Telangana Doubles Interest-Free Loan Cap for Women's Self-Help Groups

Hyderabad — In a significant move to strengthen women's economic participation, the Telangana government has raised the Vaddi-Leni-Runalu (VLR) limit for women Self-Help Groups to Rs 10 lakh, double the previous ceiling of Rs 5 lakh. Panchayat Raj and Rural Development Minister Danasari Anasuya Seethakka made the announcement on Thursday while unveiling the SHG Bank Linkage Programme Annual Action Plan 2026-27 at Praja Bhavan.

The decision is expected to extend benefits to approximately 63 lakh women participating in SHGs across Telangana. The enhanced limit seeks to bolster the borrowing capacity of women's collectives throughout the state, enabling them to undertake larger economic ventures.

The government will shoulder the interest burden on bank loans accessed by SHGs up to the Rs 10 lakh threshold. Officials estimate the revised scheme will necessitate approximately Rs 2,500 crore in interest payments annually, compared to the current expenditure of roughly Rs 1,300 crore.

For the financial year 2026-27, the state has set an ambitious target of channeling Rs 26,621.47 crore through bank linkage loans to SHGs. In the preceding year, women's groups had accessed loans amounting to Rs 25,228.89 crore.

The announcement was made during a gathering that included Special Chief Secretary Dana Kishore, SERP Chief Executive Officer Divya Devarajan, representatives from nationalised banks, district federation leaders, and SHG members. The Minister subsequently recognized district officials and federation heads for their contributions to loan distribution and recovery efforts.

Seethakka highlighted that the government had initially aimed for Rs 40,000 crore in bank linkage loans over a two-year period but had already surpassed this target, achieving nearly Rs 60,000 crore with the collaborative efforts of banking institutions and SHGs.

Speaking to assembled bankers and women representatives, the Minister emphasized that the state government, under Chief Minister A. Revanth Reddy, operates with the vision that "women's progress is Telangana's progress." She articulated the government's objective to transform one crore women into crorepathis.

Seethakka noted the transformation in women's access to credit, recalling that women previously faced significant obstacles in securing even modest loans. Today, banks confidently extend loans in the lakh range to women's groups. She attributed this progress to the strong repayment discipline demonstrated by SHGs, pointing out that the non-performing asset rate among women's groups remains at merely 1.4 per cent.

The Minister particularly lauded Nirmal district for achieving zero NPA status, describing it as a noteworthy accomplishment. She called upon other districts to emulate this model while acknowledging the efforts of district officials and federation representatives.

Drawing on historical context, Seethakka reflected on exploitative moneylending practices that had influenced her earlier life choices. She underscored that the government's initiative to strengthen institutional credit access through banking channels aims to shield economically vulnerable families from predatory lending practices.

"As the government provides guarantees, loans offered to women's groups carry safety and security. While individuals may default, institutions such as Mahila Shakti uphold trust," the Minister stated, urging bankers to continue supporting women's collectives.

The Minister further noted that women have become significant employment generators through the Indira Mahila Shakti initiative. SHG members are successfully operating diverse enterprises including canteens, buses, dairy units, petrol pumps, solar installations, Mahila Marts, and warehouses.

Seethakka concluded by asserting that "strong women mean a strong economy," emphasizing that women's economic empowerment would strengthen households and contribute to Telangana's overall development. She additionally announced plans to encourage SHG women to establish retail outlets during the forthcoming Pushkaralu festivities.