Finance minister Arun Jaitley on Tuesday called on banks and financial institutions like Nabard to further improve lending to the unorganised sector to boost job creation. Addressing an event organised by the Nabard, Jaitley said, “It is a fact that people in the unorganised sector are much higher than the organised sector, but the former gets credit with a lot of difficulty.” The unorganised sector makes up for a roughly 45% of the country’s GDP but around 80% of employment. Still, much of the lending by banks goes to the organised sector.
“If the resources of banks and financial institutions through various schemes are diverted towards this (unorganised) sector, it will help create more employment,” the finance minister said.
Jaitley stressed the performance of self-help groups (SHGs) and said they have helped generate lakhs of jobs in rural areas. Also, since most of the SHGs involve women in a big way, these have helped give a sense of financial security to rural women, Jaitley said. Nabard’s SHG movement, which started 25 years ago with very few entities, has now exceeded the 85-lakh mark.
Department of financial services secretary Anjuly Chib Duggal stressed on the positive impact a synergy between Nabard and Sidbi can bring about in occupational and entrepreneurial training besides financial literacy and market outreach among these self-help groups.
The Self Help Group Bank Linkage Programme run by Nabard has helped poor women source collateral-free loans of Rs 61,000 crore from the banking system. Since its pilot stage in 1992, the SHG programme has come a long way in covering more than 10 crore rural families.