will help them to earn their own
income. Qualified sahayoginis have been appointed by MAVIM in order to train the SHG
women in agriculture related self employment activities. This scheme started in the year
2004-05. At the end of March 2007, 501 SHG groups were formed & 9441 women were
organized. Rs. 49 Lacs were saved and Rs. 1.02 crores were given as internal lending and Rs.
44. Lacs bank loan obtained by women. Under this project, 2628 women started their own
business.
Tribal Development Project (TSP):- (On going)

The Tribal Department sanctioned a Project to MAVIM to develop SHGs to be implemented
in 8 districts i.e Nasik, Nandurbar, Thane, Chandrapur, Gadchiroli, Gondia, Amrawati and
Yeotmal for the empowerment of Tribal Women. In this project 4600 SHGs are to be formed
within 3 years. The village survey and selection has been started in 8 rural districts by
March 2007. 2832 SHGs were formed and 33663 women were organised. Rs. 41.58
crores were saved by women and Rs. 2.01 crores was the internal lending and Rs. 1.58
crores Bank Loan obtained by women.

Ongoing Programmes :
A. Tejaswini Maharashtra Rural Women Empowerment Programme :

The problems due to upscaling of MAVIMs programme began to surface in 2004 as a large
number of groups were promoted by MAVIM under the Special Component Plan which
envisaged the creation of 20,250 Groups of Scheduled Caste women and the Tribal Sub Plan
which had the target of setting up 4,600 SHGs of tribal women. It became difficult to retain
programme quality and manage the data pertaining to the large number of SHGs with only
four field level officers in every district. The expansion in the number of village level SHG
animators (Sahayoginis) also created the problem of ineffective supervision of these staff.
MAVIM hence requested the state government to sanction a new project for setting up
second tier peoples institutions to give more effective services to SHGs. The state
government then approached IFAD with a proposal for a programme aimed at providing
stability and sustainability to the SHG movement in the state. Thus, in 2007 the state
government sanctioned a new programme for MAVIM supported by IFAD known as the
Tejaswini Maharashtra Rural Women Empowerment Programme.
Area of operation of Tejaswini:

The Tejaswini programme will be implemented in all the 33 rural districts of the State and
over 13,000 villages where MAVIM presently operates, supporting over 65,000 SHGs.
Targeting the Poor:
The target group for Tejaswini will be poor rural women especially from the Scheduled
Castes and Scheduled Tribes, woman headed households, widows, deserted women,
divorcees, landless laborers, AIDS affected women etc.
Thrust Areas:
The Tejaswini Programme will focus on the following thrust areas:
1 : Grass Roots Institution building
2 : Micro Finance Services
3 : Livelihood & Micro Enterprise development
4: Women Empowerment
Strategy for Tejaswini :
1. Grassroots Institution Building - Building Community Managed Resource Centres :
It is observed that SHGs require two levels of support in order to emerge as sustainable
grass root institutions. The first level of support required is for the proper mobilization of
SHGs with regular and appropriate books of accounts, an efficient MIS system and
assistance to members to pursue a socio -economic development agenda. The second level
of support is in the form of apex organisations that provide services related to capacity
building training to SHG members, SHG quality checks, bank linkages and other required
services. These second tier organisations need to be owned and managed by the SHGs
themselves as primary organisations. Under the Tejaswini Programme, MAVIM has thus
adopted the strategy of building second tier peoples institutions called Community
Managed Resource Centers.
Structure of the CMRC:
The Community Managed Resource Centre (CMRC) is a federation of around 150-200 SHGs
formed in a cluster of around twenty villages, within the radius of 20 to 25 k.m. All SHGs in
the cluster, regardless of the agency that promoted them, will be eligible to become
members and avail of the services of the CMRC. All SHGs will strive by means of training,
regulation, adherence to SHG rules and implementation of entrepreneurial and socio-
economic agenda to become A Grade SHGs. The CMRC will be a registered organization
and will work on a no profit no loss basis. It will not necessarily be at block level but can be
established at any centrally situated village.
Governance in CMRCs :
The CMRC will be governed by a Board represented by one SHG representative from each
village elected by the SHG village level committee, adopting the principle of rotational
leadership. A CMRC covering twenty villages, will have a Board constituted with twenty
members. The Chairperson, Vice Chairperson, Treasurer and other office Bearers will be
appointed by the Board members by election from amongst themselves. The CMRC will
operate by means of sub committees on various issues such as Training, Audit of SHG
Accounts, Health Services, Sanitation and Water Supply, Drudgery Reduction initiatives for
women, Gender and Panchayati Raj etc It will have a strong professional managerial
support seconded by MAVIM in the shape of a CMRC Manager and an Accountant as well as
field workers (Sahayoginies). Each Sahayogini will have around five to seven villages and
provide support to around forty SHGs. The CMRC Manager will be the Member Secretary of
the institution, whereas MAVIMs District Coordinating Officer, will be an advisor to the
CMRC.



Role of CMRC :
The CMRC will function with a comprehensive and holistic agenda for area development.
The overall role of the CMRC will be to provide the basic primary services to SHGs, that is -
capacity building training to members, bank linkages, gradation, audit of SHGs. The CMRC
will also provide specialized services to SHGs such as assessing the livelihood needs of
SHGs, tapping the required resources through convergence with various government
schemes and services and enabling the SHGs to access them and take up community
development programmes.
Fees and Service charges of the CMRC :
The services of the CMRCs will be paid for by the SHGs in the shape of monthly charges.
There will be a standard list of services included in the general monthly service charge, as
well as charges for special services and rates to be charged for non members.
MAVIM will be supporting CMRCs for the first few years of the project period on a reducing
scale. Thus the SHGs will make a contribution to the running of the CMRC right from the
very beginning. CMRCs should strive to become self reliant from the fourth year of their
establishment
2. Micro Finance Services :
Expanding women\'s economic opportunities and increasing the income they control,
results in their increased status within the family, greater economy efficiency, improved
child health and nutrition, and reduced poverty. Facilitating women\'s access to credit
through micro-finance activities based on self-help groups has proven successful in
generating additional income, jobs and small enterprise.
The programme will improve the access of need-based financial services to poor women by
creating more choices, building the credibility of the poor women and creating history for
them through self help groups and by sensitising the formal financial institutions to the
needs of the poor.
3. Women Empowerment and Social Equity :

The Tejaswini Rural Women\'s Empowerment Programmes has emphasized on poor/ultra
poor women\'s social, political and economic empowerment. And similarly concentration is
given on women\'s individual and collective progress through SHGs. As this project has
adopted holistic approach, it facilitates women empowerment through changing her views
about herself as well as transforming attitudes of other social institutions that have shown
their opposition and created barriers for women development. It is important to develop
the inner strength, control over resources and participation in decision making of
women. However, the focus of this programme is not only on women but it also includes
men, social institutions and other stakeholders to creat an enabling environment for the
process of women\'s empowerment.
The programme aims to change the attitude and perception of the men which shall increase
their responsibilities towards the domestic work, child caring, farming and business
activities.


