Indian & World Geography·Policy Changes
Microfinance and SHGs — Policy Changes
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Version 1Updated 7 Mar 2026
| Entry | Year | Description | Impact |
|---|---|---|---|
| RBI Circular DNBR.PD.007/03.10.119/2011-12 | 2011 | Following the Malegam Committee recommendations and the Andhra Pradesh crisis, RBI issued comprehensive regulatory guidelines for NBFC-MFIs. These included a definition of microfinance loans, qualifying asset criteria, interest rate caps (later revised), and a Fair Practices Code. | Significantly formalized and regulated the NBFC-MFI sector, bringing much-needed discipline, transparency, and borrower protection. It curbed aggressive lending practices and laid the foundation for responsible microfinance operations. |
| RBI Circular DOR.FIN.REC.No.86/03.10.001/2021-22 | 2022 | Introduced the 'Harmonized Regulatory Framework for Microfinance', applicable to all regulated entities (REs) involved in microfinance lending. Key changes included removal of interest rate caps for NBFC-MFIs, revised household income limits (up to Rs. 3 lakh), and a focus on a board-approved fair pricing policy. | Created a level playing field across different types of microfinance lenders, promoted responsible pricing based on market dynamics, and strengthened borrower protection through enhanced transparency and grievance redressal mechanisms. It marked a significant evolution in microfinance regulation in India. |
| DAY-NRLM Guidelines Revision | Ongoing (e.g., 2015, 2019, 2022) | The Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) guidelines are periodically revised to enhance its effectiveness. Revisions often focus on increasing financial support (e.g., Revolving Fund, Community Investment Fund), strengthening livelihood diversification, and improving digital integration for SHGs. | Continuously strengthens the SHG movement by providing greater financial resources, better capacity building, and improved market linkages. These revisions aim to make SHGs more self-reliant and sustainable, contributing significantly to rural development programs [VY:ECO-09-02] and women empowerment schemes [VY:SOC-04-03]. |