Finance Minister Nirmala Sitharaman presented the budget for the financial year on Saturday. In his budget, the Finance Minister has given a great proposal that mainly 10 million people living in rural India, who have joined the Self Help Group (SHGS), will get a credit score based on their performance.
In the budget speech of Finance Minister Nirmala Sitharaman, it said in a parent, “The banks of the folk region will develop ‘rural credit score’ structure, which will meet the credit needs of members of SHG and people of rural areas.”
A government official explained it as: Every bank has found that the record of repaying the loan of SHGS is excellent, which has a return rate of about 100 percent. However, these excellent figures could not be used by individual members under existing rules to take loans from banks. Now, banking rules will be changed to increase the availability of credit.
The idea was developed through two specialist groups appointed by the Ministry of Finance and the Ministry of Rural Development in this financial year, which aims to promote retail credit from banks to rural and semi-urban areas, while risks of bad loans Had to reduce
This shocking budget proposal was based on the recommendations made by him. This means that now banks can provide a personal credit score for its members, which will be called a rural credit score, using the credit score of SHG. While microfinance institutions use some such versions, banks were not able to do it till now.
Now, when a member is part of a SHG, whose track record is excellent, he can apply for personal loans from banks using his Kumulant Credit Score.
The Ministry of Rural Development has already taken steps to develop a Saras collection with the Government E-Marketplace (GEM) to market the SHG products. In addition, agreements have been enacted with Flipkart, Amazon, and Misho, so that SHG producers, such as artisans, weavers and craftsmen, can reach the national markets. The ministry estimates that about 99.8 million women families have been included in 90.39 lakh SHGS.