State Interest Subvention Initiative: Strategizing Financial Future of Women SHGs in Odisha

Bhubaneswar: Maa Narayani Self-Help Group (SHG) of Panapali village, Kujanga block, Jagatsinghpur district, recipient of ‘Best SHG of the District Award – 2019-20’, has been a source of inspiration for women farmers of the State of Odisha state.
Cultivation of vegetables and dairy farming on commercial scale have earned this SHG the recognition of a progressive women farmers’ collective. Ten women ofthis village, under the fold of a SHG, promoted vegetable cultivation on commercial scaletaking up collective marketing of agricultural produce to fetch a
better price in the local market. Sharing her experience, Ms. Sulochana Swain of MaaNarayani SHG says ‘’Capacity building and access to credit were the major hurdles when we decided to cultivate vegetables and undertake dairy farming.
After the group formation under Mission Shakti, we received training and had our first bank credit linkage. We have been undertaking dairy farming since2009
and supplying 150 litres of milk to a Milk Processing Unit everyday. We have availed bank credit linkage 8 times till date. We were thrilled to receive ₹15,824/-as interest subvention in our savings bank account. Loans at zero interest really help women like us to procure additional seeds and other
agricultural inputs and increase area under cultivation by our SHG. This is the biggest help we have got from the State Government. Earlier we would have spent many months and years repaying the loan and interest amount. Some of us
would also go to micro finance institutions and would have taken loans at very high interest’’.
Government of Odisha launched the Mission Shakti initiative in 2001 aiming at holistic empowerment of women. To create a class of grassroot women leaders across the state both in rural and urban sectors – Odisha’s Mission Shakti does not see economic empowerment of women as a part of mission. It is one
part of the overall empowerment agenda. Mission Shakti gives a powerful platform to women at grass root level women – making their voices heard.
The Financial Inclusion programme undertaken by Mission Shakti has been very successful in catering to several aspects of economic empowerment of 70 lakh women in 6 lakh Mission Shakti SHGs. It has provided access to financial
literacy, bank credit linkage and interest subvention. During the financial year 2019-20, bank credit amounting to ₹ 2307.93 crore has been provided to over  1.5 lakh SHGs. An amount of ₹ 644 crore as bank credit linkage to 41,355 SHGs and ₹ 25.23 crore as interest subvention for1,61,822 SHGs have been disbursed
during the COVID pandemic.
In recognition of women members’ efforts towards entrepreneurship at SHG level, the State Government announced the Interest Subvention Scheme for womenSHGs with effect from 1st April 2013, making the effective annual rate of
interest as 2% for loans upto ₹ 3 lakh. The provision of interest subvention to women SHGs covers the interest burden for loans upto ₹ 3 lakh per SHG on prompt and regular repayment. Subsequently, considering the growth in credit off take of SHGs, in order to reduce the interest burden and to encourage SHGs to
invest more capital in livelihood activities, Odisha approved interest free loans to women SHGs. ‘Mission Shakti Loans’ are now given at 0% annual rate of interest, for loans up to ₹ 3 lakh on prompt and regular repayment. The Directorate of
Mission Shakti acts as the nodal agency for SHG interest subvention programme in the state.It has been provisioned by Mission Shakti to reimburse the interest subvention amount to the savings bank account of the SHG instead of the SHG
loan account.
“Hassle-free bank credit facility from the local bank along with sanction of a GP tank of 7-acre water area on long-term lease by the block administration, has enabled us undertake pisciculture. We have already availed loan from the bank thrice for fish farming. The interest subvention amount of ₹ 5,260/-to our
bank account has supported our SHG members scale up pisciculture gradually.
We have harvested nearly 600 kgs of fish during the Covid-19 lockdown period supporting nutrition security of our region while generating additional income for our SHG members. We are very much delighted to be part of the Mission Shakti movement in the state.” – MadhuriMaharana, President of MaaAmbika SHG, Beguniapada, Ganjam.
This innovative initiative not only promotes sustainable banking practices among SHGs but also rewards the responsible loan repaying SHGs with proportionate reimbursement of interest making the effective bank credit annual rate of interest 0%. The interest burden leveraged, acts as a catalyst for SHGs towards taking up new challenges for setting up / scaling up enterprises thereby further strengthening local economy, contributing more to state GDP and generating more employment opportunities locally. Non-imposition of restriction on the number of times a SHG can avail the benefit of interest subvention, encourages enterprising SHGs to repay loan as per the bank recommended repayment schedule and take up further credit to expand their operations.
Government has taken necessary steps towards integrating online digital solutions to bolster the ‘Mission Shakti Loan’ implementation process. For data sharing with banks through a state-of-the-art Management Information System
(MIS), the Government is going to sign MoU with banks shortly.

The influence of interest subvention on nano
because of the scale of investment and profitability.
MaaMangala SHG, Niali, Cuttack district, the group has periodically received interest subvention amount in its bank account against prompt and regular repayment of a loan amount of farm. As mentioned by Ms. JilliBehera, Secretary of this SHG, the reimbursed amount of Rs 6,892/-under interest subvention has enabled the group procure additional farm equipment and feed thereby maximising economic returns.
Interest subvention claim have already been settled
reimbursement of interest paid against bank loans.
Figure. 1 Settlement of claims under the State Interest Subvention Sch ‘Mission Shakti Loan’ The social capital of SHGs could be an asset for expediting socioeconomic
development. The current initiatives of Mission Shakti have played a crucial role in strategizing financial future of women SHGs in Odisha. Women SHGs torchbearers of a new financial revolution in Odisha are no longer a distant dream because of a dedicated approach of the State Government committed for
women empowerment in the state.
The influence of interest subvention on nano-enterprises is more evident because of the scale of investment and profitability. As obvious in case of MaaMangala SHG, Niali, Cuttack district, the group has periodically received interest subvention amount in its bank account against prompt and regular ment of a loan amount of ₹ 3 lakhavailed towards establishing a poultry
farm. As mentioned by Ms. JilliBehera, Secretary of this SHG, the reimbursed under interest subvention has enabled the group procure additional farm equipment and feed thereby maximising economic returns.
bvention claims amounting to ₹ 180 crore (cumulative figure)
have already been settled benefitting more than 4 lakh SHGs towards reimbursement of interest paid against bank loans.
Figure. 1 Settlement of claims under the State Interest Subvention Sch The social capital of SHGs could be an asset for expediting socioeconomic development. The current initiatives of Mission Shakti have played a crucial role in strategizing financial future of women SHGs in Odisha. Women SHGs torchbearers of a new financial revolution in Odisha are no longer a distant dream because of a dedicated approach of the State Government committed for women empowerment in the state.