Acknowledging the large size of unorganised sector, Union Finance Minister Arun Jaitley has exhorted financial institutions, including Nabard, and banks to step up focus on improving credit flow to unorganised sector and has said that it will help to push employment growth. He also said that it is a fact that people in the unorganised sector are much higher than the organised sector, but the former gets credit with lot of difficulty.
Jaitley pointed out that if the resources of banks and financial institutions through various schemes are diverted towards unorganised sector, it will help create more employment. Regarding the benefits of self-help groups (SHGs), he said they have come a long way and generated lakhs of jobs in rural areas. He further said that since most SHGs are women-led, these have brought in financial security for rural women. He also said it has been observed that SHGs the repayment capacity is much higher with regard to all microfinance schemes.
The Finance Minister said he was hopeful that the Nabard-led initiative of SHG-Bank Linkage Programme would further expand in the coming days. Over a span of 25 years, the SHG-Bank linkage programme has grown into a massive movement with 85 lakh SHGs across the country now part of this programme. The total loan exposure of the banking system to SHGs is about Rs 61,000 crore. Meanwhile, the credit growth has plunged to a six-decade low of 5.08% in 2016-17 against 10.7% a year ago.
