Credit Linkage for Self-Help Groups (SHGs) — collateral-free bank loans
Government of India — DAY-NRLM and DAY-NULM (through the State Livelihood Missions)
Overview
A programme that gives self-help groups (SHGs) and their members access to institutional credit from banks. It is a key component of the livelihood missions under Deendayal Antyodaya Yojana — the National Rural Livelihoods Mission (NRLM) and the National Urban Livelihoods Mission (DAY-NULM). Groups get collateral-free loans from banks and financial institutions to start or grow small businesses and income-generating activities.
An SHG becomes eligible for finance after completing 6 months from its start and maintaining proper books of account. Besides loans, groups get initial revolving fund support, training in financial literacy, enterprise development and group management, and help linking their products to markets. Most SHG members are women, so the programme also supports women's financial independence and reduces dependence on moneylenders.
It is implemented through the State Rural and Urban Livelihood Missions, banks, SHG federations and local institutions. Loan applications reach the bank through SHG representatives or mission officials.
At a glance
- Administering authority
- Government of India — DAY-NRLM and DAY-NULM (through the State Livelihood Missions)
- Scheme type
- Business & Finance, Women & Children
- Place of posting / area
- All India
- Application mode
- Offline
- Important dates
- Applications accepted year-round
Benefits
- Collateral-free bank loans for livelihood activities
- A savings habit and entry into the formal banking system
- Support for micro-enterprises, self-employment and income generation
- Financial independence and social empowerment for women
- Training in financial literacy, enterprise development and group management
- Initial revolving fund support to strengthen the group
- Help linking SHG products and services to markets
- Less dependence on moneylenders, with credit at reasonable rates
Eligibility
- Self-help groups formed under the NRLM/NULM frameworks
- SHGs with regular savings and internal lending
- Members from economically weaker sections — women, SC/ST, minorities and other vulnerable groups
- SHGs that hold regular meetings, keep proper records and maintain financial discipline
- Rural and urban poor households organised into SHGs
- An SHG can get finance only after completing 6 months from its start and maintaining books of account
How to apply
Where to go:
- Banks and financial institutions
- State Rural Livelihood Mission (SRLM) offices
- Urban local bodies / State Urban Livelihood Missions
- Self-help group federations
- Common Service Centres (CSCs)
Process:
- SHGs are formed under the livelihood missions and start regular savings
- Once the group shows financial discipline, it becomes eligible for bank linkage
- The loan application goes to the bank through SHG representatives or mission officials
- The bank assesses it and approves a loan without collateral, as per guidelines
- The loan is paid into the SHG's bank account
- The money is used for livelihood and income-generating activities, monitored by banks, mission staff and local institutions
Last updated: 1 Nov 2026
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