SHG Equipment Purchase: Who Owns the Asset and Invoice?

When a self-help group (SHG) buys a machine, the answer to "who owns it?" should be decided before the money is paid, because the invoice name, the payment account and the minutes book all need to match. As a rule of thumb, equipment used by many members and paid from group funds is a group asset in the SHG's name, while equipment one member uses for her own business, paid with a loan she repays, is her asset in her name. Rules described here are general practice as of November 2026; your State Rural Livelihood Mission, village organisation or bank may set specific formats.

For how SHG funding works under DAY-NRLM, see our NRLM SHG loan guide.

Where SHG money for equipment usually comes from

The source of money often decides who should own the asset.

The revolving fund and CIF ranges are from DAY-NRLM material placed before Parliament; the bank-loan limit is from RBI's DAY-NRLM instructions. Under the RBI amendment of August 2021, loans up to ₹10 lakh need no collateral and no margin, and for the portion above ₹10 lakh up to ₹20 lakh the primary security is hypothecation of assets created out of the bank finance. That is one reason the bank may want invoices and an asset list. Confirm the terms in RBI's current DAY-NRLM master circular and your sanction letter.

Group asset or member asset: how to decide

If the answers are mixed, settle them in writing. A common arrangement is a group-owned machine kept at one member's place, with a fixed monthly usage charge and a written duty to maintain it.

Before paying: the resolution

Pass a resolution in the SHG meeting and write it in the minutes book. It should state:

1. What is being bought, model, quantity and the supplier chosen.
2. Quotes compared, ideally two or three, and why one was chosen.
3. Source of money: savings, RF, CIF, bank loan or scheme support.
4. Owner: SHG or a named member.
5. Name on invoice: the SHG's registered name as on its bank account, or the member's name as on her Aadhaar and bank account.
6. Custodian: who keeps the machine and who keeps the original invoice.
7. Usage and charges: who may use it, usage fee, and how income is recorded.
8. Maintenance and repairs: who pays.
9. Exit and split: what happens if the user member leaves or the group breaks up.

Get signatures or thumb impressions of the members present, as your SHG rules require.

The invoice checklist

A proper invoice protects both the group and the member.

• Seller's name, address and GSTIN if registered
• Buyer name exactly as decided in the resolution
• Date, invoice number, description, model and serial number
• Price, GST shown separately where charged, and total
• Warranty card in the same buyer name
• Payment proof: bank transfer or cheque from the SHG account (for group assets) or the member's account (for member assets)

Avoid cash payments where possible. A cheque or transfer from the right account plus a matching invoice is the simplest proof if a dispute arises, if the bank asks, or if an auditor or CRP checks the books.

Worked example: one group asset, one member asset

A 10-member SHG decides two purchases in one meeting.

Group asset: flour mill for ₹1,20,000, paid from the SHG's bank-linkage loan, kept in a common shed. The SHG charges ₹2,000 a month to members who run it in turns and sets aside ₹500 a month for repairs.

• Net to the SHG each month: ₹2,000 − ₹500 = ₹1,500
• Months to recover the cost from usage charges: ₹1,20,000 ÷ ₹1,500 = 80 months

That is long, so the group may raise the charge or plan to repay the related loan portion from members' instalments as well. The invoice is in the SHG's name; the original stays in the SHG records box; the secretary signs the asset register.

Member asset: sewing machine for ₹18,000 for one member's tailoring work. The SHG lends her ₹18,000 at 12% a year for 12 months (the rate is the group's own decision; illustrative).

• Monthly rate = 12% ÷ 12 = 1%
• EMI = 18,000 × 0.01 × (1.01)^12 ÷ ((1.01)^12 − 1) = 18,000 × 0.01 × 1.1268 ÷ 0.1268 ≈ ₹1,599
• Total repaid ≈ ₹1,599 × 12 = ₹19,188, so interest ≈ ₹1,188

The invoice is in her name, she keeps the original, and the SHG keeps a copy with her loan ledger. You can test other tenures in the EMI calculator.

Keep an asset register

A simple register in the SHG books avoids most later disputes.

Photograph each invoice and the asset with its serial plate, and keep the photos with the group's digital records if your mission uses an app or bookkeeper system.

Selling, transferring or replacing an asset

• Do not sell or give away a group asset without a fresh resolution.
• If the bank loan is still running and the asset was created from it, inform the bank first; hypothecated assets should not be sold without its consent.
• If the asset came from a scheme, check the scheme's conditions on resale or transfer during any lock-in period.
• Record the sale price and deposit it in the SHG account.

Common mistakes

Key takeaways

• Decide ownership before paying: shared use and group repayment usually mean a group asset; one member's use and repayment usually mean her asset.
• Match three things: the resolution, the invoice name and the payment account.
• Under RBI's DAY-NRLM rules, the part of an SHG loan above ₹10 lakh (up to ₹20 lakh) is secured mainly by hypothecation of assets created, so keep invoices ready for the bank.
• In the example, a ₹1,20,000 mill needs 80 months of net usage charges to recover cost, and an ₹18,000 member loan at 12% costs about ₹1,188 in interest.
• Keep an asset register and do not sell group or hypothecated assets without a resolution and bank consent.

For other loan options open to women entrepreneurs, see loan schemes for women entrepreneurs.