Empowering Self-Reliance with SHG Loans
Strong communities are built on empowered individuals. An SHG Loan (Self Help Group Loan) is designed to uplift rural and underserved communities by providing collective access to financial support. Whether it’s starting a small enterprise, boosting agriculture activities, or funding cottage industries—SHG loans help groups of women and individuals grow together economically and socially.
These loans are a beacon of opportunity for people who may not have easy access to conventional banking. With shared responsibility, minimal documentation, and low-interest rates, SHG Loans encourage savings, discipline, and self-reliance.
What is an SHG Loan?
An SHG Loan is a group-based lending model where a group of 10–20 members—often women—form a Self Help Group. These members pool savings, maintain financial records, and access loans collectively for individual or group-based income-generating activities. The mutual guarantee system ensures better repayment rates and financial inclusion.SHG Loans are ideal for:
- Women entrepreneurs
- Rural artisans and farmers
- Micro-businesses
- Cottage industry owners
- Low-income groups without formal collateral
Top Benefits of SHG Loans
Eligibility Criteria
Group size: 10–20 members
Should have regular group meetings and pooled savings
SHG must be at least 6 months old
Group must have internal lending and financial discipline
Members should belong to similar socio-economic backgrounds
Must have a basic SHG record book or register
- Small-scale farming and livestock purchase
- Stitching, weaving, handicrafts, and rural artisanship
- Setting up grocery or tailoring shops
- Purchasing agricultural equipment
- Running food or dairy businesses
- Educational or emergency needs of members
Documents Required
- SHG registration documents or meeting book
- KYC documents of each member (Aadhaar, Voter ID, etc.)
- Bank passbook of SHG account
- Group photograph
- Signature or thumbprint of all members
- Loan application form signed by all members
- Hold regular SHG meetings and maintain savings discipline
- Use the loan amount for income-generating or productive activities
- Keep clear records of fund usage and repayment
- Ensure timely repayment by all members to maintain credibility
- Encourage participation and transparency among all group members
- Don’t use funds for non-productive personal expenses
- Avoid delays in EMIs, as group reputation is at stake
- Don’t misrepresent group activities or member details
- Avoid lending to members who are not financially disciplined
- Don’t neglect SHG bookkeeping—it is crucial for future financing
Key Features
Group Lending Advantage
Easy Access to Credit
Quick approvals for SHGs with proven track records.
Low-Cost Loans
Access subsidized or priority sector lending rates.
Promote Livelihood
Build Financial Literacy
Encourages saving habits, record-keeping, and money management.
SHG Formation
Savings Discipline
Regular pooling of savings and internal lending
Bank Linkage
SHG account opened with a local bank
Loan Application
Collective request submitted for credit requirement
Loan Disbursal
Funds disbursed to group or individual members
Repayment
Shared responsibility ensures timely EMIs and loan closure
FAQs – Frequently Asked Questions
While SHGs are commonly women-led, men can also form SHGs if guidelines allow in the region or under specific programs.
The group is collectively responsible. Regular monitoring and peer pressure generally ensure full repayment.
Loan amounts vary based on group performance and history—typically from ₹50,000 up to ₹10 lakhs or more in stages.
Yes. Most banks require 6 months of consistent saving and meeting activity before granting loans.
Grow Together.
Rise Together.
SHG Loans are more than just financial support—they are the backbone of rural development and women’s empowerment. By harnessing the strength of community and shared responsibility, SHGs help unlock entrepreneurship, create livelihood opportunities, and build stronger families and societies.
Whether it’s running a tailoring unit, expanding a grocery store, or investing in agriculture—SHG Loans provide a safe, scalable, and sustainable path to prosperity. If you’re part of a like-minded group working towards a better tomorrow, this loan can be your stepping stone toward economic freedom and self-reliance.
Take control of your collective future—apply for an SHG Loan today.
