🏘️ DAY-NRLM
Complete guide to Deendayal Antyodaya Yojana - National Rural Livelihood Mission for SHG bank linkage
Overview
DAY-NRLM (Deendayal Antyodaya Yojana - National Rural Livelihood Mission), popularly known as Aajeevika, is the government's flagship program for rural poverty alleviation. Launched by the Ministry of Rural Development on 1st April 2013, it was designed to replace the earlier Swarnjayanti Gram Swarozgar Yojana (SGSY) with a more effective, community-driven approach.
The mission operates on two powerful pillars: Social Mobilization and Financial Inclusion. The core objective is to organize the rural poor into robust institutions like Self-Help Groups (SHGs) and federations, and then link them to the formal banking system to access affordable credit.
Key Points at a Glance
To understand the scale and administration of the mission, here are the vital statistics:
| Parameter | Details |
|---|---|
| Launch Date | 1st April 2013 |
| Nodal Ministry | Ministry of Rural Development (MoRD) |
| Funding Ratio | Shared between the Centre and States in a 60:40 ratio. For North East Region (NER) and Himalayan states, it is 90:10. |
| Nodal Agency | Indian Bank acts as the central agency for managing the interest subvention claims from all other banks. |
Eligibility for SHGs
A Self-Help Group (SHG) is a group of women who come together to save money and solve local problems. However, to qualify for support under DAY-NRLM, they must meet these specific standards:
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Overview
DAY-NRLM (Deendayal Antyodaya Yojana - National Rural Livelihood Mission), popularly known as Aajeevika, is the government's flagship program for rural poverty alleviation. Launched by the Ministry of Rural Development on 1st April 2013, it was designed to replace the earlier Swarnjayanti Gram Swarozgar Yojana (SGSY) with a more effective, community-driven approach.
The mission operates on two powerful pillars: Social Mobilization and Financial Inclusion. The core objective is to organize the rural poor into robust institutions like Self-Help Groups (SHGs) and federations, and then link them to the formal banking system to access affordable credit.
Key Points at a Glance
To understand the scale and administration of the mission, here are the vital statistics:
| Parameter | Details |
|---|---|
| Launch Date | 1st April 2013 |
| Nodal Ministry | Ministry of Rural Development (MoRD) |
| Funding Ratio | Shared between the Centre and States in a 60:40 ratio. For North East Region (NER) and Himalayan states, it is 90:10. |
| Nodal Agency | Indian Bank acts as the central agency for managing the interest subvention claims from all other banks. |
Eligibility for SHGs
A Self-Help Group (SHG) is a group of women who come together to save money and solve local problems. However, to qualify for support under DAY-NRLM, they must meet these specific standards:
- Type: The group must be Affinity-based, meaning members share a common socio-economic background or bond (e.g., neighbors or coworkers).
- Membership: A standard group consists of 10-20 women. At least 70% of these members must belong to rural poor families (identified through SECC data or the Participatory Identification of Poor).
- Special Scopes: In hilly, desert, or difficult areas, the minimum membership can be as low as 5 persons. For groups consisting of disabled persons, elders, or transgenders, both men and women are allowed to join.
- Active Existence: The SHG must have been active for at least 6 months.
- The Panchasutras: This is the most critical requirement. The SHG must religiously practice the five principles of financial discipline to be considered "Standard."
The Panchasutras (5 Principles)
These five cardinal rules are the backbone of a successful SHG. They build the trust and credit history that banks look for:
- Regular Meetings: Members must meet weekly or fortnightly to discuss group progress and needs.
- Regular Savings: Every member contributes a fixed, agreed-upon amount to the common fund regularly.
- Regular Internal Lending: The saved corpus is lent to members within the group for their immediate needs or tiny businesses.
- Regular Recoveries: Members must repay their internal loans on time to keep the fund rotating and healthy.
- Maintenance of Books of Accounts: All transactions must be recorded transparently in proper registers to ensure accountability.
Stages of Financial Assistance
NRLM supports SHGs in two distinct phases to help them grow from small savings groups into enterprise-level entities:
1. Revolving Fund (RF)
The government provides a minimum of ₹20,000 to a maximum of ₹30,000 as an initial corpus. This is not a loan; it is a grant given to SHGs that have been active for 3-6 months. Its purpose is to build institutional capacity—it gives the group enough money to start internal lending and "proof of concept" before they approach a bank.
