Bank Linkage & Interest Subvention(BLIS)

Overview

        “Mission Shakti” has been a noteworthy endeavour for women’s empowerment in the State of Odisha. Under Mission Shakti, the SHG-Bank Linkage Programme is a major Financial Inclusion initiative.

        Aiming at ensuring affordable credit to women Self Help Groups, thereby promoting sustainable livelihood of members, The Interest Subvention Scheme was introduced by the State Government in the year 2013 where loans to SHGs were provided at an annual interest of 2% per annum for loans upto 3 lakhs. Subsequently, to encourage SHGs to invest more capital in livelihood activities, the effective annual interest rate was reduced to 1% for women SHGs in the State, for loans up to Rs 3 lakhs from 1st April 2015. Considering the increase in credit off take and to reduce the interest burden, the scheme was revised in 2019 with 0% interest per annum provided the loans are repaid on time. This facility is available for loans up to 3 lakhs and applicable to both rural & urban SHGs irrespective of their promoting agency.

        For better visibility, creation of greater awareness among WSHGs, increased response of banks to SHG Bank linkage and improved monitoring, the State Government has renamed the Interest Subvention Scheme as “Mission Shakti Loan” – Interest free loan for WSHGs.

Objectives

• To reduce the interest burden on WSHGs.

• To enable WSHGs to invest more capital in livelihoods activities resulting in improved quality of life.

• To enhance credit access to WSHGs at an affordable cost, to meet their credit requirement, creating an enabling environment for enhancing productivity and reducing vulnerability.

• To inculcate prompt repayment culture among WSHGs availing credit from Banks.

Interest Rate

• The effective rate of interest for all WSHGs will be at 1% per annum only on prompt and regular repayment for a loan. This benefit is available for loans up-to Rs. 3 Lakh. Beyond loan limit of Rs. 3 Lakh, Banks will charge the usual lending rate. This is applicable from 1st April 2015 to 31st March 2019.

• From 1st April 2019 the effective rate of interest to WSHGs for loans upto 3 lakhs will be at 0% (interest free) with other conditionalities remaining the same.

Participating Banks

• Scheduled Commercial Banks (Public Sector Banks, Private Sector Banks, and Regional Rural Banks) and Co-operative banks, who are operating on the Core Banking Solutions (CBS) can participate and avail the interest subvention under the scheme.