Microfinance: Effect of National Rural Livelihood Mission (NRLM) on NPAs

Sanjay Singh, Gurcharan Singh


Achieving balanced and inclusive economic growth is a key challenge faced by policy makers in countries around the world. Microfinance sector has responded to these challenges admirably in the last 20 years. Keeping in view the importance of microfinance, the Indian government has started taking initiatives and has launched various new schemes. National Bank for Agriculture and Rural Development (NABARD) is proud to say that the Self Help Group – Bank Linkage Program, which is the largest microfinance program in the world, has touched 101 million households through 7.9 million SHGs. During the year 2015-16, the most enriching development is improved repayment and reduced non-performing assets (NPAs) in SHG-BLP. The savings of SHGs as on 31 March 2016 have reached all-time high of INR 13,691crore and the average savings outstanding per SHG increased by 21% during the year to INR 17,324 as on 31 March 2016 from INR 14,368 a year back. National Rural Livelihood Mission (NRLM) has pushed the SHG bank linkage with better results and lower rates of NPAs of microfinance and a sharpened focus on livelihood generation. The objective of the paper is to reveal the effects of NRLM on NPAs of microfinance. This paper has also focused on initiatives and analyzes the development of the programs regarding microfinance and the effect of increased coordination between NABARD and NRLM.


Microfinance, SHGs, Loans, SHG-BPL, NABARD

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