Women Empowerment and Social Equity component has been divided 3 sections
1. Gender Integration
2. Creating Enabling Environments
3. Enhancing women\'s capacity
4. Livelihood And Micro Enterprise Development :
Tejaswini project places a greater emphasis on the development of livelihoods with a
belief that , improved livelihoods are needed if poor are really to get out of poverty. The
project therefore has a strong livelihood support componant that aims to support the
establishment of new enterprises and expension of existing enterprises. These will include
individual household enterprises as well as group and cluster businesses.
Agriculture is now the major source of livelihood. Livelihood support therefore
emphasizes more on agricultural activities (Crops, horticulture, livestock,fish etc.) but
nonfarm enterprises are also to be coverd according to the potential of the area and
demand of group members. The programme also supports the development of market
linkages and marketing through the BDS sub component. The project has settingup 6 BDS
Centers in different regions, initially as outsourced entities to be there for strengthening
livelihood component by inword flow of market information and business development
support. 6 BDS centers at regional level have been setup at Bhandara, Washim,
Pune,Latur, Ratnagiri and Nashik to provide business development services to SHGs.
MAVIM has appointed required staff like BDS managers, Business promoters, BDS
Assistants and peons.

B. ACC Ltd. assisted Women Empowerment Programme\" :
ACC limited is a renowned company in the cement manufacturing business. As a part of its
Corporate Social Responsibility Policy, ACC is keen on undertaking various development
projects in selected villages near its Cement manufacturing units in various parts of
India. Hence ACC ltd assisted Women Empowerment Programme has been
initiated and MAVIM has made a partnership agreement with ACC Ltd. It is eight years
project and will implement in Chandrapur and Yeotmal districts. It will implement in 30
villages around ACC area. All the poor families of the villages will be cover in the
programme. The identification of the poor will be done by MAVIMs 14 point survey form.
The programme will focus on four major components i.e.
1. a : Grass root Institution Building
2. b : Women Empowerment & Social Equity
3. c : Micro Finance Services
4. d : Livelihood & Micro Enterprise Development
The programme will focus Formation of new SHGs and nurting the existing SHGs of the
villages. Major focus will be given on institution building of women by providing capacity
building of SHG members and leadership development. Also women will be addressed on
sensitive topics like gender integration & gender sensitization , drudgery reduction of
women providing trainings. Social awareness camps health camps etc. Specific activities will
be concentrated in order to give an opportunity to women to live a qualitative life. Focus on
Enterpreneurship Awareness and development to enhance & ungrade the skills & providing
marketing ties up. So that impact can be observed.
Under the Tejaswini Programme, MAVIM has thus adopted the strategy of building second
tier peoples institutions called Community Managed Resource Centers. In this programme
also Community Managed Resource Centrewill be developed at block level. The CMRC
will be a registered organization and will work on a no profit no loss basis. It will not
necessarily be at block level but can be established at any centrally situated village.
The CMRC will function with a comprehensive and holistic agenda for area development.
The overall role of the CMRC will be to provide the basic primary services to SHGs, that is -
capacity building training to members, bank linkages, gradation, audit of SHGs. The CMRC
will also provide specialized services to SHGs such as assessing the livelihood needs of
SHGs, tapping the required resources through convergence with various government
schemes and services and enabling the SHGs to access them and take up community
development programmes. So that CMRC will be self sustainable.

C . UNFPA Assisted Capacity Building For Increasing Demand For Reproductive Health
Services\" :
MAVIM is the State Womens Development Corporation of Maharashtra and is working in
across Maharashtra. MAVIM has covered 13000 villages and covering a population
of seven lakhs women of Self Help Groups. MAVIM has its offices in every district
comprising of four professional officers, support staff and Sahayoginies. Each Sahayoginies
look after 40-50 SHGs covering around 20 villages .
The Sahayogini is the backbone of the entire SHG movement in the state. MAVIM thus gives
a lot of importance to the training and capacity building of Sahayoginies on various
development issues, so that they can in addition to the economic aspect orient and build
capacities of SHG members on development issues. Hence major focus of the project will be
on
Capacity building of a group of master trainers ( Sahayogini and AMO)
1. Orientation and capacity building of Sahayoginies.
2. Capacity building of SHG members to seek quality health services.
Supported by United Nations Fund For Population Activities ( UNFPA ) , MAVIM intends to
organize training of the sahayoginis for improving their knowledge, attitudes and health
seeking behavior concerning their reproductive health so that they could help the members
of SHGs in these aspects. If these women are addressed and their knowledge ,
attitude and health seeking behavior is increased they could be educating the other women
in the community. It is three years programme and will implement in across Maharashtra.

