Women’s Financial Empowerment in Himachal Pradesh: Evaluation of the Sashakt Mahila Rin Yojana (2023)

Policy Update
Debjani Chattarjee

Background

Women in Himachal Pradesh often face difficulties in accessing formal credit because of limited income, lack of collateral and financial constraints. These barriers can prevent them from starting small businesses, expanding existing activities and becoming financially independent. To address these challenges, the Himachal Pradesh State Cooperative Bank introduced the Sashakt Mahila Rin Yojana in 2023. The scheme provides collateral free loans of ₹21,000, ₹51,000 and ₹1,01,000 to eligible women, helping them access credit without pledging assets. It also encourages responsible borrowing by allowing women to access higher loan amounts after successfully repaying previous loans. Through this initiative, the bank aims to promote women’s entrepreneurship, strengthen financial security and expand their participation in economic activities.

Functioning

1. Institutional Architecture: The Himachal Pradesh State Cooperative Bank (HPSCB) introduced the scheme in 2023 to expand women’s access to formal credit.

2. Funding Mechanism: HPSCB provides loans through its banking operations at an interest rate of 8.51%, without requiring collateral or margin money.

3. Beneficiaries: Bonafide Himachali women aged 18 to 55 years with the prescribed family savings accounts at HPSCB can apply. The initial loan is ₹21,000.

4. Implementation Process: Borrowers who repay the first loan without default within the specified period can access ₹51,000 next, followed by ₹1,01,000 after successful repayment of the second loan. Loans support livelihood activities, agriculture and small businesses.

Progressive Loan Structure

Source: Himachal Pradesh State Cooperative Bank, Sashakt Mahila Rin Yojana scheme booklet and Annual Report 2023–24.

5. Monitoring Mechanism: Repayment records and loan account performance help the bank assess repayment discipline. However, publicly available scheme documents do not specify a separate impact monitoring framework.

6. Stakeholders: HPSCB manages lending and repayment, while women borrowers use the credit for livelihood and economic activities. The bank’s official scheme booklet outlines the eligibility and lending conditions.

Performance

1. Loan Disbursement and Coverage: The Himachal Pradesh State Cooperative Bank’s Brief Profile 2024 recorded 25,000 loan accounts and ₹52.50 crore in disbursements under the Sashakt Mahila Rin Yojana as of 31 March 2024. This confirms substantial credit delivery during the scheme’s initial period. However, loan accounts do not necessarily represent unique women beneficiaries (Himachal Pradesh State Cooperative Bank [HPSCB], 2024).

Source: HPSCB figures reported by The Indian Express.

2. Access to Collateral Free Credit: The bank provides loans without collateral at three levels: ₹21,000, ₹51,000 and ₹1,01,000. This structure helps women access formal credit without pledging assets, although official reports do not quantify how many borrowers lacked collateral before joining the scheme (HPSCB, 2024).

3. Progressive Loan Opportunities: The bank’s Annual Report 2023–24 states that women who repay the first ₹21,000 loan successfully within 12 to 15 months can qualify for ₹51,000. Successful repayment of the second loan creates eligibility for ₹1,01,000 within the subsequent 12 to 15 months, subject to scheme conditions. This encourages repayment discipline while providing opportunities for larger borrowing (HPSCB, 2024).

Banking Support and Institutional Reach

Source: HPSCB Brief Profile 2024 and scheme documentation.

4. Affordable Banking Support: When all family members of a borrower open savings accounts with the bank, they become eligible for a 100% waiver of ATM charges. This benefit encourages wider household participation in formal banking (HPSCB, 2024).

5. Support for Livelihoods: The scheme aims to help women pursue entrepreneurship, livelihood activities and household needs. However, the available official performance data do not establish how many businesses were started or expanded through the loans.

6. Institutional Reach: HPSCB reported operating 238 branches and 24 extension counters in its 2024 profile, providing an existing banking network through which women can access financial services. These figures represent the bank’s overall network, not scheme specific outreach (HPSCB, 2024).

7. Financial Inclusion: The bank’s profile recorded 53,081 female borrowers across its overall lending portfolio. This indicates women’s participation in the bank’s credit activities but cannot be attributed solely to this scheme (HPSCB, 2024).

8. Evidence Gaps: Publicly available reports do not provide scheme specific district wise coverage, repayment rates, business survival or changes in borrowers’ income. These indicators are necessary to assess whether credit access translates into sustained economic empowerment.

