About Grameen Credit Score:
- It aims to formalize self-help group (SHG) transactions within the central credit system of India, thereby allowing leading financial institutions to better assess creditworthiness.
- The objective behind this scheme is to promote financial inclusion for self-help group (SHGs) women entrepreneurs.
- It is basically to provide them the much-needed support to grow in life by trying to build businesses.
- This score, hence, represents a significant shift in analysing the creditworthiness of millions of women involved in the SHGs across India's rural areas.
- The introduction of the Grameen credit score is expected to bring several positive changes:
- Enhanced financial access:It will open up new financial opportunities for rural women. Thus, enabling them to expand their businesses and improve their livelihoods. It will also introduce them with concepts like credit cards, creditworthiness, loan EMIs, loan repayment etc.
- Customized financial products:It will be supplemented by customized credit cards for micro-enterprises, with limits of up to ₹5 lakh. This will propel grassroot level financial empowerment.
- Improved credit assessment:By providing a digital framework for assessing creditworthiness, it will bridge existing gaps in the current credit bureau system, which often overlooks SHG members. It will also allow them to check their credit score, credit limits and ways to improve the same.
- Economic stability:Now with increase in credit availability women led SHGs will be in a position to better contribute more effectively to their houses. This will propel the growth in the rural community at large.