D. Minority Women Empowerment Programme :-
Mahila Arthik Vikas Mahamandal is the State Women Development Corporation , declared
as a Nodal agency to implement women development programmes in Maharashtra. With
the successful experience of implementing IFAD assisted MRCP programme , MAVIM has
taken up various women empowerment programme through SHG building i.e. SGSY ,
Swayamsiddha , TSP , SCP NABARD ADD ON, Rashtriya Sam Vikas Yojana which are
supported by Central Government as well as State Government.
MAVIM is working in the field of women empowerment since last fifteen years. We have
succeeded in bringing about the poor women in the main stream of the society/
community. The task of developing women have been successfully implemented through
the effective strategy of forming Self Help Groups. MAVIM have catered towards the
backward class population of Schedule Caste and Schedule Tribe community. Looking at the
current strata of the Muslim community there is lack of awareness and facility in the field of
health, hygiene and education. The women from this community is much more behind the
level of empowerment . As this community is still in the era of Bhurka system. Women
dont have the right to expression. Therefore it is necessary to cater towards this
population and give them proper handholding support, organize them together, train and
motivate them to become independent and self sufficient. MAVIM had submitted a
proposal to Maharashtra State Minorities Commission, Mumbai and it is sanctioned by
them.
Thus to achieve above objective MAVIM has taken a project called Minorities Women
Empowerment Programme for the selected pockets of Mumbai and eight districts of
Maharashtra i.e. Malegaon, Karanja, Bhiwandi, Nanded , Parbhani , Aurangabad etc.
MAVIM will implement this programme through NGO. One NGO will be formed 200 SHGs
in muslim pockets and this women will be provided with basic trainings input , functional
literacy training programe, Gender sensitization awareness, Enterpreneurship awareness
programme, Enterpreneurship Development Programme, village level committee, and
CMRC concept etc. This activities lead to the empowerment of village women and they will
become self sufficient
The programme will focus on four major components i.e.
1. Grass root Institution Building
2. Women Empowerment & Social Equity
3. Micro Finance Services
4. Livelihood & Micro Enterprise Development
5.
E. 4% Low interest rate scheme :
Providing subsidized loan to women SHGs in the State:-
SHG movement has spread to a wider scale in the state of Mahrashtra from last decade.
However the linkage of SHGs with banks, amount of bank loan by banks and heavy interest
charges on SHG loan are the key challenges before the movement. Taking this into account,
Government of Maharashtra has launched a scheme of \" Providing subsidized loan to
women SHGs in the State\"( vide G.R. Number MAVIM 2008/PK 130/Desk 10
dt.8.10.08).MAVIM has been declared as a Nodal Agency to implement this scheme in the
state.
The scheme is applicable to the non subsidized women SHGs formed by MAVIM and
NABARD (under the schemes sponsored by NABRAD). The scheme is to promote the timely
repayment habits amongst the SHGs Hence it do not provide upfront subsidy to SHGs. The
SHGs once linked to bank under this scheme needs to pay the bank loan (principal +interest)
every month and the interest subsidy up to 7% is debited in the SHG accounts at the interval
of every six months. As per the design of the scheme the SHGs need to pay the interest @
minimum 4% at least. Thus the interest subsidy benefit is ultimately linked to the repayment
performance by the SHGs which is a key factor.
MAVIM has taken up steps to sensitize bankers over the issues such as increasing the loan
volume per SHG and as a result of this, State Bank Of India has increased the first dose of
SHG linkage up to Rs 50000, second up to Rs.1.00 lakhs and third up to RS.5.00 lakhs which
is a positive change at policy level. (Vide circular no RBU/MF-27/NGO MEETS/304 dt
19.03.2010)


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Page 1
National Bank for Agriculture
and Rural Development
A HANDBOOK ON FORMING SELF-
HELP GROUPS
(SHGs)

Page 2
1
This handbook is specially prepared for a
reasonably educated and helpful local
person, who can help the poor to form
Self-Help Groups (SHGs).
This book helps to understand the subject in a
simple way.
Copies of relevant instructions from the
Reserve Bank of India (RBI) and NABARD are
given in the annexure to this book.
Some simple formats of the minimum
requirement of account registers, membership
registers, minutes book, etc., which are
generally used by SHGs are given,
for guidance.
The formats of the documents to be submitted
by the SHGs, while availing loans from banks
are also given as annexure to this handbook.
ABOUT THIS
HANDBOOK

Page 3
2
Contents
Page Nos.
ABOUT THIS HANDBOOK
1
Helping to Form SHGs
3
What is Self Help?
4
How do We Start?
5
How are Groups Formed?
7
How are Group Meetings Organised?
8
How do SHGs take shape?
9
How do SHGs function?
11
Characteristics and Functions of SHGs
12
Linking of SHGs to Bank
15
Step 1 Opening of S/B Account for the SHG
16
Step 2 Conduct of internal lending by the SHG
17
Step 3 Assessment of SHGs
17
Step 4 Sanction of Credit Facility to the SHG
19
Spreading the Message of SHGs
22
ANNEXURES
23
I. Specimen pages of INTER-SE AGREEMENT TO BE EXECUTED BY THE MEMBERS OF
THE SELF-HELP GROUP
23
II. Specimen of APPLICATION TO BE SUBMITTED BY SHG TO BANK
25
III. Format of ARTICLES OF AGREEMENT FOR USE BY BANKS WHILE FINANCING SELF-HELP GROUPS
26
IV. Specimen of Saving A/c. Register maintained by SELF-HELP GROUP
28
V. Specimen of Loan A/c. Register maintained by SELF-HELP GROUP
29
VI. Specimen of CASH BOOK
30
VII. RBI Circular on OPENING OF SAVINGS BANK ACCOUNTS IN THE NAME OF SELF-HELP GROUP
31
Regional Offices of NABARD
32

Page 4
3
Helping to Form SHGs
We read and hear about Self-Help Groups (SHGs) often.
Very poor people form SHGs.
They save very small amounts of money.
They lend these small amounts to each other in the SHG.
They also try to solve many of their problems together.
Can SHGs be formed in our own village?
Can we help the poor people to form SHGs?
What do we do to help them?
This booklet tells you in simple terms how to help the poor to form Self-Help
Groups.

Page 5
4
What is Self Help?
From our childhood days, we hear sayings like
Self help is the best help
Unity is strength
United we stand, divided we fall
We have heard the story of the birds caught in a
net.
They could not escape one by one.
But when they flew together in a group, they escaped.
We know that one stick is easy to break.
But it is difficult to break a bundle (group) of sticks.
The SHGs show us how unity is strength.
They show us how self help could be the best help.
It is useful if we can encourage and help poor people to form
SHGs.

Page 6
5
How do We Start?
Even a thousand-mile journey starts with a single step forward.
The first step for forming an SHG is also simple
Visit the very poor families in your village
Talk to them
If the people do not know you, first talk to them about yourself.
It is important to be known to the people and to win
their trust.
Talk to the elders in the village, explain your plan to them and
request for their support
You will need to keep a small notebook. A list of items is given in page 7.
Please copy this list on your notebook. Use it for every family you visit.

Page 7
6
Whenever you visit a poor family,
Speak to the womenfolk
Ask what is the most important issue for the family
Write all details as per your list copied from page 7.
Every time you visit such families, please tell them
that you are not distributing or promising any
subsidy money under any scheme. This is very
important to avoid misunderstanding at later stages.
This is called Preliminary Survey. This helps you to understand the needs
of
each individual family.
You will need to visit the same families again. When you see them for
the second time, you will be able to tell each family how you have
seen and spoken to other families, who also have very similar problems
like them.
By visiting the families, you will be able to know which of those families
could
come together in Self-Help Groups. You will also understand what their
common requirements and problems are.

