The Kudumbashree Story

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Micro Finance

The micro finance programme has developed from the foundation of the thrift and credit scheme of the Neighbourhood Groups. By June 2015, the Kudumbashree community network had a cumulative savings of Rs 3145.18 crore in its 2,60,252 Neighbourhood Groups (NHGs) spread across 1072 Community Development Societies (CDSs). The cumulative internal loans were at Rs 12,662.33 crore. In all 1,68,059 NHGs were bank-linked and had availed bank loan at least once. NHGs continuing with bank linkage were 1,56,295. The community network had an outstanding bank loan of 3,115.69 crore as of March 2015.

Kudumbashree Micro Finance: Status in March 2015

Total Savings (Cumulative) (Rs. Crore)


Total Cumulative Internal Loans (Rs. Crore)


Total Cumulative Bank Linkage (Rs. Crore)


# NHG bank Linked at least once


# NHG Bank Linked Current


Outstanding NHG Bank Loan as of March 2015

(Rs. Crore)


The State Mission has a Micro Finance Team headed by a Team Leader. At the district level, Assistant Mission Coordinators lead the micro finance team.

Roles in Micro Finance

  • NHG: Management of the thrift and credit programme including internal lending and account keeping, grading, bank linkage
  • ADS: Monitoring the thrift and credit programmes of NHGs, facilitation of bank linkage
  • CDS: Monitoring of thrift and credit; facilitating bank linkages; payment of matching grant to bank-linked NHGs; updating management information system
  • District Mission: District Missions approve and release matching grant to CDSs. It is also responsible for liaison with district level review committee of banks. District Missions conduct capacity building programmes too.

Liaison with State Level Bankers Committee (SLBC) is the responsibility of the State Mission. State Mission monitors the micro finance programme at the state level through the management information system. It designs programmes and schemes and does capacity building.

State Mission’s Schemes

  • Matching Grant: This is an incentive scheme for NHGs that establish bank linkage by qualifying in the grading system. The quantum of grant is linked to the total accumulated savings of the NHGs. The incentive is calculated as Rs 5000 per NHG or 10% of the total savings, whichever is less.
  • Interest Subsidy: Under this scheme supported by the Government of Kerala, the State Mission provides 5% interest subsidy on bank loans to NHGs; Joint Liability Groups (JLGs) running enterprises are also eligible for interest subsidy.
  • Education and Campaigns: Mission conducted an accounting and audit campaign in 2009 for improving systems of micro finance across the state. It also conducts education programmes for financial literacy and for improving the management of NHGs.

Revolving Fund under NRLM

  • There is a revolving fund (RF) available under NRLM, which Kudumbashree Mission administers through the community network. Qualifying NHGs are eligible for Rs 15,000 as one-time support. The NHGs can keep it as part of their corpus fund and use it as a revolving fund.