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About DAY-NRLM Scheme

The Ministry of Rural Development (MoRD), Government of India launched the National Rural Livelihood Mission (NRLM) by restructuring Swarnajayanti Gram Swarojgar Yojana (SGSY) with effect from 01st April 2013 (RBI Circular No. RBI/2012-13/559 dated 27 June 2013). NRLM was renamed as DAY-NRLM (Deendayal Antyodaya Yojana - National Rural Livelihoods Mission) w.e.f. March 29, 2016. The DAY-NRLM is the flagship program of Government of India for promoting poverty reduction through building strong institutions of the poor, particularly women, and enabling these institutions to access a range of financial services and livelihoods. DAY-NRLM adopts a demand driven approach, enabling the States to formulate their own State specific poverty reduction action plans.

Features DAY-NRLM Scheme

Women SHGs and their Federations: DAY-NRLM promotes affinity-based women Self Help Groups (SHGs). However, only in case of groups to be formed with persons with disabilities and other special categories like elders and transgenders, DAY-NRLM may have both men and women in the Self-Help Groups. Women SHGs under DAY-NRLM consist of 10-20 members. In case of special SHGs i.e., groups in the difficult areas, groups with disabled persons, and groups formed in remote tribal areas, this number may be a minimum of 5 members.

Financial Assistance to the SHGs: Revolving Fund DAY-NRLM, MoRD, will provide Revolving Fund (RF) support as corpus ranging between ₹20,000 - ₹30,000 per SHG to strengthen their institutional and financial management capacity and build a good credit history within the group. SHGs in existence for a minimum period of 3/6 months and follow the norms of good SHGs known as ‘Panchasutras’, viz., regular meetings, regular savings, regular internal lending, regular recoveries and maintenance of proper books of accounts, and which have not received any RF earlier will be eligible for such support.


SHGs should be in active existence for at least 6 months as per their books of accounts (and not from the date of opening of S/B account).

SHGs should be practicing ‘Panchasutras’ i.e., regular meetings, regular savings, regular inter-loaning, timely repayment and up-to-date books of accounts.

SHGs should qualify as per grading norms fixed by NABARD. As and when the federations of the SHGs come into existence, the grading exercise may be done by the federations to support the banks.

The existing defunct SHGs are also eligible for credit if these are revived and continue to be active for a minimum period of three months.

Credit Facilities to SHG members

  1. In order to facilitate women SHG members to graduate to entrepreneurs, banks may consider extending loans up to ₹10 lakh to individual members of select matured well-performing SHGs (SHGs which are more than 2 years old and have accessed at least one dose of bank loan with timely repayment) as per their lending policy. The individual should be running a viable economic enterprise.
  2. One woman in every SHG under DAY-NRLM may be provided a loan up to ₹1 lakh under the MUDRA Scheme, if she is otherwise eligible.
  3. Banks are advised to provide minimum OD facility of ₹5000 to every woman SHG member having PMJDY account in accordance with the guidelines issued by Indian Banks’ Association (IBA).

Purpose of loan and repayment

  • The loan amount would be distributed among members based on the MCP prepared by the SHGs. The loans may be used by members for meeting social needs, high cost debt swapping, construction or repair of house, construction of toilets and taking up sustainable livelihoods or to finance any viable common activity started by the SHGs.
  • In order to facilitate use of loans for augmenting livelihoods of SHG members, at least 50% of loans above ₹1 lakh, 75% of loans above ₹4 lakh and at least 85% of loans above ₹6 lakh should be used primarily for income generating productive purposes. MCPs prepared by SHGs would form the basis for determining the purpose and usage of loans.

Security and Margin

  1. For loans to SHGs up to ₹10.00 lakh, no collateral and no margin will be obtained. No lien should be marked against savings bank accounts of SHGs and no deposits should be insisted upon while sanctioning loans.
  2. For loans to SHGs above ₹10 lakh and up to ₹20 lakh, no collateral should be obtained, and no lien should be marked against savings bank account of SHGs. However, the entire loan (irrespective of the loan outstanding, even if it subsequently goes below ₹10 lakh) would be eligible for coverage under Credit Guarantee Fund for Micro Units (CGFMU).
  3. For loan to SHGs above ₹10 lakh and up to ₹20 lakh, a margin not exceeding 10% of the loan amount exceeding ₹10 lakh may be obtained as per the bank’s approved loan policy.

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