HYDERABAD: As part of his efforts for establishment of an exclusive bank for extending credit facility to the IKP (Indira Kranthi Patham) groups, chief minister N Kiran Kumar Reddy on Sunday requested Union finance minister Pranab Mukherjee to operationalise an SHG (Self-Help Group) development fund in the state.He thanked the minister for his announcement in the Union budget for 2011-12 on establishing an SHG development fund. "Andhra Pradesh is rightly the 'Home of SHG movement' in the country," he claimed.Reddy, in a letter addressed to Mukherjee, requested him to convey the Union government's concurrence for equity contribution of ` 100 crore for SHG development. AP has become a role model in organising the rural poor into SHGs. All the SHGs are linked to banks for meeting their financial needs. “As SHGs are facing considerable credit gap, many unscrupulous micro finance institutions have been lending at usurious rates of interest. In this context, the need for establishing a new financial entity which can operate at low costs through the SHG network to provide niche lending to the SHGs has emerged,'' he added.Explaining the features of the proposed NBFC (non-banking finance company), providing credit limits to Mandal Samakhyas, having an authorised capital of ` 500 crore and a paid-up capital of ` 350 crore in the initial year, the CM requested the union finance minister to permit Andhra Bank, SBH and NABARD to be the main promoters of the NBFC.
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