“Uttar Pradesh’s new funding plan aims to bolster women’s self-help groups (SHGs) with enhanced financial support, targeting economic empowerment and rural development. The initiative focuses on increasing loan access, skill development, and market linkages for over 14 lakh SHGs, impacting millions of women. It aligns with national schemes like NRLM to drive financial inclusion and entrepreneurship.”
Uttar Pradesh Boosts Women’s SHGs with New Financial Support Scheme
Enhanced Loan Access: The Uttar Pradesh government has introduced a new funding plan under the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) to provide collateral-free loans of up to ₹20 lakh for women’s self-help groups (SHGs). As of November 2024, SHGs in UP have leveraged bank credit worth ₹9.71 lakh crore, with the new plan aiming to further increase loan disbursals by streamlining access through the SHG-Bank Linkage Programme (SHG-BLP). This initiative builds on the success of SHGs, which have a repayment rate exceeding 96%, showcasing their credit discipline.
Scale and Impact: Uttar Pradesh hosts over 14 lakh SHGs, engaging approximately 1.5 crore women, making it one of India’s largest SHG networks. The new funding plan targets supporting these groups to establish sustainable enterprises, with a goal to increase each SHG’s annual income to ₹1 lakh by 2026. This aligns with national efforts to transform SHGs into large-scale producer collectives, as highlighted in the Economic Survey 2022-23.
Skill Development and Training: The state government is collaborating with institutions to offer training in financial management, entrepreneurship, and digital literacy. As of October 2024, DAY-NRLM has supported 1,35,127 Banking Correspondent Sakhis in UP to enhance financial inclusion. The new plan includes capacity-building programs to equip women with skills in high-demand sectors like agriculture, handicrafts, and food processing.
Market Linkages and Entrepreneurship: The funding scheme emphasizes connecting SHGs to larger markets through initiatives like the Start-up Village Entrepreneurship Programme (SVEP), which has supported 3.13 lakh rural enterprises as of October 2024. The plan encourages SHGs to form producer groups and cooperatives, enabling them to tap into global markets, as praised by Prime Minister Narendra Modi in his 2025 Independence Day speech.
Community Investment Fund: The new plan enhances the Community Investment Fund (CIF), providing up to ₹50,000 annually per SHG for designing local livelihood programs. As of November 2024, ₹48,290 crore has been disbursed as capitalization support to SHGs in UP, fostering financial stability and enabling women to start micro-enterprises like tailoring units and livestock rearing.
Social Empowerment: Beyond economic benefits, the initiative promotes social cohesion by addressing issues like gender-based violence and child marriage through SHG-led awareness campaigns. SHGs in UP are integrated into Gram Panchayat Development Plans, ensuring their role in local governance and social justice, as noted in the Ministry of Rural Development’s 2023 updates.
Challenges and Future Goals: Despite their success, SHGs face challenges like limited financial literacy and dependence on external agencies. The new funding plan aims to address these by introducing dedicated grievance mechanisms and fostering self-reliance. The state targets forming an additional 1 lakh SHGs by 2026, inspired by successful models like Bihar’s Jeevika programme, which supports over 1.2 crore women.
Disclaimer: This article is based on recent reports, government announcements, and data from sources like the Ministry of Rural Development, DAY-NRLM, and media outlets such as The Hindu and Economic Times. Information is accurate as of September 2025, but readers are advised to verify details with official government portals for the latest updates.