Self Help Group Movement — Policy Changes

Entry	Year	Description	Impact
Revamping of SGSY to NRLM (later DAY-NRLM)	2011	The Swarnjayanti Gram Swarozgar Yojana (SGSY), launched in 1999, was the precursor to the National Rural Livelihoods Mission (NRLM). SGSY focused on providing self-employment opportunities to rural poor through SHGs and individual beneficiaries. It was revamped and renamed NRLM in 2011 (later Deendayal Antyodaya Yojana – National Rural Livelihoods Mission or DAY-NRLM in 2015) to adopt a more holistic, demand-driven approach, emphasizing universal social mobilization, financial inclusion, and sustainable livelihood promotion through strong institutional platforms of the poor.	This policy shift significantly scaled up the SHG movement, providing a more robust framework for capacity building, financial support, and market linkages. It moved beyond a mere credit-subsidy model to a comprehensive poverty alleviation strategy, focusing on building institutions of the poor and ensuring their long-term sustainability and empowerment.
RBI Guidelines for NBFC-MFIs	2011 (post-AP crisis)	Following the Andhra Pradesh microfinance crisis of 2010, the Reserve Bank of India (RBI) introduced comprehensive regulatory guidelines for Non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs). These guidelines addressed issues like interest rate caps, borrower protection, fair recovery practices, and multiple lending, aiming to prevent future crises and ensure responsible microfinance operations.	These regulations brought much-needed discipline and transparency to the MFI sector, safeguarding borrowers from predatory lending. While primarily targeting MFIs, they indirectly influenced the broader microfinance ecosystem, including SHG-linked lending, by promoting ethical practices and responsible credit delivery, thereby strengthening the overall credibility and sustainability of microfinance in India.
Expansion of Priority Sector Lending (PSL) norms for SHGs	Various, ongoing revisions	RBI periodically revises Priority Sector Lending (PSL) guidelines, which mandate commercial banks to lend a certain percentage of their Adjusted Net Bank Credit (ANBC) to specific sectors, including agriculture, MSMEs, and weaker sections. Over time, lending to SHGs has been explicitly included and emphasized within these weaker sections and agriculture categories, with specific targets and sub-targets.	The inclusion and emphasis on SHGs within PSL norms have significantly boosted bank credit flow to the SHG sector. It incentivizes banks to actively engage with SHGs, ensuring a steady and increasing supply of institutional credit, which is vital for the growth and expansion of SHG-led livelihoods and financial inclusion initiatives across the country.

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