Impact

1. Improved Access to Finance: The Sashakt Mahila Rin Yojana has expanded women’s access to formal credit in Himachal Pradesh. The Himachal Pradesh State Cooperative Bank reported 25,000 loan accounts and ₹52.50 crore in disbursements by 31 March 2024. This indicates improved access to institutional lending, although account numbers do not establish how many individual women experienced lasting financial improvements (HPSCB, 2024).

2. Reduced Dependence on Collateral: By offering loans without collateral, the scheme helps women borrow without pledging property or other assets. This may benefit women with limited asset ownership, although the bank has not published data measuring how many borrowers previously lacked access to credit.

3. Support for Women’s Entrepreneurship: Credit can help women purchase equipment, establish small businesses and expand livelihood activities. The bank identifies these activities as intended uses of the scheme. However, publicly available data do not establish how many enterprises were created or expanded through these loans.

4. Greater Financial Independence: Access to credit may allow women to make more independent decisions about economic activities and manage their financial needs. Nevertheless, evidence on changes in women’s control over income, household decision making and personal savings remains limited.

5. Opportunities for Business Expansion: The scheme’s progressive lending structure allows eligible women to access larger loans after successfully repaying earlier amounts. This creates opportunities to increase business investment over time. Its actual contribution to business growth requires evidence on repeat borrowing and enterprise performance.

6. Encouragement of Financial Discipline: Successful repayment creates eligibility for higher loan amounts, encouraging responsible borrowing. However, the bank’s publicly available scheme data do not provide a scheme specific repayment rate or figures on overdue loans and defaults.

7. Wider Household Financial Inclusion: The scheme offers a complete waiver of ATM charges when all family members of a borrower open savings accounts with HPSCB. This may encourage household banking participation, although separate figures on new accounts opened through this incentive are unavailable.

8. Limits to Measured Impact: The bank’s reported lending figures demonstrate financial outreach, not proven improvements in women’s welfare. Published evidence remains limited on income growth, employment creation, poverty reduction and long term business survival. District wise beneficiary data and regular follow up surveys would help establish whether the scheme produces sustained economic empowerment.

Emerging Issues 

1. Limited evidence on actual outcomes: One major issue is the lack of publicly available, scheme specific information on changes in beneficiaries’ income, employment and financial independence. Loan disbursement figures show that credit has been provided, but they do not establish whether women have achieved sustainable economic improvements. Without regular impact assessments, it is difficult to determine whether the scheme is meeting its wider empowerment objectives.

2. Risk of repayment difficulties: Although collateral free loans improve access to finance, borrowers remain responsible for repayment. Women running small businesses may experience irregular earnings because of seasonal demand, rising input costs or unexpected household expenses. If their activities do not generate sufficient returns, repayment may become difficult. Publicly accessible information on overdue loans, defaults and repayment performance under this specific scheme is limited.

3. Insufficient business development support: Access to credit alone may not be enough to establish a successful enterprise. Women may also require training in bookkeeping, pricing, marketing, digital payments and business planning. Without adequate support, loan recipients may struggle to use borrowed funds productively or expand their activities. The extent of business training and post loan assistance provided specifically under the scheme needs clearer documentation.

4. Unequal access among women: Women living in remote villages, those with limited financial literacy and those who have difficulty reaching bank branches may face additional barriers when applying for loans. Social restrictions and household responsibilities can further limit their ability to pursue self employment. Publicly available beneficiary data disaggregated by district, income group, caste and rural or urban residence are needed to determine whether the scheme reaches the most disadvantaged women.

5. Limited market opportunities: Women who borrow to establish small businesses may encounter weak local demand, competition, transport difficulties and limited access to larger markets. These problems can reduce profitability even when credit is available. Better connections with self help groups, local enterprises, government procurement opportunities and digital marketplaces could help borrowers build more sustainable livelihoods.

6. Lack of transparent monitoring: Regular publication of beneficiary numbers, loan utilisation, repayment rates and enterprise outcomes would improve accountability. Without these indicators, policymakers cannot easily identify implementation gaps or compare performance across districts.

7. Financial vulnerability: Borrowing without collateral reduces one entry barrier but does not eliminate financial risk. Women need clear information about interest costs, repayment obligations and available grievance mechanisms to avoid excessive borrowing and protect their long term financial security.

