Rakesh Magotra, Dr Shubra Sharma
A cold morning in a remote village of Kupwara, a group of women gathers in a small community hall. The air is filled with chatter-some discussing their earnings from dairy farming, others planning how to expand their embroidery business. At the center of it all is Shabnam(Name changed), a mother of three, who not long ago struggled to make ends meet. Today, she confidently talks about her latest bulk order of embroidered shawls, secured through a loan facilitated under the UMEED scheme. “Earlier, if we needed money, we had to rely on moneylenders who charged exorbitant interest. Now, we go to the bank. We have accounts, we have savings, and we have dignity,” she says with pride.
Shabnam’sstory is not unique. Across Jammu & Kashmir, thousands of women are rewriting their destinies through the Self-Help Group (SHG) Bank Linkage Program under the UMEED initiative. This flagship scheme, implemented by the Jammu & Kashmir Rural Livelihoods Mission (JKRLM), has given women the financial agency they were long denied. In a region where women’s access to formal credit was once negligible, SHG-bank linkage has enabled them to transition from being credit-invisible to becoming bankable entrepreneurs with a formal credit history.
Financial inclusion is more than just opening of bank accounts and access to credit-it is about transforming lives. For decades, rural women in J&K struggled with limited financial independence. Lack of collateral, minimal financial literacyand systemic biases meant that banks remained an institution they seldom engaged with. UMEED has changed this landscape by creating a structured approach that brings together banks, government agencies and community-based organizations to extend financial support to women-led SHGs.
The program’s model is simple yet powerful. Women form SHGs, pool their savings and gradually become eligible for financial assistance. Initially, they receive a Revolving Fund that allows them to manage small credit needs internally. As the group builds a financial track record, it gains eligibility for formal bank credit. This phased approach ensures that by the time they seek loans, they have cultivated financial discipline and repayment ethics, making them credit worthy borrowers.
What makes this initiative particularly effective is the multi-stakeholder involvement. JKRLM plays a crucial role in mobilizing and training women, helping them navigate financial procedures and ensuring credit discipline. Banks, particularly J&K Bank as the lead institution, have recognized the potential of SHGs as reliable borrowers. With interest subvention schemes and credit guarantees backed by the government, the risk perception of lending to SHGs has significantly reduced. The National Bank for Agriculture and Rural Development (NABARD) has also been instrumental in promoting financial literacy and facilitating banking correspondents in rural areas, ensuring seamless credit access.
Beyond just loans, the program nurtures a credit culture among rural women. These women, who were once excluded from the formal financial system, now have credit histories. Their SHG transactions are recorded, repayments are tracked and over time, they become eligible for larger loans without collateral. This transition from being unbanked to financially independent entrepreneurs is perhaps the most remarkable success of the SHG-bank linkage model.
Take the case of Jyoti (name changed), a resident of remote village in Mathwar Block in Jammu. A few years ago, she was a homemaker dependent on her husband’s irregular income. With no financial assets of her own, securing a loan seemed impossible. Joining an SHG under UMEED changed everything. The group first granted her a small loan from their pooled savings, which she used to start a Parlour and retailing of cosmetics. Encouraged by her initial success, she later secured a formal bank loan, expanded her business and now employs two girls. “The bank once seemed like a place meant for men in suits. Now, it’s where I go to grow my business,” she says with a smile.
The success of the program is reflected in numbers as well. Over the years, thousands of SHGs in J&K have accessed bank credit, with repayment rates significantly higher than other lending portfolios. The sense of collective responsibility within SHGs ensures that defaults are rare, as members support one another in maintaining financial discipline. This trust between banks and SHGs has further strengthened the system, encouraging banks to sanction loans more efficiently.
While financial empowerment is at the core of the initiative, its impact extends far beyond money. Women who were once confined to their homes are now confident entrepreneurs, decision-makers and community leaders. The additional income has improved household nutrition, facilitated better education for children and reduced dependency on exploitative informal lenders. Importantly, financial independence has given these women a voice in societal and familial matters, shifting gender dynamics in rural communities.
Despite its successes, challenges remain. Some SHGs face delays in loan processing due to bureaucratic hurdles. Financial literacy levels, though improving, still need to be strengthened to ensure that women fully understand loan terms, interest rates and digital banking. Additionally, while UMEED has facilitated substantial bank linkages, there is potential for expansion-integrating technology-driven financial solutions, easing documentation processes and increasing engagement with private financial institutions could further enhance outreach.
To build upon this momentum, all stakeholders must continue their collaborative efforts. Banks should streamline loan disbursement procedures and invest in digital financial literacy programs. Government agencies should reinforce credit guarantees to encourage higher loan sanctions. Community leaders and NGOs must work at the grassroots level to motivate more women to join SHGs. The private sector, too, has a role to play-by partnering with SHGs for supply chains, skill development, and market linkages, corporations can contribute to the ecosystem while fulfilling their social responsibility.
A landmark moment in this journey of financial empowerment was witnessed on International Women’s Day, March 8, 2025, when banks across Jammu & Kashmir sanctioned ?100 crores in loans to Self-Help Groups (SHGs) on single day under the UMEED initiative. This massive credit infusion was not just a symbolic gesture but a testament to the unwavering commitment of the administration to uplift rural women. The Chief Secretary of J&K UT, through the forum of UT-Level Bankers’ Committee (UTLBC), played a pivotal role in driving this initiative with a passionate vision for women-led economic transformation. By pushing for financial inclusion at the grassroots level, the Chief Secretary has set a new benchmark in governance, reinforcing that empowering woman financially is the key to building a more resilient, self-reliant and prosperous Jammu & Kashmir.
(Rakesh Magotra is DGM in JK Bank and Dr Shubra Sharma is Mission Director JKRLM.)
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