Page 8
7
How are Groups Formed?
When you speak to families in a locality, you will find that some kind of
mutual liking already exists between many of them. Some known reasons for
mutual affinities are:
Similar experience of poverty
Similar living conditions
Same kind of livelihood
Same community or caste
Same place of origin
It will be easy at this stage to find out which families are likely to get
together
better.
What type of families do we visit,
for forming SHGs?
Ask these questions about each family:
1. Does the family have only one earning member?
2. Does the family bring drinking water from far away place?
3. Are the women compelled to go far in the open in the absence
of latrine?
4. Are there old illiterate members in the family?
5. Are there permanently ill members in the family?
6. Are there children in the family who do not go to school?
7. Is there a drug addict or a drunkard in the family?
8. Is their house made of kuccha material?
9. Do they regularly borrow from the moneylender?
10. Do they eat less than two meals a day?
11. Do they belong to scheduled castes or scheduled tribes?
IF YES IS THE ANSWER FOR THREE OR FOUR OF THESE
YES IS THE ANSWER FOR THREE OR FOUR OF THESE
QUESTIONS
QUESTIONS, YOU CAN CONSIDER THE F
OU CAN CONSIDER THE F
OU CAN CONSIDER THE FAMILY AS POOR
Y AS POOR
Y AS POOR.

Page 9
8
How are Group Meetings Organised?
Before Self-Help Groups are formed, hold a meeting of the community
leaders and elders of the village. Explain to them your plan to form SHGs.
You will get support from them. This is very important.
This is called community participation.
This will also give acceptance to your work in the village.
This is the right time to tell everyone that the meetings are not for giving
anything, but to enable the poor families to come together and help each
other.
It will be very useful if you explain the basic principles of Self-Help Group
in
this meeting.

Page 10
9
How do SHGs take shape?
After meeting the elders and community leaders, you are now ready to call
SHG members for a meeting. You can get one member from each of the
identified families to come for a meeting on a convenient day. This can be
called a start up meeting.
During the meeting, you will get a lot of questions. Your answers will help
them slowly understand the concept further.
Please allow sufficient time for the members to understand the different
aspects of group formation.
The process of forming groups normally takes five to six months.
Once the group is formed, it takes one to one and a half years to settle
to a stable pattern.
Membership
During the initial meetings, following things may happen:
Some members leave
Some new members come in
The members slowly learn to decide subjects for meetings
They learn to conduct meetings
They understand the value of records and documents
They want to remain together and help each other
These are normal stages. This will give you the confidence that you are
moving in the right direction.

Page 11
10
Leadership
One member of the group needs to take the lead.
How is this person identified?
The best way is to ask the following questions within the group :
QUESTIONS
ANSWERS
Who should decide everything for the SHG ?
All members should decide
Who benefits from the SHG ?
All members benefit
Who should do the work ?
All should share the work
How can the work be shared?
Agree on one person to take up
the work by rotation
This way, the members will understand the reason for rotation of the
responsibilities. This will make it easy to choose a member to take initiative
for the following main activities
Book keeping
Organising meetings

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11
How do SHGs function?
Simple rules are required for SHGs to function. The following
are some important rules :
Common agreement on when to meet
Decision on time and place of meetings
Agreed penalties for non-attendance
Agreement on amount of saving
Giving small loans to each other
Taking loan from banks, repayment habits
Training of the members is an important need for proper functioning of
SHGs. These areas for training could do well to the members :
Basic mathematics
Writing of books
Scheduling of meetings
Social aspects like women empowerment
Basics of lending money, borrowing, repaying
Most effective method of training of SHG members is to take them to a good
working SHG and allowing free interaction with its members.
Let us now look at an SHG little closely, and understand its characteristics
and
functions.

Page 13
12
Characteristics and Functions of SHGs
Characteristics
The ideal size of an SHG is 10 to 20 members.
(In a bigger group, members cannot actively participate.)
The group need not be registered.
From one family, only one member.
(More families can join SHGs this way.)
The group consists of either only men or of only women.
(Mixed groups are generally not preferred.)
Womens groups are generally found to perform better.
Members have the same social and financial background.
(Members interact more freely this way.)
The group should meet regularly.
(Members understand each other better if they meet weekly.)
Compulsory attendance.
(Full attendance for larger participation.)

Page 14
13
Book keeping by the SHG :
Simple and clear books for all transactions to be maintained.
If no member is able to maintain the books, someone to be
engaged by the group for the purpose.
Animator can also help.
Minutes Book :
The proceedings of meetings, the rules of the group, names of
the members, etc. are recorded in this book.
Savings and L
Savings and Loan Register :
oan Register :
Shows the savings of members separately and of the group as a
whole.
Details of individual loans, repayments, interest collected, balance,
etc. are entered here.
Weekly Register :
eekly Register :
Summary of receipts and payments on a weekly basis.
Updated every meeting.
Members P
Members Pass books :
ass books :
Individual members passbooks encourage regular savings.

Page 15
14
Functions of SHGs :
(a) Savings and Thrift :
Savings and Thrift :
The amount may be small, but savings have to be a regular and
continuous habit with all the members.
Savings first Credit later should be the motto of every group
member.
Group members learn how to handle large amounts of cash
through savings. This is useful when they use bank loans.
(b) Internal lending :
Internal lending :
The savings to be used as loans for members.
The purpose, amount, rate of interest, etc., to be decided by the
group itself.
Proper accounts to be kept by the SHG.
(Specimen formats given as an Annexure at the end of this book)
Opening savings bank account with bank.
Enabling SHG members to obtain loans from banks, and
repaying the same.
(Details may be seen in the next chapter)
(c) Discussing problems :
Discussing problems :
Every meeting, the group will discuss and try to find solutions to
the problems faced by the members of the group.

Page 16
15
Linking of SHGs to Bank
Opening of savings bank account
Internal Lending by the SHG
Assessment of the SHG
Checklist for assessment of SHG
Repayment of loans by the SHG
epayment of loans by the SHG
Soon after an SHG is formed and one or two meetings held where the
savings are collected, a savings bank account can be opened in the name of
the SHG.
The following steps will explain to you how this can be done.

Page 17
16
Step 1 Opening of S/B Account for the SHG
Opening of S/B Account for the SHG
The Reserve Bank of India has issued instructions to all commercial banks
and regional rural banks, permitting them to open SB A/cs of registered or
unregistered SHGs.
SB A/c in the name of SHG could be opened after obtaining from the group
the following documents:
Resolution from the SHG :
esolution from the SHG :
The SHG has to pass a resolution in the group meeting, signed by all
members, indicating their decision to open SB A/c with the bank.
This resolution should be filed with the bank.
Authorisation from the SHG :
The SHG should authorise at least three members, any two of whom,
to jointly operate upon their account. The resolution along with the
filled in application form duly introduced by the promoter may be filed
with the bank branch.
Copy of the rules and regulations of the SHG :
This is not a must. If the group has not formulated any such rules or
regulations, loans can be sanctioned without them.
A savings bank account passbook
A savings bank account passbook may be issued to the SHG.
This should be in the name of the SHG and not in the name of any
individual/s.

