Appreciating efforts of Andhra Pradesh government in regulating microfinance institutions (MFIs) and protecting interests of poor borrowers, union government has advised the state government to revamp its bank-linked self help groups (SHGs) model.

Jairam Ramesh, union minister of state for environment and forests, said the current bank-linked SHG model of AP does not offer a bouquet of financial products the way MFIs could offer. Also, while MFIs lending was more borrower driven meeting the needs, timing and quantum of loan of borrowers, the bank-linked SHG model was more bank driven.

“Both nature and timing of financial product is not borrower driven but bank driven in bank-SHG linkage program. This is the inherent limitation in bank-SHG linked model,” he said delivering keynote address at global summit on microfinance in Hyderabad on Tuesday.

He said bank-linked SHG model can also offer a cafeteria of financial products similar to MFIs.