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.
SHG Loan
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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
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
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