Page 18
17
Step 2 Conduct of internal lending by the SHG
Conduct of internal lending by the SHG
After saving for a minimum period of 2 to 3 months, the common
savings fund should be used by the SHG for lending to its
own members.
The purpose, terms and conditions for lending to its members,
rate of interest etc., may be decided by the group through
discussions during its meeting. (RBI and NABARD have permitted
the members to decide on these aspects.) The interest is usually kept
as 2 or 3 rupees per hundred rupee per month. Please remember
that interest per month is better understood in villages, than annual
interest.
Simple and clear books of account of savings and lending should be kept
by the SHG.
(Specimen formats of books to be kept by the SHGs are annexed to
this book)
Through internal lendings,
the members of the SHG will
learn to properly manage,
utilise and repay their SHG loans.
This will be of help,
when they later borrow from the bank.
Step 3 Assessment of SHGs
Assessment of SHGs
We need to know whether the SHG has been functioning well.
The check list given below will help us to assess each SHG in a simple,
but effective manner.

Page 19
18
CHECK LIST T
CHECK LIST TO ASSESS THE PERFORMANCE OF AN SHG
O ASSESS THE PERFORMANCE OF AN SHG
Sr. Factors to be checked
Very good
Good
Unsatisfactory
No.
1. Group Size
15 to 20
10 to 15
less than 10
2. Type of members
Only very poor
2 or 3 not very
many not poor
members
poor members
members
3. Number of meetings
Four meetings in a
Two meetings in a
Less than two
month
month
meetings in a month
4. Timings of meetings
Night or after
Morning between
Other timings
6 p.m.
7 and 9 a.m.
5. Attendance of members More than 90%
70 to 90%
Less than 70%
6. Participation of members Very high level
Medium level of
Low level of
of participation
participation
participation
7. Savings collection within
Four times
Three times
Less than three
the group
a month
a month
times a month
8. Amount to be saved
Fixed amount
Varying amounts

9. Interest on internal loan
Depending upon
24 to 36%
More than 36%
the purpose
10. Utilisation of Savings
Fully used for
Partly used for
Poor utilisation
amount by SHG
loaning to members
loaning
11. Loan recoveries
More than 90%
70 to 90%
Less than 70%
12. Maintenance of books
All books are
Most important
Irregular in
regularly maintained
registers (minutes, maintaining and
and updated
savings, loans, etc.) updating books
are updated
13. Accumulated savings
More than Rs. 5000/- Rs. 3000-5000/-
Less than Rs. 3000/-
14. Knowledge of the Rules
Known to all

Not known to all
of the SHG
15. Education level
More than 20 percent
Less than 20 per cent
of members can read
know to read and
and write
write
16. Knowledge of Govt.
All are aware of Govt. Most of the
No one knows
programs
programs
members know
about Govt.
programs
Important:
1. SHGs with 12 to 16 "very good factors
12 to 16 "very good factors
12 to 16 "very good factors can get loans immediately
loans immediately
loans immediately.
2. SHGs with 10 to 12 "very good factors
10 to 12 "very good factors
10 to 12 "very good factors need 3 to 6 months time
3 to 6 months time
to improve
to improve, before loan is given.
3. SHGs with rating of less than 10
less than 10
less than 10 very good factors will not be considered
very good factors will not be considered
for loan.

Page 20
19
Step 4 Sanction of Credit Facility to the SHG
Sanction of Credit Facility to the SHG
In whose name is the loan issued?
The loan is always sanctioned and issued in the name of the group.
(Not in the name of the individual members.)
What is the quantum of loan? How is the quantum decided?
The amount of loan to the SHG can be to the tune of 1 to 4 times of its
savings.
What constitutes the savings of the group?
The groups balance in the SB A/c
Amount held as cash with the authorised persons
Amount internally lent amongst the members
Amount received as interest on the loans
Any other contributions received by the group like grants,
donation, etc.
What are the purposes for which the loan can be given to the
SHG?
Loan may be granted by the SHG for various purposes to its members.
The bank does not decide the purposes for which the SHG gives
loans to its members. The purpose can be emergency needs
like illness in the family, marriage, etc. or buying of assets for income
generation acquisition of assets. The group will discuss and decide
about the purpose for which loans are to be given to its individual
members by the SHG.
Who makes the repayment?
The SHG makes the repayment to the bank. (The group is collectively
responsible for the repayment of the loan.)

Page 21
20
What is the collateral security for the bank?
RBI/NABARD rules stipulate that no collateral security should be taken
from SHGs by banks.
Collateral security is not necessary for the loans sanctioned to SHGs
because :
The members of SHGs know that the bank loan is their own money
like savings.
They are aware that they are jointly responsible for the repayment.
Therefore, they exert moral pressure on the borrowing members for
repayment.
Because of this, the bank gets a much better repayment from the
SHG.
Can the bank hold the SB A/c balance of the SHG as a
security?
No. This will prevent the SHG from lending from its internal savings.
What is the rate of interest to be charged for the loans granted
to SHG by the bank?
The Reserve Bank of India has allowed the banks freedom to decide
on the interest rates to be charged to the SHGs.
What is the rate of interest to be charged by the SHGs to its
members?
The rate of interest to be charged by the group to its members should
be left to the group. This is usually 2 or 3 rupees per hundred rupees
of loans.

Page 22
21
List of documents required by banks for lending to SHGs
(i) Inter-se Agreement to be executed by all the members of the Self
Help Group. (This is an agreement by the members with the bank,
authorising a minimum of three members to operate the groups
account with the bank.)
(ii) Application to be submitted by SHG to bank branch while applying
for loan assistance. (This includes details of the purposes for which
the SHG gives loan to its members.)
(iii) Articles of Agreement for use by the bank while financing SHGs.
(This contains the duly stamped agreement between the bank and the
SHG wherein both the parties agree to abide by the terms and condition
set thereon.)
(All the above formats are given as annexures to this book.)
The group members are collectively responsible for the repayment of loans to
the bank. Under no circumstance, the SHG should allow any of its members
to default to the bank.

Page 23
22
Spreading the Message of SHGs
How can you spread the message of SHGs?
You can involve effectively in formation, nurturing and linking the SHGs
to a local bank. Please get in touch with our regional office in your State,
who will be happy to provide you with all information and support in
this regard. The address of our Regional Offices is given in page No. 32.

