SHG Bank Linkage is a win-win micro credit strategy for both Banks and members. Members get an easy access to formal banking system without collaterals and banks overcome the problems of high transaction costs, high default rate and reaching to the bottom of pyramid yet without extra efforts. Though the banking institutions have spread their net wide and penetrated deep in rural India after independence moneylenders still play a major role in providing credit at times of need without any paperwork and hassle. The basic purpose of group based micro credit scheme is alleviation of poverty and women emancipation. It emphasises on self reliance and sufficiency and sustainable development. Further it aims at mobilising people and connecting them with community organisation to overcome hindrances of participation and emancipation. SHGs not only act as a vehicle of micro credit but a platform to inculcate savings habits in the members.

KEYWORDS: micro credit scheme, poverty, women, costs, Non Performing Assets, employment