Sanghamithra’s SHG-Hybrid Model, a tiny innovation of SRFS

 “Microfinance SRFS for occasional paper – 3,” authored by Aloysius Prakash Fernandez, Founder Chairperson of Sanghamithra Rural Financial Services (SRFS), an NGO-promoted “not-for-profit” microfinance institution. The paper, subtitled “A worm’s-eye view” and written on July 31st, 2025, critically assesses the current state of the microfinance sector, arguing that the focus has shifted from including marginalized people to prioritizing speed, greed, and standardization, leading to an emerging crisis characterized by high Non-Performing Assets (NPAs) and borrower harassment. The author champions the SHG-Hybrid model developed by SRFS, which seeks to reintroduce the core features of the original SHG-Bank Linkage program (1992) by placing marginalized people and their Self-Help Groups (SHGs) back at the center of credit transactions to ensure sustainable financial inclusion. People-centric approach with current regulatory steps and FINTECH models that often exclude the most vulnerable populations.