Self Help groups (SHG) (Cash credit limit upto Rs.20.00 lakh) Qorus-Infosys Finacle Banking Innovation Awards 2025- Nominated

The objective of the SHG finance is to meet the credit needs of the poor, build mutual trust and confidence between Bank and rural poor, enabling additional employment generations and facilitating woman empowerment. Union Bank of India has come up with Digitization of Self-Help Group Lending. The product has following unique features: • Journey for Fresh linkage, Enhancement and Renewal of SHG loans. • Loans up to Rs 20.00 Lakh to SHG’s for meeting their productive and emergent credit needs from common corpus. • Automation of Balance sheet preparation and other records/ books maintained by SHG’s • Creation of repository for historical data of SHGs in digital form. • Primary Security is hypothecation of asset created out of Bank finance. • Collateral Security upto Rs.20.00 lakhs- Nil • Digitally enabled Bank statement analysis for SHGs. • Automated grading and scoring of SHG. • Digital on-boarding of SHG. • Branch official/BC can initiate the journey at SHG place. • Digital assessment of loan limits and prefilled security documents, sanction letter and application form. • Improved TAT for approval of loan. • Streamlining and standardization Bank process.

The product has led to the creation of following: • Developed an Eco System for enabling SHG loans to Self Help groups (comprise of women, persons with disabilities and other special categories like elders and transgenders) through Digital platform • Creation of data repository of SHG portfolio of the Bank covering each member of the SHGs. Business Need for the Initiative:

Our Bank is having a portfolio of about 4.06 lakh SHG accounts (upto Rs.20.00 lakh) of Rs.30,651 crore as of 30.06.2024, considering which we foresee a huge benefit to Bank in terms of manpower saving with this going live PAN India. The SHG a/cs with Banks covers around 40 lakh SHG members. Now with digital footprint available for these members, bank can effectively utilize the data for extending credit facility/ cross selling to these members. As per the report of Ministry of Rural Development, as on 31.01.2025, there are 90.90 lakh SHGs are operational in India, reflects the untapped business opportunity for Bank. Digitization of the journey will help SHG to reach the financial ecosystem without many efforts and will bridge the financial gap. Offering the credit flow to SHG through digital journey will improve the financial inclusion, priority sector lending and overall Bank business.

Opportunities for the initiative: Almost 100% of the SHG financing needs will be met through Digitization of SHG loan

Problems address by this initiative:

Problem Statement for SHGs: • Manual submission of loan application • Multiple Bank Branch visits • Maintaining historical data of Panchsutra • Elongated turnaround time of more than 15 days

Challenges for Bank: • No historical data or poorly maintained data of Panchsutras of SHG • The collection of data of Panchsutras from SHGs and assessment of grading/scoring and sanctioning of loan manually is time consuming. • Analysis of the Bank statement manually is time consuming. • Manual maintenance of the SHG data and their financials. • Process needed to be standardized.

Drivers of the Initiatives

• Most of the rural and semi urban population have account with financial institutions, identity ID (Aadhaar) and access to internet through mobile. • SHG loans to Self Help groups (comprise of women, with persons with disabilities and other special categories like elders and transgenders) through Digital platform. • Bank has a portfolio of 4.06 lakh SHGs accounts. The credit linkage under these accounts was a time taking process. The manual process adopted by the Branch was also needed to be streamline.