2015 · GS Paper 2 · Q9 · 12 marks
The Self-Help Group (SHG) Bank Linkage Programme (SBLP), which is India's own innovation, has proved to be one of the most effective poverty alleviation and women empowerment programmes. Elucidate.
In short
The SBLP, India's own model of lending to whole groups through existing banks, cut poverty by replacing collateral with trust and empowered women by putting credit and voice in their hands. Begun as NABARD's 1992 pilot of 500 groups, it now spans over a crore SHGs.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 268 words
Trust as collateral
Joint liability replaces collateral, freeing households from moneylenders, and RBI's 1996 priority-sector status drew banks in.
Graduated credit
Repeat loans move members from consumption smoothing to dairy, goatery and small trade.
Affordable credit
Andhra Pradesh's Pavala Vaddi (2004) cut the rate to 3% for prompt repayers, and DAY-NRLM's subvention brings it to 7%.
Economic agency
Most linked groups are women's groups, so loans and savings sit in a woman's name, strengthening her say in household spending and decisions.
Collective voice
Bihar's Jeevika didis helped bring prohibition in 2016, and Kudumbashree members contest panchayat polls.
Partners of the state
Federations run take-home-ration units in Madhya Pradesh, and trained members serve as Bank Sakhis.
Uneven reach
Linkage stays concentrated in the southern states, and some loans are controlled by male relatives, so results depend on group quality.
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SHGs6 questions
Asked in 6 of 14 sittings since 2013
- 2021Can the vicious cycle of gender inequality, poverty and malnutrition be broken through microfinancing of women SHGs? Explain with examples.
- 2020"Micro-Finance as an anti-poverty vaccine, is aimed at asset creation and income security of the rural poor in India". Evaluate the role of the Self Help Groups in achieving the twin objectives along with empowering women in rural India.
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Question from the official UPSC Civil Services (Main) Examination 2015 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.