Page 24
23
ANNEXURE I
[TO BE STAMPED AS A GENERAL POWER OF ATTORNEY]
INTER-SE AGREEMENT T
GREEMENT T
GREEMENT TO BE EXECUTED
O BE EXECUTED
BY THE MEMBERS OF THE SELF HELP GROUP
Y THE MEMBERS OF THE SELF HELP GROUP
THIS AGREEMENT made
this
day
of
19
.
BETWEEN
1. Shri/Smt/Kum.
Son/Wife/Daughter
of
, aged
years.
residing at
; and
2. Shri/Smt/Kum.
Son/Wife/Daughter
of
, aged
years.
residing at
; and
3. Shri/Smt/Kum.
Son/Wife/Daughter
of
, aged
years.
residing at
; and
4.
5.
.
.
20.
who are members of the
group, hereinafter referred to collectively as The Self Help
Group (SHG) Members which expression shall, unless repugnant to the context or meaning, include every
members of the said SHG and their respective legal heirs, executors and administrators.
WHEREAS all SHG members are residents of
Village in
taluka
of the
State and are known to each other.
WHEREAS the SHG members above named have joined voluntarily together and formed the SHG with intent
to
carry on savings and credit and other economic activities for mutual benefit subject to the terms and conditions
hereinafter appearing :
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT :
1. Each member of the SHG shall save a sum of Rs.
(Rupees
only) or such sum as may be decided by the Group, on weekly fortnightly/monthly basis which shall be
deposited with the authorised member of the group.
2. Each member shall strive for the success of the SHG and shall not act in any manner detrimental to the
business interests of the SHG.
3. The SHG members shall be jointly and severally liable for all the debts contracted by the SHG.
4. All assets and goods acquired by the SHG shall be in the joint ownership of all the members of the SHG
and shall ordinarily be in the constructive custody of such member as may be authorised by the Group
and shall be kept at the place of business at
which shall not be changed without
consent of the SHG members.
5. The SHG members hereby duly elect and appoint Shri/Smt/Kum.
as
,
Shri/Smt/Kum.
as
Shri/Smt/Kum.
as
[by whatever name designated] to look after and manage the day to day affairs of the SHGs activities
and also act in their name and on their behalf in all matters relating thereto. The authorised
representatives, may however, be removed at any time by majority vote of the members and new
representatives elected.

Page 25
24
6. Each of the SHG members hereby agrees to abide by and ratify all such act, deeds and things as the
authorised representatives may do in the interest of the said activities.
7. The authorised representatives shall take decisions in the day to day working of the SHG and each
representative shall actively involve herself or himself and co-operate in looking after the day-to-day
affairs of the SHG activities in particular to attend to the following activities.
Every member of the SHG hereby authorises the representatives to apply for the loan on behalf of the
SHG and execute necessary agreements/documents on behalf of the SHG for the purpose. The
authorised representative may collect loan amounts from the bank on behalf of SHG, deposit the same in
the savings account of the SHG for onlending to members in accordance with the decision of the SHG
and also deposit recovery of loan instalment from members in the loan account/s of SHG with the bank.
8. The SHG members hereby specifically authorise the representatives:-
(i) To open Savings, Fixed Deposits and other accounts in (.......................) bank approved by the SHG
and operate the same under the joint signature of any two of the following authorised
representatives.
Shri/Smt/Kum.
Shri/Smt/Kum.
Shri/Smt/Kum.
(ii) To keep or cause to be kept proper books of accounts of the savings, made by the SHG Members,
loans granted to them and the recoveries made from them and render every year the full accounts
to the SHG members for their approval and adoption;
(iii) To receive all payments due to the SHG and issue requisite receipts or acknowledgements for and
on behalf of the SHG;
(iv) To institute and defend on behalf of the SHG members any legal proceedings and safeguard the
interests of each member of the said SHG and for this purpose engage or disengage any lawyer or
advocate or agent and incur the necessary legal expenses in connection therewith.
9. In the event of death of any of the members of the SHG, his/her legal heirs shall be entitled for the
benefits and be liable for the obligations of the deceased member under this agreement.
10. It is agreed that no new person shall be inducted as a member of the SHG without consent of all the
existing members.
IN WITNESS WHEREOF the aforesaid members of the SHG have set their respective hands hereunto at the
place
and on
day of
month
year first herein appearing.
Name of member SHG
Signature/s/Thumb of the impression
(1)
(2)
(3)
(4)
.
.
(20)
WITNESSES :
(1)
(2)
(Note: The SHG shall not consist more than 20 persons).

Page 26
25
ANNEXURE II
Specimen of application to be submitted by SHG to Bank
Branch while applying for loan assistance
Name of the Self-Help Group :
Address :
Formed/Established on
Registered : Yes/No
If registered : give number and date and
furnish true copy of the Certificate of Registration.
Number of members in the Group :
Name of SHPI/NGO/VA assisting the Group : if any,
To:
Date
The Branch Manager
Bank
Branch
Dear Sir,
APPLICATION FOR L
TION FOR L
TION FOR LOAN
We the duly authorised representatives of the above SHG hereby apply for a loan aggregating
Rs.
/- (Rupees
only) for on lending to our members.
The financial particulars of the group as on
are given in the enclosed sheet.
(date)
REPAYMENT SCHEDULE
YMENT SCHEDULE
2. We agree to repay the loan amount as per the repayment schedule which may be fixed by the bank.
3. A copy of the Inter-se Agreement executed by all the members of the group authorising us interalia to
borrow on behalf of the SHG is enclosed.
4. We hereby declare that the particulars given above are true and correct to the best of our knowledge and
belief.
5. We hereby authorise the Bank to disclose all or any particulars or details or information relating to our
loan accounts with the Bank, to any other financial institution including NABARD, Government or any
agency as may be considered necessary or desirable by the Bank. It will be in order for the Bank to
disqualify the SHG from receiving any credit facilities from the Bank and or recall the entire loan amount
or any part thereof granted on this application, if any of the information pertaining to the group,
furnished herewith is found incorrect and/or containing misrepresentation of facts.
Yours faithfully,
1.
2.
[Authorised representatives]
SELF HELP GROUP
Financial Particulars as on
Sr. No. Particulars
articulars
Amount (in Rs.)
1.
Savings from Members
2.
Seed Money from SHPI [NGO/VA], if any
3.
Borrowings Outstanding :
(Please specify source)
4.
Loan outstanding against members
5.
Amount in default, if any, against members
6.
Recovery percentage
7.
Cash/bank balance