2. Bank Credit Linkage (CCL)
Once an SHG is stable, it can access large-scale credit from banks, usually as a Cash Credit Limit (CCL). This is a running account where the group can withdraw and deposit money as needed.
| Phase | Minimum Credit Limit | Basis of Calculation |
|---|---|---|
| 1st Year | ₹1,50,000 | 6 times the group's own corpus (savings + grant). |
| 2nd Year | ₹3,00,000 | 8 times the corpus or based on a Micro Credit Plan. |
| 3rd Year | ₹6,00,000 | Based on the Micro Credit Plan (MCP) prepared by the group. |
| Subsequent | Incremental | Aiming for an ultimate credit of ₹10 Lakh per SHG over 6 years. |
Purpose of Loan Utilization
As the loan amount grows, the government encourages groups to move from "survival" to "growth."
- Small Loans (Up to ₹1 Lakh): Usually used for consumption, health, or education emergencies.
- Loans above ₹1 Lakh: At least 50% must be used for income generating productive purposes.
- Medium Loans (Above ₹4 Lakh): At least 75% must be used for productive purposes (income-generating activities).
- Large Loans (Above ₹6 Lakh): At least 85% must be dedicated to productive purposes like starting a shop, poultry farm, or tailoring unit.
Loan Purposes under MCP (Micro Credit Plan):
- Addressing social necessities
- Swapping high-cost debts
- Building or repairing homes
- Constructing toilets
- Supporting sustainable livelihoods or funding viable group activities
MCPs prepared by SHGs form the basis for determining the purpose and usage of loans.
Term Loan Structure
In case of Term Loan (alternative to CCL), banks are advised to sanction loans in doses:
| Dose | Minimum Amount | Basis |
|---|---|---|
| 1st Dose | ₹1.5 Lakh or 6x corpus (whichever is higher) | Initial credit linkage |
| 2nd Dose | ₹3 Lakh or 8x corpus (whichever is higher) | Based on repayment track record |
| 3rd Dose | ₹6 Lakh minimum | Based on MCP and credit history |
| 4th Dose+ | Above ₹6 Lakh | Based on MCP and credit history |
Repayment Schedule for Term Loans
| Dose | Repayment Period | Instalments |
|---|---|---|
| 1st Dose | 24-36 months | Monthly/Quarterly |
| 2nd Dose | 36-48 months | Monthly/Quarterly |
| 3rd Dose | 48-60 months | Based on cash flow |
| 4th Dose+ | 60-84 months | Based on cash flow |
Collateral-Free Loans (2026 Update)
To empower rural women without the fear of losing assets, DAY-NRLM ensures that these loans are highly accessible:
| Loan Amount | Collateral Requirement | Margin Requirement |
|---|---|---|
| Up to ₹20 Lakh | None (Absolutely no security required). | None (No self-contribution needed). |
| Above ₹20 Lakh | Collateral as per bank norms. | 10% contribution likely. |
IMPORTANT
No Lien on Savings: Banks are strictly forbidden from "locking" or marking a lien against the SHG's savings account. The groups must have free access to their own saved money at all times.
The Lakhpati Didi Initiative (2026 Target)
The newest strategic focus of the mission is the Lakhpati Didi program. The goal is to transition SHG members from mere wage earners to self-made entrepreneurs.
What is a Lakhpati Didi?
A Lakhpati Didi is a Self-Help Group (SHG) member who earns an annual household income of Rupees One Lakh (₹1,00,000) or more. This is not a one-time windfall; the income is calculated for at least four agricultural seasons and/or business cycles, with an average monthly income exceeding Rupees Ten Thousand (₹10,000), ensuring it is sustainable.
Beyond Income: A Transformation Journey
They serve as an inspiration to the community, not solely for their income, but for their transformation journey. This journey involves:
- Adopting sustainable livelihood practices (farm, non-farm, or service-based).
- Effectively managing resources at the household level.
- Achieving a decent standard of life.
The Role of SHGs
The SHG groups have fostered collective action and mutual support, while also serving as conduits for crucial financial literacy, skill development, and livelihood assistance. Notably, the focus has shifted beyond mere social and financial inclusion, now aiming to empower SHG members to pursue entrepreneurial ventures. Their inherent skills and potential position them well to move towards higher income brackets.
