AP Eases SHG Loan Norms, Lowers Membership Threshold from 10 to 8

The Andhra Pradesh government has announced a relief measure for women members of Self-Help Groups (SHGs), allowing eligible groups with fewer than 10 members to access repeat-dose loans under specified conditions.

The relaxation, introduced by AP Grameena Bank, is aimed at helping SHGs whose membership has fallen below the 10-member threshold due to the death or migration of members. Minister for MSMEs, Rural Poverty Alleviation and NRI Empowerment Relations Kondapalli Srinivas welcomed the decision, saying it would ensure that genuine and financially disciplined groups are not denied continued access to institutional credit because of temporary changes in membership.

Under Internal Order No. 152, SHGs with a minimum of eight active members can now qualify for repeat-dose loans, provided they satisfy the prescribed conditions. The move addresses a long-standing difficulty faced by rural groups that continued functioning normally but became ineligible for subsequent credit after their membership dropped below 10.

The relaxation, however, comes with safeguards. The reduction in membership must have occurred only because of death or migration, while the group must remain free from irregularities. It should also have a satisfactory repayment history, with no outstanding dues from earlier loans. Eligible groups will be required to pass a special resolution and submit a responsibility undertaking while applying for the repeat credit facility.

Groups benefiting from the relaxation will also have to restore their membership to at least 10 members within six months. The condition is intended to ensure that the temporary concession does not become a permanent departure from the prescribed group structure.

The decision is significant for rural women who depend on SHGs for access to formal credit and livelihood opportunities. Interruptions in bank finance can affect activities ranging from small businesses and livestock rearing to other income-generating ventures. Ensuring continuity of credit can therefore help financially sound groups sustain and expand their economic activities.

Srinivas said loans to women should not be viewed merely as financial assistance, but as an instrument for strengthening livelihoods, self-employment and economic empowerment. He said the government's broader objective was to strengthen women's groups and promote an entrepreneurial culture at the household level.

The minister also urged the State Level Bankers' Committee (SLBC) and other banks in Andhra Pradesh to consider similar flexibility for SHGs with strong repayment records. He said well-performing groups should not face unnecessary hurdles in renewing credit solely because of temporary membership shortages.