DAY-NRLM SHG Loan 2026 – Tamil Nadu Women's Self Help Group Guide

👥 What is DAY-NRLM?

Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) promotes Self Help Groups (SHGs) for rural women. Through SHGs, women can access bank credit at subsidised interest rates (7% p.a. or lower) under the Interest Subvention Scheme, and individually borrow up to ₹3 lakh per member.

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Women Only

Rural SHG Members

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Up to ₹3 Lakh

Per SHG Member

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7% p.a.

Interest Rate (Subsidised)

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Rural Areas

Coverage

SHG Loan Progression — Bank Linkage

Phase 1 — Revolving Fund: SHG gets ₹15,000 to ₹30,000 from government as seed capital after 3–6 months of regular savings
Phase 2 — First Bank Loan: After 6 months of functioning, SHG borrows from bank at ratio of 1:1 or 1:2 (savings to loan)
Phase 3 — Repeat loans: SHGs with good repayment history can borrow 8–10 times their savings corpus
Individual member loans: Up to ₹3 lakh per member after SHG achieves Grade 1 status

Interest Subvention — Who Gets 7%?

All SHGs in 250 identified backward districts of India — interest charged at 7%, remaining subvented by govt
SHGs in all other districts including Tamil Nadu — banks can charge normal rate but better-performing SHGs often get lower rates
Tamil Nadu: Tamil Nadu Corporation for Development of Women (TNCDW) manages SHGs and provides additional state subvention
Prompt repayment earns additional 3% subvention in some states — effective rate can be 4%

Tamil Nadu Specific — Pudhumai Penn & TNSRLM

Tamil Nadu State Rural Livelihoods Mission (TNSRLM) manages DAY-NRLM in TN
Magalir Urimai Thogai (MUT): ₹1,000/month to SHG women under Pudhumai Penn scheme
Kalanjiam Community Banking Programme in Dharmapuri/Krishnagiri
Women can form new SHGs and join within 3–6 months to access loans

How to Join and Access Loans

Form or join an SHG

Contact your local Panchayat office or TNSRLM block office to join an existing SHG or form a new one with 10–20 rural women from the same village.

Regular savings

SHG members save ₹50–₹500 per week/month. This builds internal corpus for small emergency loans among members.

Grade the SHG

After 6 months, the SHG is graded by the bank or TNSRLM. Grade 1 SHGs qualify for bank loans immediately.

Apply for bank linkage loan

The SHG applies collectively to the bank. Guhan Capitals can connect you with the right bank for faster SHG loan processing.

Access individual MSME loans

Once your SHG has strong repayment history, individual members can access MSME loans, Mudra loans, and other schemes with SHG as reference.

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Frequently Asked Questions

How do I form an SHG in Tamil Nadu?▼

Contact your Village Panchayat, Block Development Office, or TNSRLM district office. You need 10–20 women from the same village (not close relatives) who meet regularly, save collectively, and manage funds as a group.

What is the loan amount per SHG member?▼

It varies by SHG grade and bank policy. Typically ₹50,000–₹1 lakh for early-stage SHGs, scaling to ₹3 lakh per member for Grade 1 SHGs with clean repayment history.

Can urban women also access SHG loans?▼

Urban women can form SHGs under DAY-NULM (National Urban Livelihoods Mission) for urban areas. The structure is similar. Contact your city's Municipal Corporation for DAY-NULM SHG formation.

Is Guhan Capitals able to help with SHG bank linkage?▼

Yes. We work with SHGs to connect them with our partner banks who are active in SHG lending. We also help SHG members access individual Mudra and CGTMSE loans.