Interest Subvention for Loan to Self Help Groups (SHG’s)

Interest Subvention for Loan to Self Help Groups is the scheme by government of Karnataka which helps the self-help groups (SHG) in dealing with the loan and its rate of interest by providing the subsidy on rate of interest. Basically the SHG’s are the groups where women form the group in particular area and of particular economic background community, which gets registered as the self-help group and they together help each other in dealing with financial crisis. They generally gather money every Sunday or Monday and in this way SHG provide loan to their members from the money that own. And by this loan subvention scheme govt. is trying to strengthen more women and make rural areas more economically strong. Under the scheme govt. will give subsidy on rate of interest in this way repaying the loan will be more easy and SHG will be enough strong to provide financial help.

Benefits of Interest Subvention Loan for Self-Help Groups:

• Subsidy on rate of interest: Government gives subsidy on the rate of interest of loan to Self-Help Group and provides the loan at 4% rate of interest
• Better returns: Since the subsidy is there into the system there will better return at both end. SHG will generate more money and will pay the loan easily whereas govt. institutions granting the loan will get more applications and as a result more opportunities to mint the money for state welfare
• Strong economic conditions: The subsidy will enable easy repayment of loan which indirectly will improve the economic condition of rural area

Eligibility for Interest Subvention for Loan to Self-Help Group:

1. Applicant must be a member of SHG or should be the SHG itself
2. Must be the resident of Karnataka state
3. SHG via which loan application is made should be the member of co-operative banks

Documents Required:

1. Residential Proof (electricity bill, water connection bill, gas connection bill, ration card, voter id, Aadhar card, pan card or driving license)
2. Bank passbook under the name of SHG having (bank name, branch name, account holder name, IFSC & MICR code)
3. Registration proof of SHG (registration number provided by govt.)

Application form:

To apply for the scheme SHG need to visit co-operative bank where they are the member, forms are available at the bank itself.

Whom to contact where to contact for more information about the scheme:

1. Co-operative banks
2. Gram Panchayat
3. Panchayat Samiti
4. Self-Help Group head office

References and Details:

For more details about the scheme kindly visit the following link

1. PDF: http://sahakara.kar.gov.in/shceme.html#7