Bihar self-help groups raise the most loans but Andhra tops in loan quality

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Bihar self-help groups raise the most loans but Andhra tops in loan quality
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  • Farm incomes grew between 1.3-1.7 times in FY22, non-farm income grew between 1.4-1.8 times, according to a SBI report.
  • SHGs are entities, which usually have a membership of 15 to 20 members from very low income families, usually women.
  • A total of eight lakh fresh SHGs were financed in FY22 – with Bihar taking the biggest share.
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Self-help groups (SHGs) are not just providing economic independence to rural women, but also contributing heavily to the growing non-farm incomes across the country.

While farm incomes grew between 1.3-1.7 times in FY22, non-farm income grew between 1.4-1.8 times, according to a Special Report on Agriculture by SBI. Rural women and their cottage industries, allied agricultural businesses and petty trade help generate large-scale employment for rural Indians who engage in the seasonal trade of agriculture.

“SHGs, crucial in imbibing an entrepreneurial spirit among farmers at the lower band of the spectrum, in particular women, have a high concentration in select states and within those states also they remain confined to certain districts though their performance in aspirational districts of NITI Aayog has been noticeable of late,” says a Special Report on Agriculture by SBI.

SHGs are entities, which usually have a membership of 15 to 20 members from very low income families, usually women. They mobilise savings from members and use the pooled funds to give loans to the needy members.

Andhra, Telangana rank higher


A total of eight lakh fresh SHGs were financed in FY22 – with Bihar taking the biggest share. Amaravati and Telangana districts together account for a majority of SHG finance.

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Of the total SHG financing in the country, 18% outstanding belongs to the 124 aspirational districts.

Launched in January 2018, the Aspirational Districts programme aims to quickly and effectively transform 112 most under-developed districts across the country.

“Aspirational districts programme…has been a ‘huge success’ in just a period of four years at least in respect of SHG financing,” says the SBI report.

This concentration, however, is very high in states like Karnataka, where the top five districts accounted for 83% of total SHG financing of the State.

Similarly, the top five districts in Andhra Pradesh and Tamil Nadu accounted for more than 50% share — all indicating that while a change is afoot, it’s not evenly distributed across the regions of this vast country.

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UP, Haryana and Punjab have the worst credit quality



In terms of credit quality, Uttar Pradesh, Haryana and Punjab rank the lowest — with a high non-performing assets ratio (NPA) of over 25%, according to SBI’s Special Report on Agriculture.

Bihar self-help groups raise the most loans but Andhra tops in loan quality

Arunachal Pradesh and Tripura, with an NPA ratio of 19 and 18 respectively, are also part of the list of worst NPA states. Andhra Pradesh, however, is the best performing state with an NPA ratio of 0.8.

NPA ratio is calculated by dividing non performing assets by total loans given.

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