Page 27
26
ANNEXURE III
FORMAT OF ARTICLES OF A
T OF ARTICLES OF A
T OF ARTICLES OF AGREEMENT FOR USE
GREEMENT FOR USE
BY BANKS WHILE FINANCING SELF
Y BANKS WHILE FINANCING SELF
Y BANKS WHILE FINANCING SELF-HELP GROUPS
-HELP GROUPS
The Articles of Agreement made on this
day of
199-
at
By and Between M/s.
[name of SHG]
an unregistered association of persons/individuals having its office at
represented by its authorised representative Shri/Smt.
(Name)
and Shri/Smt
(Designation)
(Name)
who are fully authorised by all the members of the SHG, (a copy of such Authorisation is annexed hereto and
forms part of this agreement), hereinafter referred to as the borrower which expression shall unless repugnant
to the subject or context thereof, mean and include members of the unregistered association for the time being,
their respective successors, legal heirs, administrators and assigns of the one part and
(name of the bank) a body corporate constituted under the
Act
have
its Head Office at
and the Branches, interalia, one at
hereinafter
called the Bank which expression shall unless repugnant to the subject or context thereof mean and include its
successors and assignees of the second part.
Whereas the borrower is an unregistered association of persons who have interse agreed to help each other as
self-help group with a view to developing and ameliorating the socio-economic conditions of their members.
Whereas having formed the association as a self help group, the Borrower as per application dated
made by the said
Shri/Smt.
,
(Name)
(Designation)
and Shri/Smt.
,
(Name)
(Designation)
duly authorised to borrow in terms of its resolution dated
[copy enclosed] requested the
Bank to *grant a loan/extend credit facility of *Rs.
/- up to the limit of
Rs.
/- (Rupees
only) for onlending to its members.
And whereas the Bank has agreed to grant the *loan/extend credit facility to the borrower on certain terms and
conditions.
And whereas the Bank and the borrower are desirous of reducing the agreed terms into writing.
Now, therefore, this agreement witnesseth as follows:
1. The Bank has agreed to grant and the borrower has agreed to borrow by way of term loan/cash credit
(clean) upto the limit of Rs.
/- (Rupees
/- only) and the bank
has opened (SPECIFY THE KIND OF LOAN ACCOUNT) A/C No.
of date
/- in the name of the borrower in its book of accounts.
2. In case the facility availed is cash credit the Borrowers will operate the cash credit account satisfactorily
and within the limit and the Borrower shall repay the outstanding liability in the account inclusive of
interest and other charges debited from time to time on demand without demur.
3. In case loan availed is Demand Loan, without prejudice to the right of the Bank to recall the loan on
demand the Borrower undertakes to repay the loan with (*Delete whichever is not applicable) interest and
other within the period stipulated in terms of sanction.

Page 28
27
4. In case the credit facility availed of by the borrower is a term loan the same shall be repayable in
instalments in the manner specified herebelow in the repayment schedule. (to be specified) Besides the
borrower will pay interest at the rates that may be prescribed for such lending by RBI/NABARD from time
to time.
5. It is clearly understood by and between the parties hereto that in the event of the borrowers failure to
utilise the proceeds of the credit facility for the purpose for which the same has been made available by
the bank to the borrower, the borrower shall repay immediately on demand without demur together with
interest without prejudice to Banks right to initiate other legal action.
6. The borrower shall pay interest on the loans to be calculated on the daily balances in the loan account
and be debited thereto at quarterly rests or as the bank may decide.
7. The borrower should utilise the proceeds of the credit facility for the purpose of lending to is members to
improve the socio-economic conditions of their members and their families.
8. The borrower shall repay the credit facility availed of together with interest payable as per the interest
rates that may be fixed by RBI/NABARD from time to time for such lendings.
9. The borrower shall be liable to repay the facility on demand together with the interest and other charges
payable by the borrower to the bank in accordance with the rules of the bank.
REPAYMENT SCHEDULE
YMENT SCHEDULE
Please specify
In witness whereof the parties hereto have affixed their signature on the
date and the
month and
year first herein above written.
FOR SHG
FOR BANK
(1) AUTHORISED REPRESENTATIVE
(2) AUTHORISED REPRESENTATIVE
MANAGER

Page 29
28
ANNEXURE IV
SELF HELP GROUP
Saving Bank A/c
A/c No.
Members name
Address
Date
Particulars
Debit/withdrawal Credit/Deposit
Balance
Initials
Rs.
Ps.
Rs.
Ps.
Rs.
Ps.

Page 30
29
ANNEXURE V
SELF HELP GROUP
Loan A/c
Members name
S.B.A/c No.
Loan A/c. No.
Purpose of loan
Repayment Instalment Monthly/Quarterly/Half yearly/Annual Rs.
Date
Particulars
Loan
Interest Amount repaid
Balance
Signature of
Amount
Principal Interest Principal InterestA/c holder/
Member

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30
ANNEXURE VI
SELF HELP GROUP
Cash Book
Date
Particulars
Cheque
Debit
Credit
Balance
Total
Signature
No.
Cash
Bank

Page 32
31
ANNEXURE VII
RESERVE BANK OF INDIA
CENTRAL OFFICE
DEPARTMENT OF BANKING OPERA
ARTMENT OF BANKING OPERA
ARTMENT OF BANKING OPERATIONS
& DEVELOPMENT CENTRE I
OPMENT CENTRE I
WORLD TRADE CENTRE
WORLD TRADE CENTRE, CUFFE P
, CUFFE P
, CUFFE PARADE,
COLABA, MUMBAI 400 005
, MUMBAI 400 005
Ref. DBOD. No. BC. 63/13:01:08/92-93
January 4, 1993
Pausa 14, 1914 (S)
All Scheduled Commercial Banks
(including Regional Rural Banks)
Dear Sir,
Opening of Savings Bank Accounts in the name of Self-Help Groups
Please refer to para 3 (i) of our directive DBOD. No. Dir. BC. 151/C.347-85 dated 27th December 1985 in
terms of which banks have been prohibited from opening of Savings bank accounts in the name of certain
bodies/organizations. The issue relating to opening of savings bank accounts by Self-Help Groups financed by
banks under a pilot project launched by National Bank for Agriculture and Rural Development (c.f. circulars
RPCD. No. Plan BC.13/PL-09.22/90-91 dated 24th July 1991 and No. DPD 104/DPD. FS.4631/92-A/91-92
dated 26th February 1992 issued by our Rural Planning and Credit Department and National Bank for
Agriculture and Rural Development respectively) has been examined and it has been decided that such Self-
Help Groups, registered or unregistered, may be allowed to open Savings Bank Accounts with Banks.
Please acknowledge receipt.
Yours faithfully
(B. D. Nitsure)
. Nitsure)
Deputy Chief Officer.

