In order to boost entrepreneurship among rural women, the Ministry of Rural Development (MoRD) is set to focus on select 3-5 lakh women Self Help Groups (SHGs) with a view to convert their “nano enterprises into micro enterprises”.
Under the Aajeevika-National Rural Livelihood Mission (NRLM), these SHGs groups will now be formalised so that they can avail higher loans and scale up their enterprise. Since 2011-12 under NRLM, SHGs have been entitled to get up to Rs 10 lakh as loan without collateral over a period of six to eight years. According to ministry officials, a stock-taking exercise of the total 52 lakh women SHGs, covering six crore women in the country, was carried out to find out how many have used at least Rs 7 lakh so far. About 3-5 lakh SHGs fell into this category, and had also demonstrated a potential to have a larger markets for their products.
Budget outlines government focus
While presenting the Union budget, Finance Minister Nirmala Sitharaman spoke at length on the issue of women’s empowerment. However, National Rural Livelihood Mission (NRLM)- Ajeevika was the sole area, both in terms of women and rural development ministries, that received a substantial increase in allocation, thus outlining the government’s emphasis on the women SHGs. Plans are now being rolled out to boost the enterprise among these SHGs.
A ministry official said that initial loans taken by women SHGs are mostly used to retire their debts, for consumption, or children’s education. “Once these are taken care of, they then move on to economic activity. Many of the SHGs have gotten into higher order activities, but their credit linkage is for very basic level activities. They are, at the most, able to come and display their products at national level exhibitions, but beyond that to scale it up, they needed better credit,” the official said, adding that helping them formalise has been made part of the Union government’s 100-day agenda, and accordingly, a campaign is being rolled out to register them as micro-enterprises. The target for the first 100 days of the government is to bring more NRLM nano enterprises of women SHGs into micro and small enterprises through higher-order bank linkages, bank loans, registration on government e-market portals, and similar e-commerce portals such as Amazon.
“We will also help them get an MSME registration, a GST registration and an income tax registration. If they have these three, they qualify for the 59-minute bank loan sanction scheme,” said the official. Some such enterprises include vermicomposting, setting up a marketplace for farm produce, small shops, running smaller vehicles for public transportation, custom hiring centres for farm implements, or retail.
As per MoRD data, the Rs 2.8 lakh crore leveraged from the banking system to SHGs till date, and non-performing assets (NPAs), which was 7 per cent in 2013-14, has come down greatly to 2.2 per cent in 2018-19. According to a study conducted by the Institute of Rural Management Anand (IRMA), the number of enterprises per village went up by 79 per cent, per capital monthly income by 22 per cent, and per capita productive livestock assets went up by 80 per cent in the NRLM areas as compared to other areas.
The Union Budget 2018-19 has substantially increased funding to NRLM by 60 per cent, and offers Rs 1 lakh MUDRA loan to one woman in each of the SHGs with a view to make them more self-reliant and increase their incomes.