Microfinance Focus, December 15, 2011: National Bank for Agriculture and Rural Development (NABARD) is planning to launch the second version of SHG-Bank Linkage Programme called SHG II.

According to the ‘Microfinance India – State of the Sector Report’, the new programme will comprise of features such as voluntary savings, mechanisms for graduating customers to higher individual or small group loans and a more sustainable mechanism for handholding of SHGs in their initial stage.

The SHG II is expected to improve the present lot of SHGs, some of which are not in the best of health, the report says.

The Finance Minister of India has set a target of linking 5 million groups over the next five years across the country.

In the initial one or two years, groups that have been formed but have not been linked under several government programmes in different states may be targeted. However, it will be a tough task in the remaining years to form and link such a large number of groups, the report says.