The Bank linkage program has made inclusive growth possible by providing easy access to bank loans without any physical collateral. The efficiency and effectiveness of the NHGs are verified on the basis of some objectively verifiable and easily identifiable parameters. NABARD has developed a 15-point index for rating NHGs on the basis of which they will be allowed to link with various banks under the Linkage Banking Scheme. The total amount which has been mobilized under linkage banking is Rs. 39,218.63 Crores. The linkage loans may be raised directly by the NHG or as bulk loan through the CDS.

Easy access to bank linkage program has checked the poor from approaching money lenders. In order to motivate the NHGs to come forward for bank linkage program Kudumbashree has designed an incentivizing program called matching grant. Here the linked NHG will be given a grant of Rs.5000/- or 10% of their thrift( Whichever is lesser)

Govt of Kerala has introduced a new interest subvention scheme to promote Bank Linkage Program among Kudumbashree Neighbourhood Groups. Under this scheme all Kudumbashree NHGs are eligible for interest subvention to avail the loan facility at an interest rate of 4% on credit upto Rs. 3 lakhs. The benefit of this scheme will be available to the NHGs from April 2016.

The interest subsidy would be provided as annual installments to the NHGs. One highlight of the scheme is the inclusion of joint liability groups for farming in the ambit of the scheme.

Under NRLM( Central Scheme) Interest subvention program all women NHGs in category 1 districts namely Palakkad ,Malappuram, Idukki and Wayanad are eligible for interest subvention on credit upto Rs. 3 lakhs at 7% per annum. Further, these NHGs will be provided with an additional 3% subvention on the prompt repayment of loans.

For category II districts, all Kudumbashree NHGs in rural area are eligible for interest subvention to avail the loan facility at an interest rate of 7%. Here Banks will charge the SHGs as per their respective lending norms and the difference between the lending rates and 7% subjected to a maximum limit of 5.5% will be subvented in the loan accounts of the NHGs by Kudumbashree with the support of NRLM Fund.

KAASS, the Kudumbashree Accounts & Audit Service Society; is a home grown enterprise to ensure proper account keeping in the community network. Each district has been furnished with a KAASS team that has been drawn from commerce graduates and is guided by professional chartered accountants. These teams have been facilitating management of accounts at the NHG, ADS and CDS levels.

KAASS team mainly point out the defects in existing accounting system prevailing in respective NHGs/ADS/CDS and rectify wherever required. There are over 377 members in 46 KAASS groups across the state.

Kudumbashree programs cover 46.16 Lakhs families organized under 3.16 Lakhs NHGs through 1070 CDSs. All NHGs have bank accounts through which members of NHGs have access to savings and credit services of banks. The NHG is acting as intermediary between banks and ultimate beneficiary. At NHG level, it is observed that there is lack of knowledge about banking procedures, misconceptions regarding interest rates and lack of awareness about banking ombudsmen and so on. Kudumbashree has chalked out a comprehensive Financial Literacy Campaign in order to provide a platform for NHGs to be aware of and benefit from formal banking services.

Now there are annual financial literacy programs of various kinds to address NHG members.