The AP state Cabinet on Tuesday approved the proposal to establish Apex Cooperative Bank for women self-help groups (SHGs) in the State.The bank is expected to be formally launched next month.
The bank will be set up with the existing mandal samakhyas (federations of SHGs at mandal level) as its lending arms, thus bringing the vast SHG network into its fold.
Though the government had initially worked on the idea of forming a non-banking financial company (NBFC) in collaboration with public sector banks, it had to opt for the cooperative format as bankers informed about certain regulatory constraints in joining the NBFC, according to a senior government official.
It is also designed to extensively leverage modern technology for loan transactions in such a way that a loan is sanctioned within 48 hours, according to government officials.
There are about 950,000 SHGs in the state, federated at the village level as village organisations (VOs). These VOs, in turn, are federated at mandal(administrative unit above the village level) mahila samakhyas (MMS), representing almost 10 million women members. The MMS, which have been involved in lending to SHGs for the past two years, currently handle Rs 7,000 crore business.
Courtsey-BS