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Home Personal Finance Big news for Self Help Groups! Now collateral will not be needed...

Big news for Self Help Groups! Now collateral will not be needed in loans up to Rs 20 lakh

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Collateral Free Loans: There is good news for Self Help Groups. Government of India has decided to increase the collateral free loan for SHGs from Rs 10 lakh to Rs 20 lakh under Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) to promote Self Help Groups (SHGs).Also Read: PM Kisan 9th Installment: These people will not get PM Kisan’s installment, read full news




The Reserve Bank of India (RBI) has informed public, private and small finance banks regarding the enhancement of collateral free loans for SHGs through a letter.

The Department of Financial Services gave this notification through its official Twitter handle. The Department of Financial Services said in a tweet, “No collateral is now required for loans between Rs 10 lakh and Rs 20 lakh to Self Help Groups (SHGs). Amendment to the Credit Guarantee Fund for Micro Units (CGFMU) Scheme has been notified.Also Read: Jio Recharge: Get calls and internet in less than Rs 100 recharge, know all the benefits




This decision of the government is an amendment to the master circular dated April 1, 2021. No collateral should be taken from SHGs for loans between Rs 10 lakh to Rs 20 lakh and there should be no lien against the savings bank account of the SHG. However, the entire loan (irrespective of the outstanding loan, even if the latter is less than Rs 10 lakh) will be eligible for coverage under Credit Fund for Micro Units (CGFMU).

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