the goan I network
PANAJI
There is a misconception in certain circles that self-help-groups (SHGs) have to be registered under The Goa Co-Operative Societies Act in order to get loans from banks. However, in reality, SHGs don’t have to be registered to take loans from banks. But, of course, banks have a process, which has to be fulfilled to give loans to SHGs.
This topic was debated during the MSME Outreach Programme For Food Processing Units, which was conducted at Goa Chamber of Commerce and Industry (GCCI) in Panaji. Representatives of small industries highlighted that certain banks are asking for registration to give loans to SHGs, which is causing them huge problem.
Responding to this, KL Nayak, AGM (assistant general manager), NABARD-Goa, said, “Nowhere in India is registration needed to give loans to SHGs. Overall in India, Rs 80,000 crore have been disbursed as collateral free loans to SHGs. It is highly appreciable that recovery rate of these loans is 95%.”
SHGs are run by poor people in needy sections of society. If SHGs have to be registered, it will put a lot of added pressure on them without bringing any benefit to them.
Sushil Naik, district development manager, NABARD-Goa, said, “As per RBI and NABARD guidelines, SHGs should not be registered to get bank loans. This is because these are informal groups. However, in Goa, there are some State Government’s schemes, which require SHGs to be registered. If SHGs are registered, then they have to get audit done, which is an additional cost to them.”
KL Nayak continued, “By registering, SHGs will merely get a number, which will really not help banks in recovering loans. However, SHGs need to fulfill certain criteria in order to get loans from banks. For example: SHGs should be existing for minimum 6 months. They should also maintain accounts.”
Since SHGs are run by poor people, therefore, they are eligible to get collateral free loans. This is because people running SHGs are not able to provide collateral even when a bank asks. Despite that, the repayment rate for SHG loans in Goa stands at 96%, which shows that they are credit-worthy and indeed deserve banking finance.
Sushil Naik said, “The guidelines provide that SHGs have to be registered only if they have more than 20 members. However, there are hardly any SHGs with more than 20 members.”
NEW OPPORTUNITIES
Self-help-groups (SHGs) don’t have to be registered to take loans from banks. But, of course, banks have a process, which has to be fulfilled to give loans to SHGs
There is a misconception in certain circles that self-help-groups (SHGs) have to be registered under The Goa Co-Operative Societies Act in order to get loans from banks
SHGs are run by poor people in needy sections of society. If SHGs have to be registered, it will put a lot of added pressure on them without bringing any benefit to them
Since SHGs are run by poor people, therefore, they are eligible to get collateral free loans