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32
1-1-61, R.T.C. X Road,
Post Box No. 1863, Musheerabad
Hyderabad-500 020,
ANDHRA PRADESH
Tel.: (040) 7613088
E-mail : nabhy@hd2.vsnl.net.in
VIP Road,
Bank Tinali, Post Box No. 133
Itanagar-791 111,
-791 111,
ARUNACHAL PRADESH
CHAL PRADESH
Tel.: (0360) 212675
Laxmi Bhawan, Dr J C Das Road,
Panbazar, Post Box No. 81
Guwahati-781 001, ASSAM
Tel.: (0361) 513102
E-mail : nabghy@sancharnet.in
4th and 5th floor, Maurya Lok
Complex, Block B,
Dak Bunglow Road,
Post Box No. 178
Patna-800 001, BIHAR
atna-800 001, BIHAR
Tel.: (0612) 210870
E-mail : nabpat@bih.nic.in
1st floor, Pithalia Complex,
Opp. Trunk Exchange,
K.K. Road, Fagadih Chowk,
Raipur-492 009,
-492 009,
CHATTISGARH
Tel.: 692455, 525907, 522558
E-mail : nabrpr@helinfinet.com
3rd Floor, Nazari Bhavan
302, Menezes Braganza Road,
Panaji-403 001, GO
anaji-403 001, GO
anaji-403 001, GOA
Tel.: (0832) 420053
E-mail : nabpnj@goatelecom.com
NABARD Tower, Opp Muncipal Garden,
Usmanpura,
Post Box No. 8,
Ahmedabad-380 013,
GUJARAT
Tel.: (079) 7551618
E-mail : nabahm@icenet.net
NABARD Bhavan, Block No.32,
S.D.A. Commercial Complex
Dev Nagar, Kusumpti,
Shimla-171 009,
HIMACHAL PRADESH
CHAL PRADESH
Tel.: (0177) 220775
E-mail : nabsim17@sancharnet.in
F-1794 Shastri Nagar Extension,
Post Box No. 2,
Jammu-180 004,
JAMMU AND KASHMIR
Tel.: (0191) 434483
E-mail : nabjam@sancharnet.in
Gautam House,
Kalibabu Street, Upper Bazaar
Ranchi-834 001, JHARKHAND
Tel.: (0651) 208657
E-mail : nab_ran@sancharnet.in
113/1, Jeevan Prakash Building
(Annexe),
J C Road, Post Box No. 29
Bangalore
Bangalore-560 002, KARNA
-560 002, KARNA
-560 002, KARNATAKA
Tel.: (080) 2225241
E-mail : nabbng@bgl.vsnl.net.in
Corporation Building Annexe,
Vikas Bhavan Post Office
Post Box No. 6505, Palayam,
Thiruvananthapuram-695 033,
KERALA
Tel.: (0471) 323846
E-mail : nabtvm@md3.vsnl.net.in
E-5, Arera Colony, Bittan Market,
Ravi Shankar Nagar Post Office,
Post Box No. 513,
Bhopal-462 016,
MADHYA PRADESH
A PRADESH
Tel.: (0755) 461644
E-mail : nabbpl@sancharnet.in
54, Wellesley Road,
Shivaji Nagar Post Box No. 5,
Pune-411 005, MAHARASHTRA
-411 005, MAHARASHTRA
Tel.: (020) 5511083
E-mail : nabpun@pn2.vsnl.net.in
89/686 Lalambung, RIMS Road,
Lamphelpat Post Office,
Imphal-795 004, MANIPUR
Tel.: (0385) 312191
E-mail : nbimphal4@sancharnet.in
Dipu Cottage, Upper Lachumiere,
Shillong-793 001, MEGHALA
-793 001, MEGHALA
-793 001, MEGHALAYA
Tel.: (0364) 227463
E-mail: nabsh@shillong.meg.nic.in
Ramhlun Road (North), Bawngkawn,
Aizawl-796 012, MIZORAM
Tel.: (0389) 340815
E-mail : nabaiz@sancharnet.in
Nagaland State Co-op. Bank Building,
Opposite Fire Station,
Dimapur-797 112, NA
-797 112, NA
-797 112, NAGALAND
Tel.: (03862) 27040
E-mail : nabdim@rediffmail.com
3rd Floor, Express Building (Annexe),
10 Bahadur Shaha Zafar Marg,
Post Box No. 12
NEW DELHI-110 002
Tel.: (011) 3319669
E-mail : nabndl@del3.vsnl.net.in
Ankur, 2/1 Nayapalli,
Civic Centre, Post Box No. 179,
Bhubaneshwar
Bhubaneshwar-751 015, ORISSA
-751 015, ORISSA
Tel.: (0674) 553884
E-mail : nabbhu@sancharnet.in
Plot No. 3, Sector 34 - A,
Post Bag No. 7,
Chandigarh-160 022,
PUNJAB & HAR
PUNJAB & HARYANA
Tel.: (0172) 668174
E-mail : nabard1@sancharnet.in
3, Nehru Place,
Tonk Road, Post Box No. 104,
Jaipur-302 015, RAJASTHAN
-302 015, RAJASTHAN
Tel.: (0141) 743215
E-mail : nabjpr@sancharnet.in
Om Niwas, Church Road,
P.B. No. 46,
Gangtok-737 101, SIKKIM
-737 101, SIKKIM
Tel.: (03592) 23015
E-mail : slg_nabgtk@sancharnet.in
105/106 Mahatma Gandhi Road,
Post Box No. 6074, Nungambakkam,
Chennai-600 034, T
Chennai-600 034, TAMIL NADU
AMIL NADU
Tel.: (044) 8273792
E-mail : nabchn@md3.vsnl.net.in
Palace Compound (East),
Uzibari Road, Post Bag No. 9,
Agartala-799 001, TRIPURA
Tel.: (0381) 224125
E-mail : nabagtro@sancharnet.in
Hotel Sunrise Building,
2nd Floor, 113/2, Rajpur Road,
Dehradun-248 001, UTT
Dehradun-248 001, UTTARANCHAL
E-mail : nabarddn@shimlets.com
Commerce House, Habibullah Estate,
11, M. G. Marg, Post Box No. 364,
Hazaratganj, Lucknow-226 001
UTTAR PRADESH
AR PRADESH
Tel.: (0522) 222055
E-mail : nablkn@sancharnet.in
Abhilasha, 2nd Floor,
6 Royd Street, Post Box No. 9083,
Kolkatta-700 016,
olkatta-700 016,
WEST BENGAL
Tel.: (033) 2294672
E-mail : nabcal@cal.vsnl.net.in
Union Territories
erritories
Kannada Sangh Building,
Ground Floor, 18 Tagore Road,
Head Post Office,
Port Blair-744 101,
ANDAMAN & NICOBAR ISLANDS
AMAN & NICOBAR ISLANDS
E-mail : kummur@cal3.vsnl.net.in
Regional Offices of NABARD
egional Offices of NABARD

Page 34
microCredit Innovations Department
National Bank for Agriculture and Rural Development
E Wing, Bandra-Kurla Complex, Bandra (E), Mumbai-400 051 INDIA
Tel: (91) (22) 2653 0084 Fax: (91) (22) 2652 8141
Website: www.nabard.org. Email: nabmcid@vsnl.com
vakils