National Rural Livelihood Mission (NRLM)is a mission that focuses on improving the credit flow to the rural poor women through the promotion of Self Help Groups and Institutions of the Poor. Experience from large scale projects shows access to repeat finance, at affordable price, for desired amount and customised repayment terms is crucial for poor and vulnerable group of the 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 of poor with intent to inject financial resources into the institutions of poor for meeting 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. Largely this fund is expected to be used for on-lending to the SHGs for providing financial assistance. The rural poor need credit at low rate of interest and in multiple doses to make their ventures economically viable. In order to ensure affordable credit, all woman SHGs under NRLM will be eligible for interest subvention to avail credit at 7% per annum for all eligible SHGs to meet their livelihoods and other essential needs.
Banks have a critical role in providing services including opening savings accounts for community groups, SHGs and their federations; deposit savings; provide credit and remittances. NRLM would work towards achieving universal financial inclusion, beyond basic banking services to all the poor households, SHGs and their Federations. Making poor the preferred clients of the banking system and mobilizing bank credit is core to the NRLM financial inclusion and investment strategy.In order to assist the poor come out of poverty the banks are required to provide adequate timely and repeat doses of credit to poor. The NRLM has a strong focus on access to financial services by the poor. SHG Bank linkage is one of the most important pillars of the program.