Volume-I, Issue-III November 2014 183 International Journal of Humanities & Social Science Studies (IJHSSS) A Peer-Reviewed Bi-monthly Bi-lingual Research Journal ISSN: 2349-6959 (Online), ISSN: 2349-6711 (Print) Volume-I, Issue-III, November 2014, Page No. 183-191 Published by Scholar Publications, Karimganj, Assam, India, 788711 Website: http://www.ijhsss.com SHG Models of Microfinance in Loaning Performance of SHGs: A Study on Barpeta District of Assam Bhabananda Deb Nath Asst. Professor, Dept. of Commerce, Karimganj College, Karimganj, Assam, India Abstract Microfinance in India mainly provides under the SHG models, which comprise three credit linkage models and have recorded tremendous growth in reaching poor people, forming SHGs, disbursing loans, savings, financial inclusion, women empowerment, etc. Again, disbursing loan without mortgage is the crucial feature, as why microfinance is very popular today, and that under SHG system ‘peer-pressure’ serves as the only collateral. Thus, this paper highlighted the ‘loaning performance’ towards SHGs in Barpeta District of Assam under SHG models from 2007-08 to 2011- 12, on the basis of secondary and primary data. The study reveals that, the SHGs under model-III have been obtained more amount and frequent loans than SHGs under model-II in the district during the period of study. Key words: Barpeta District, Loan/Credit, Performance, SHGs, SHG models. Introduction: Microfinance, which originated from „Micro-credit‟ or Small loans concept of the unorganized sector, now includes a range of financial services, mainly, the provision of thrift, credit, insurance, remittance services, etc. for the needy people, predominantly for the poor and women. Further, to extend the service of microfinance, various methodologies have been developed and among them, the group based financing systems are found to be more successful, as in those systems „peer-pressure‟ served as collateral for recovery of credit. Thus, „SHG models‟, the Indian home grown models, have dominated the sector in extending the service of microfinance in our country. Like „Grameen Model‟ in Bangladesh, „SHG models‟ in India have revolutionized microfinance services. More remarkably, the „Bandhan‟ (i.e., MFI, West-Bengal) has recently become a Bank for the poor in our country. SHG Models, comprise three credit linkage models viz., Model-I, where banks form, nurture and finance the SHGs, thus the entire responsibility is vested upon the promoting banks. Model-II, where the task of selection, formation, promotion and nurturing of SHGs are vested with some Govt. and Non-Govt. agencies (i.e., with DRDA, Block Offices, NGOs, MFIs etc.) and banks directly finance the Groups after a certain period on fulfillment of some conditions. So, from credit-linkage point of view, model-I & II are alike. Under Model-III, banks, financial institutions, funding agencies, etc. provide bulk loans to NGOs/MFIs for on-lending to the SHGs. NGOs/MFIs act as intermediaries between banks and SHGs, and the entire responsibility of formation, nurturing and financing, etc. are vested with those intermediaries. This, model has been developed to extend the service of microfinance to the areas having poor banking infrastructures and networks. All these models are functional in India with different volume of service, but in Barpeta District of Assam, only Model-II and Model-III are operational and no such SHGs were found during the field survey, that are formed under Model-I, and that is also reported by the intermediaries. In the provision of microfinance, the provision of „credit‟ or „loans‟ is the main provision and entire performance of microfinance sector, that we are witnessing today, is only by dint off „loans‟ or „credit‟ service. As such, success of microfinance programs is strongly relying to a greater extant on the supply or flow of loans in terms of quantum, frequency, affordability, re-payment, etc., of loans. Again, SHGs can initiate internal lending from its groups savings only after 2-3 months of regular savings by the group members. These loans are small in quantity and used mostly to meet consumption needs, emergency needs like medical treatment, social ceremonies etc. (Feroze & Chauhan, 2011), and is insufficient to cope with the growing deeds of the SHGs. Thus, needs for