Way Forward

1. Strengthen district level outreach: The Himachal Pradesh State Cooperative Bank should organise regular awareness camps through its branches, Gram Panchayats and women’s self help groups. Simple information leaflets in Hindi and local languages can explain eligibility, loan amounts, interest rates, repayment schedules and application procedures. Special attention should be given to women in remote villages who may have limited access to banking information.

2. Link credit with practical business training: Before disbursing loans, banks can offer short training sessions on budgeting, bookkeeping, pricing, digital payments and repayment planning. District Industries Centres, Rural Self Employment Training Institutes and the Himachal Pradesh State Rural Livelihoods Mission can help deliver these sessions without requiring a new administrative structure.

3. Improve access to markets: The government should connect interested borrowers with local fairs, exhibitions, self help group outlets and digital marketplaces. Women producing handicrafts, woollen products, food items and other local goods could receive support with packaging, product quality and marketing. This would help borrowers convert access to credit into more sustainable business opportunities.

4. Introduce simple post loan monitoring: Bank branches can conduct follow up visits or telephone calls three and six months after disbursement to understand how loans are being used. A short monitoring form could record whether the business has started, whether income has changed and whether the borrower is facing repayment difficulties. This would provide useful evidence without creating an expensive monitoring system.

5. Ensure responsible lending and repayment support: Loan officers should assess borrowers’ expected earnings and existing financial obligations before approving credit. Women experiencing temporary business difficulties should receive timely repayment counselling and clear information about applicable restructuring or relief provisions. Borrowers must understand the full repayment obligation before accepting a loan.

6. Publish transparent performance data: The bank should publish annual scheme specific information on the number of unique women beneficiaries, district wise loan disbursement, repayment rates, overdue accounts and the purposes for which loans are used. Reporting these indicators separately would prevent confusion between the scheme’s achievements and the bank’s overall lending performance.

7. Prioritise underserved women: Outreach should focus on women from low income households, remote rural communities and groups with limited access to formal finance. Application assistance at Panchayat level and coordination with existing self help groups could reduce practical barriers without creating additional institutions.

8. Build partnerships with existing programmes: The scheme can be linked with relevant skill development, entrepreneurship and rural livelihood programmes. This would allow women to access training, financial support and market connections through existing government infrastructure, making implementation more affordable and practical.

References and Links

1. Himachal Pradesh State Cooperative Bank. (2023). Sashakt Mahila Rin Yojana. https://hpscb.bank.in/upload/notification/doc/EHorisMD0xTsPFy3fAkQmmwVZzUg1p4MVCoFqZzC.pdf

2. Himachal Pradesh State Cooperative Bank. (2024). Brief profile 2024. https://hpscb.bank.in/upload/notification/doc/Brief_Profile_2024..pdf

3. Himachal Pradesh State Cooperative Bank. (2024). Annual report 2023–24. https://hpscb.bank.in/upload/annualreport/annual_report_FY_2023-24.pdf

4. Government of Himachal Pradesh, Department of Economics and Statistics. (2025). Economic survey 2024–25. https://himachalservices.nic.in/economics/en-IN/eco-survey-2024-25.html

5. Government of Himachal Pradesh, Department of Economics and Statistics. (2026). Economic survey 2025–26. https://himachalservices.nic.in/economics/pdf/en-economic_survey_2025-26.pdf

6. The Himachal Pradesh State Cooperative Bank. (n.d.). Downloads. https://hpscb.bank.in/downloads

7. The Himachal Pradesh State Cooperative Bank. (n.d.). Annual reports. https://hpscb.bank.in/annual-report

About the Contributor

Debjani Chatterjee is a policy researcher with a background in Finance and Political science. Her work focuses on leveraging data analytics to support evidence based policy research.

Acknowledgement

My sincere thanks to the Impact and Policy Research Institute (IMPRI) for the opportunity to prepare this policy update article. IMPRI’s dedication to connecting research with actionable policy practice provides an invaluable platform for learning.

Reviewed by Sneha Kohli and Aditi Bhuinyan 

Disclaimer

The opinions expressed in this article are strictly those of the author and do not reflect the official position or views of the organization.

Read More at IMPRI

Capitalizing Community Action: A Policy Review of Kerala’s Kudumbashree Micro-Enterprise Loan Framework (1998)

West Bengal IT & Electronics Policy 2018: Assessing Growth and Emerging Gaps