Financial Inclusion
Based on the eligibility criteria, the mission would provide Experience from large-scale projects showing access to repeat finance, at an affordable price, for the desired amount and customized repayment terms is crucial for poor and vulnerable groups of society, to meet their consumption, exit debt trap and investment in livelihood assets.
Based on the eligibility criteria, the mission would provide financial support to the institutions with the intent to inject financial resources into the institutions of the poor to meet their credit needs for both consumption purposes and also for investment in livelihoods promotion. This fund would be eventually a corpus /capital resource for institutions of the poor. The poorest and the most vulnerable groups would be given priority for capital subsidy. Largely this fund is expected to be used for on-lending to the SHGs for providing financial assistance to meet their livelihoods & other essential needs. USRLM will strategize the routing of financial assistance to the institutions of the poor in all intensive blocks within the overall guidelines provided in the NRLM ‘Framework for Implementation’.
NRLM will provide interest subsidies to the rural poor to access credit at a 7% rate of interest to make their investment more viable. Interest subsidy would be performance-linked on a long-term engagement with banks over the entire credit cycle.
Banks have a critical role in providing services including opening savings accounts for community groups, SHGs, and their federations; deposit savings; and provide credit and remittances. NRLM would develop strategic partnerships with major banks and insurance companies at various levels, to create enabling conditions for banks/insurance companies and the poor for a mutually rewarding relationship (both supply and demand side of the rural finance value chain). On the demand side, NRLM will ensure that financial literacy, counseling services on savings, credit, and insurance, and training on micro-investment Planning are embedded in the capacity building of all SHGs. ‘Bank Mitras’ (customer relationship managers selected from among the community) will be positioned in banks to improve the quality of banking and insurance services to poor clients. On the supply side, NRLM will forge partnerships with banks to reach out to all poor, leveraging IT mobile technologies and institutions of poor and youth as business facilitators and business correspondents.