- In order to boost entrepreneurship among rural women, the Ministry of Rural Development (MoRD) is set to focus on select 3-5 lakh women Self Help Groups (SHGs) with a view to convert their “nano enterprises into micro enterprises”.
- A Nano enterprise is usually a household enterprise with fixed capital investment of Rs 5 lakh or less. A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh.
- Since 2011-12 under NRLM, SHGs have been entitled to get up to Rs 10 lakh as loan without collateral over a period of six to eight years.
- However, not many SHGs have availed this opportunity to grow. Many of the SHGs have gotten into higher order activities, but their credit linkage is for very basic level activities.
- They are, at the most, able to come and display their products at national level exhibitions, but beyond that to scale it up, they needed better credit.
- According to MoRD officials, a stock-taking exercise of the total 52 lakh women SHGs, covering six crore women in the country was carried out to find out how many have used at least Rs 7 lakh so far.
- About 3-5 lakh SHGs fell into this category, and had also demonstrated a potential to have a larger markets for their products. Some such enterprises include vermicomposting, setting up a marketplace for farm produce, small shops, running smaller vehicles for public transportation, custom hiring centres for farm implements, or retail.
- Turning Nano enterprises into Micro enterprises:
- The target for the government is to bring more NRLM nano enterprises of women SHGs into micro and small enterprises through higher-order bank linkages, bank loans, registration on government e-market portals, and similar e-commerce portals such as Amazon.
- Under the Aajeevika-National Rural Livelihood Mission (NRLM), these 3-5 lakh women SHGs will now be formalised so that they can avail higher loans and scale up their enterprises.
- They will also be helped to get an MSME registration, a GST registration and an income tax registration, which will help them qualify for the 59-minute bank loan sanction scheme.
About: National Rural Livelihood Mission
- National Rural Livelihood Mission (NRLM), also referred to as Ajeevika – NRLM, is a poverty alleviation project launched by Ministry of Rural Development 2011. It is aided in part through investment support by the World Bank.
- The Swarnajayanti Grameen Swarojgar Yojana (SGSY) launched in 1999, was remodelled to form NRLM in 2011, thereby plugging the shortfalls of SGSY.
- This scheme is focused on promoting self-employment and organization of rural poor. The basic idea behind this programme is to organize the poor into SHGs and make them capable for self-employment.
- It works towards bringing at least one member (preferably a woman) from all poor families into the SHG network.
- Pillars: NRLM rests on three major pillars – universal social mobilization, financial inclusion and livelihoods enhancement.
- In November 2015, the program was renamed Deendayal Antayodaya Yojana – NRLM (DAY-NRLM).
About: Deen Dayal Antyodaya Yojana – NRLM (DAY-NRLM)
- The Mission aims at creating efficient and effective institutional platforms of the rural poor enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.
- It believes in harnessing the innate capabilities of the poor and complements them with capacities (information, knowledge, skills, tools, finance and collectivization) to participate in the growing economy of the country.
- In addition, the poor would be facilitated to achieve increased access to rights, entitlements and public services, diversified risk and better social indicators of empowerment
Universal Social Mobilisation
- At least one woman member from each identified rural poor household, is to be brought under the Self Help Group (SHG) network in a time bound manner.
- Special emphasis is particularly on vulnerable communities such as manual scavengers, victims of human trafficking, Particularly Vulnerable Tribal Groups (PVTGs), Persons with Disabilities (PwDs) and bonded labour.
- It focuses on stabilizing and promoting existing livelihood portfolio of the poor through its three pillars
- Vulnerability reduction and livelihoods enhancement through deepening/enhancing and expanding existing livelihoods options and tapping new opportunities in farm and non-farm sectors
- Employment – building skills for the job market outside
- Enterprises – nurturing self-employed and entrepreneurs (for micro-enterprises)
- It works on both demand and supply sides of financial inclusion.
- On the demand side, it promotes financial literacy among the poor and provides catalytic capital to the SHGs and their federations.
- On the supply side, the Mission coordinates with the financial sector and encourages use of Information, Communication & Technology (ICT) based financial technologies, business correspondents and community facilitators like ‘Bank Mitras’.
- Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of the government to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them.
- It was launched in 2015 and provides loans up to Rs 10 lakh to non-corporate, non-farm small/micro enterprises.
- If any SHG wants to start new business or any venture that creates employment, they can avail loan under the Mudra Bank Yojana without guarantee and mortgage.
- The Union Budget 2018-19 proposed that One woman in every SHG will also be made eligible for a loan up to Rs. 1 lakh under the MUDRA Scheme.