State Revolving Fund:

For ensuring financial viability of SHGs, the state government has been providing separate budget allocation to meet the Revolving fund requirement of groups @ Rs.25,000 (Rs. 10,000/ - subsidy + Rs. 15,000/- loan) to each group. This is in addition to Government of India grant under SGSY. In the year 2004-05, an amount of Rs. 20.60 crores was allotted in the state budget and the entire amount has been released to assist 20596 groups. Besides the above, 39851 groups have been assisted with a subsidy of Rs. 37.49 crores and credit of Rs. 56.24 crores with the opening balance funds available. During 2005-06, an amount of Rs. 27.60 crores is proposed in the budget to extend revolving fund to 27600 groups. An amount of Rs. 41.40 crores is proposed to mobilize towards credit component from banks. All groups which have completed 6 months of thrift and proper group dynamism will be eligible to get the revolving fund .

Thrift and credit working together

Thrift and credit activities have thus emerged as solitary binding force to mobilize rural poor in group mode. The rural poor may not be able to form groups by themselves to command a sufficient strength to approach and negotiate with external agencies like banks for funds. With a view to make thrift and credit activities meaningful for economic empowerment, the groups are gradually encouraged to deploy their funds investment or income generating activities. While doing so, conscious efforts are made by Self Help Promoting Institutions (SHPIs) / Mutually Aided Cooperative and Thrift Societies (MACTS) to build appropriate capacities for managing micro enterprises. Capacity building efforts include training in functional areas of management, skill development, technology up-gradation, market support etc.

SHGs meet the immediate needs of the women. However, the loan amounts are so small that the urge of women to take up income generation activities is not met. Similarly larger issues like buying raw products in bulk, production in large quantity, packing, marketing etc., cannot be undertaken by SHGs due to limitation of membership and corpus. The government decided to provide financial assistance by mobilizing loans from banks etc., to over come the problem.                                                                                                                                

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