Empowering Self Help Groups with accessible credit to turn collective aspirations into sustainable growth. With Cent SHG, stronger women build stronger communities and a stronger India.
Some of the most inspiring stories in banking don't begin in a branch. They begin in a village room, where ten or twelve women pool fifty-rupee notes into a common fund, month after month.
That is a Self Help Group — and at Central Bank of India, we have seen these small groups transform entire families.
What is an SHG loan?
A Self Help Group is a group of 10 to 20 members, mostly women, who save regularly and lend to each other from their pooled savings. Once a group has functioned well for about six months — saving consistently, keeping basic records, recovering internal loans — it becomes eligible for bank credit under the SHG-Bank Linkage Programme, pioneered by NABARD in 1992.
How it works
The bank lends to the group, not to individuals. The group decides who needs money and for what — a dairy animal, a sewing machine, seeds for the season. Repayment is a collective responsibility, and that shared accountability is why SHG recovery rates are among the best in the industry.
Key features
Loans are typically sanctioned as a multiple of the group's savings — starting at one to two times the corpus and rising with each successful repayment cycle. Under DAY-NRLM, women SHGs enjoy interest subvention, bringing effective rates down to around 7 percent, and even lower for prompt-paying groups in select districts.
And the most powerful feature of all: no collateral. A woman with no land or property in her name can access formal credit purely on the strength of her group's discipline.
More than money
An SHG loan delivers something no other product does — confidence. A savings passbook in her own name. A bank that greets her as a customer. A seat at the table when household decisions are made.
Visit your nearest Central Bank of India branch to know more about SHG savings accounts and credit linkage. Small savings today; a stronger tomorrow.
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