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 for consumption purposes and also for investment in livelihoods promotion. This fund would be eventually a corpus /capital resource for institutions of the poor. The poorest and the most vulnerable groups would be given priority for capital subsidy. Largely this fund is expected to be used for on-lending to the SHGs for providing financial assistance to meet their livelihoods other essential needs. Each state will strategies the routing of the financial assistance to the institutions of the poor both in the intensive and non-intensive blocks within the overall guidelines provided in the NRLM ‘Framework for Implementation’.
NRLM will provide sub vision to the rural poor in order to access credit at 7% rate of interest to make their investment more viable. Sub vision would be performance linked on a long term engagement with banks over the entire credit cycle.
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 develop strategic partnerships with major banks and insurance companies at various levels, to create enabling conditions for banks/insurance companies and the poor for a mutual rewarding relationship (both supply and demand side of rural finance value chain). On the demand side NRLM will ensure that financial literacy, counseling services on savings, credit and insurance and trainings on micro-investment Planning are embedded in capacity building of all SHGs. ‘Bank Mitras’ (customer relationship managers selected from among the community) will be positioned in banks for improving quality of banking and insurance services to poor clients. On the supply side, NRLM will forge partnerships with banks for reaching out to all poor, leveraging IT mobile technologies and institutions of poor and youth as business facilitators and business correspondents.
NRLM will ensure universal coverage of micro-insurance services, particularly to cover life, health and asset risks of the poor and vulnerable households, by seeking convergence with the insurance schemes of Government of India.