Convergence Strategy
The Lakhpati initiative facilitates diversified livelihood activities by ensuring convergence across all Government departments/Ministries, Private Sector, and Market players. The strategy includes focused planning, implementation, and monitoring at all levels.
Key Targets
| Parameter | Details |
|---|---|
| Target Population | Over 3 Crore women are targeted to become 'Lakhpati Didis'. |
| Income Threshold | Minimum ₹1 Lakh per annum (avg. ₹10,000/month). |
| Calculation Period | Income measured over 4 agricultural/business cycles. |
Banking & Savings Provisions
SHG Accounts
- SHGs Savings Account: Separate savings and loan accounts should be maintained. Encourages saving habits.
- Individual Members: Must adhere to KYC norms for savings accounts.
- Federation Accounts: Accounts for SHG federations should be opened as 'Association of Persons'.
- Producer Groups: Current accounts can be opened for PGs at different levels.
- Transactions: Facilitated at retail outlets managed by BC Agents and other approved services.
Post-Credit Support
- Provide SHGs with loan passbooks or statements in local languages.
- Bank officials should periodically attend SHG meetings.
- Banks to ensure recovery through various measures, including joint recovery camps.
- Banks to work closely with local District Mission Management Units.
- Banks to monitor and review credit flow via DAY-NRLM cells.
- Strategic partnerships between banks and SRLM.
- Special committees at various levels to aid in loan utilization and recovery.
Interest Subvention Scheme for Women SHGs
- Special interest rates and schemes for women SHGs based on district classification.
- Incentives for prompt loan repayments.
Mission Shakti
- Initiated by the Odisha government in 2001.
- Focuses on women's economic empowerment.
- Aims to grow the number of women in WSHGs and provide them with credit and market linkages.
Interest Subvention (Affordable Credit)
To ensure that the "interest burden" doesn't crush small businesses, the government provides Interest Subvention to bring the effective interest rate down.
- Standard Subvention: For all women SHGs, the central government provides subvention up to ₹3 Lakh to bring the interest rate down to 7% per annum.
- Prompt Repayment Incentive: In 250 identified districts, groups that repay their loans on time get an extra 3% subvention. This brings their effective interest rate to just 4%!
Note: There is no Capital Subsidy (cash back on the principal) under NRLM; the entire benefit is delivered through the interest subvention. Interest subvention replaced the earlier capital subsidy support in both DAY-NRLM and DAY-NULM.
Interest Subvention Details (FY 2024-25)
| Loan Slab | Interest Rate for SHGs | Subvention Rate to Banks |
|---|---|---|
| Up to ₹3 Lakh | 7% p.a. concessional rate | 4.5% p.a. uniform rate |
| ₹3 Lakh to ₹5 Lakh | 1-year MCLR or external benchmark rate or 10%, whichever is lower | 5% p.a. uniform rate |
- Nodal Bank: Indian Bank has been nominated as the Nodal Bank for FY 2024-25 by the Ministry of Rural Development (MoRD).
- All banks are required to submit claim certificates on quarterly basis to the Nodal Bank.
- Under NRLM, a women SHG is entitled for interest subvention on loan up to a maximum of ₹3,00,000/-.
Social Inclusion Targets
The mission ensures that the most vulnerable sections are not left behind:
- SC/ST Households: 50% of total program beneficiaries must be from Scheduled Castes/Tribes.
- Minorities: 15% of targets are earmarked for minority communities.
- Disabled: 3% horizontal reservation for persons with disabilities.
Summary Cheat Sheet
| Parameter | Key Details / Explanation |
|---|---|
| Mission Goal | 3 Crore Lakhpati Didis (Annual income >₹1L). |
| Panchasutras | The "Five Pillars" of discipline (Meetings, Savings, Lending, Recovery, Books). |
| Funding | 60:40 (General) / 90:10 (NER). |
| Collateral Free | Loans up to ₹20 Lakh require no security or margin. |
| Interest Rate | Effectively 7% (Standard) or 4% (with prompt repayment incentive). |
| Credit Limit | Incremental limits starting from ₹1.5L up to ₹10L+. |
| Exclusion | No Lien on savings account; no capital subsidy allowed. |
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