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While no specific information is available about the formal banking system in developing countries being ill-equipped to meet the credit needs of the informal sector, in India there are various Central Government Sponsored Schemes (CGSSs), being implemented through the banks, which provide access to credit to the informal sector. These schemes have a subsidy component from the Government and a loan component from the banks. These include the Swarnjayanti Gram Swarozgar Yojana (SGSY) for the rural poor, Swarna Jayanti Shahari Rozgar Yojana (SJSRY) for the urban poor, Scheme for Liberation and Rehabilitation of Scavengers (SLRS) for those who are engaged in scavenging and Prime Minister’s Rozgar Yojana (PMRY) for the educated unemployed youth. Banks also extend finance to the poorest of the poor under the Differential Rate of Interest Scheme (DRI), which involves interest subsidy. Banks are also implementing the Kisan Credit Card (KCC) scheme for the farmers. Apart from this, banks also lend under various microfinance models to the Self Help Groups (SHGs). As on 31st March, 2005, 16.18 lakhs SHGs have been linked to banks and the total credit flow to these SHGs was Rs.6898 crores. This information was given by Shri S.S. Palanimanickam, Minister of State for Finance in reply to a question raised by Shri Magunta Sreenivasulu Reddy in Lok Sabha today. BSC/BY/GN-297/05
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