Models linking community-based associations with financial institutions have tremendous potential to expand outreach in remote areas. Associations in many forms (self-help groups, savings and credit associations) already have a strong presence in rural areas. They generally provide convenient access for members who have few or no alternatives. Linkages can provide these associations with access to liquidity exchange, safety for savings and the potential for a broader range of services, even graduation to individual services. The self-help group bank-linkage model in India is known to be one of the fastest-growing microfinance programmes in the world. Self-help groups are informal thrift and credit groups of the poor that came to be recognized as bank clients under the pilot project. Starting with 500 SHGs the cumulative number of linked SHGs stands at 2.2 million today, reaching about 31 million families and linking to financial institutions including commercial banks, regional rural banks and cooperatives. This case study highlights key opportunities and challenges in linking community-based associations with member-owned institutions such as cooperatives for remote outreach. The case answers the following key questions: is this an effective model for remote outreach? Is there added value because these associations are member-owned?

Berkhoff, A. (2003) Microfinance in Rural India: Linking Self-Help Groups to Cooperative Banks and Primary Agricultural Credit Societies, unpublished diploma thesis, University of Karlsruhe, Karlsruhe.

Burgess, R. and Pande, R. (2005) ‘Can rural banks reduce poverty? Evidence from the Indian social banking experiment’, American Economic Review, Vol. 95 (3), pp. 780-795.

EDA Rural Systems and APMAS (2006) ‘Self-help groups in India: The light and shades of SHGs’, for CRS, USAID, CARE and GTZ/NABARD, CARE India.

Government of India (1997): All India Debt and Investment Survey, 1991-92: Indebtedness of rural households, NSS 48th Round, National Sample Survey Organisation, Delhi.

Government of India (2004) Backward Districts Initiative - Rashtriya Sam Vikas Yojana - The scheme and guidelines for preparation of district plans’, Planning Commission, Delhi.

Government of India (2005) ‘Draft final report of the task force on revival of rural cooperative credit institutions’, Delhi.

Harper, M., Berkhoff, A., Bajpai, A., Ramakrishna, R.V, Kulkarni, V. (2004) ‘SHGs and rural co-operative financial institutions: can linkage be mutually beneficial?’, National Bank for Agriculture and Rural Development (NABARD), Mumbai.

Price Waterhouse Coopers Pvt. Ltd., BASIX and ADB (2003) ‘India: Rural finance sector restructuring and development’, for Government of India.

RBI (2001) ‘Basic Statistical Returns, March 2001’, Reserve Bank of India, Mumbai.

RBI (2002) ‘Report on Trends in the Indian Banking Sector, November 2002’, Reserve Bank of India, Mumbai.

Sinha, Sanjay, Chetan, Tanmay, Orlanda, Ruthven and Pathak, Nilotpal (2003) The Outreach/Viability Conundrum: Can India's regional rural banks really serve low-income?, Overseas Development Institute, Working Paper 229, London.

Zacharias, K.D. (2005) ‘Legal clients and regulatory framework for cooperatives’, Reserve Bank of India, Mumbai

Berkhoff, A. (2003) Microfinance in Rural India: Linking Self-Help Groups to Cooperative Banks and Primary Agricultural Credit Societies, unpublished diploma thesis, University of Karlsruhe, Karlsruhe.

Burgess, R. and Pande, R. (2005) ‘Can rural banks reduce poverty? Evidence from the Indian social banking experiment’, American Economic Review, Vol. 95 (3), pp. 780-795.

EDA Rural Systems and APMAS (2006) ‘Self-help groups in India: The light and shades of SHGs’, for CRS, USAID, CARE and GTZ/NABARD, CARE India.

Government of India (1997): All India Debt and Investment Survey, 1991-92: Indebtedness of rural households, NSS 48th Round, National Sample Survey Organisation, Delhi.

Government of India (2004) Backward Districts Initiative - Rashtriya Sam Vikas Yojana - The scheme and guidelines for preparation of district plans’, Planning Commission, Delhi.

Government of India (2005) ‘Draft final report of the task force on revival of rural cooperative credit institutions’, Delhi.

Harper, M., Berkhoff, A., Bajpai, A., Ramakrishna, R.V, Kulkarni, V. (2004) ‘SHGs and rural co-operative financial institutions: can linkage be mutually beneficial?’, National Bank for Agriculture and Rural Development (NABARD), Mumbai.

Price Waterhouse Coopers Pvt. Ltd., BASIX and ADB (2003) ‘India: Rural finance sector restructuring and development’, for Government of India.

RBI (2001) ‘Basic Statistical Returns, March 2001’, Reserve Bank of India, Mumbai.

RBI (2002) ‘Report on Trends in the Indian Banking Sector, November 2002’, Reserve Bank of India, Mumbai.

Sinha, Sanjay, Chetan, Tanmay, Orlanda, Ruthven and Pathak, Nilotpal (2003) The Outreach/Viability Conundrum: Can India's regional rural banks really serve low-income?, Overseas Development Institute, Working Paper 229, London.

Zacharias, K.D. (2005) ‘Legal clients and regulatory framework for cooperatives’, Reserve Bank of India, Mumbai

Berkhoff, A. (2003) Microfinance in Rural India: Linking Self-Help Groups to Cooperative Banks and Primary Agricultural Credit Societies, unpublished diploma thesis, University of Karlsruhe, Karlsruhe.

Burgess, R. and Pande, R. (2005) ‘Can rural banks reduce poverty? Evidence from the Indian social banking experiment’, American Economic Review, Vol. 95 (3), pp. 780-795.

EDA Rural Systems and APMAS (2006) ‘Self-help groups in India: The light and shades of SHGs’, for CRS, USAID, CARE and GTZ/NABARD, CARE India.

Government of India (1997): All India Debt and Investment Survey, 1991-92: Indebtedness of rural households, NSS 48th Round, National Sample Survey Organisation, Delhi.

Government of India (2004) Backward Districts Initiative - Rashtriya Sam Vikas Yojana - The scheme and guidelines for preparation of district plans’, Planning Commission, Delhi.

Government of India (2005) ‘Draft final report of the task force on revival of rural cooperative credit institutions’, Delhi.

Harper, M., Berkhoff, A., Bajpai, A., Ramakrishna, R.V, Kulkarni, V. (2004) ‘SHGs and rural co-operative financial institutions: can linkage be mutually beneficial?’, National Bank for Agriculture and Rural Development (NABARD), Mumbai.

Price Waterhouse Coopers Pvt. Ltd., BASIX and ADB (2003) ‘India: Rural finance sector restructuring and development’, for Government of India.

RBI (2001) ‘Basic Statistical Returns, March 2001’, Reserve Bank of India, Mumbai.

RBI (2002) ‘Report on Trends in the Indian Banking Sector, November 2002’, Reserve Bank of India, Mumbai.

Sinha, Sanjay, Chetan, Tanmay, Orlanda, Ruthven and Pathak, Nilotpal (2003) The Outreach/Viability Conundrum: Can India's regional rural banks really serve low-income?, Overseas Development Institute, Working Paper 229, London.

Zacharias, K.D. (2005) ‘Legal clients and regulatory framework for cooperatives’, Reserve Bank of India, Mumbai