Microfinance and SHGs — Prelims Strategy

Prelims Strategy

Focus on memorizing specific data points: 12+ million SHGs, 130 million members, 1992 launch year of bank linkage programme. Master the operational mechanics: 3-6 months savings requirement, 1-4x savings loan ratio, joint liability principle.

Understand institutional roles clearly: NABARD (refinance, guidelines), RBI (MFI regulation), banks (direct lending). Pay special attention to the Andhra Pradesh crisis timeline and causes - this appears frequently in different forms.

Learn the regulatory framework evolution, especially post-2010 changes and 2022 RBI guideline updates. Practice elimination techniques by understanding what each institution does NOT do (e.g., NABARD doesn't directly lend to individuals, RBI doesn't regulate SHGs directly).

Create mental maps linking microfinance with related topics like Jan Dhan Yojana, digital payments, and women empowerment schemes. Focus on recent developments in digital microfinance and JAM integration as these are emerging question areas.