NSFDC Micro Credit Finance Loan Scheme: Up to ₹1.25 LakhsScheme StatusScheme Status

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The “Micro Credit Finance” scheme is implemented by the National Scheduled Castes Finance and Development Corporation (NSFDC) under the Ministry of Social Justice and Empowerment, Government of India. This scheme is designed to support individuals from the Scheduled Caste community by providing loans to establish or expand income-generating activities. The financial assistance is extended for setting up units costing up to ₹1,40,000/-, covering a wide range of viable business activities such as running a betel leaf shop, bakery, candle making, cycle repair, goat rearing, beauty parlour, vegetable vending, incense stick making, fish vending, milch animal rearing, papad manufacturing, pickle manufacturing, tea shop, and similar endeavors.

Benefits

  • Loan Limit and Structure:

    • Loans are provided up to 90% of the project cost, with a maximum amount of ₹1.25 lakhs.
    • The scheme supports units costing up to ₹1,40,000/-.

  • Interest Rate:

    • NSFDC charges an interest rate of 2.5% from the State/Channelizing Agencies (SCAs/CAs), which in turn levy 6.5% from the beneficiaries.

  • Repayment Period:

    • The loan is to be repaid in quarterly installments over a maximum period of three years from the date of disbursement, including a 3-month moratorium period.

Eligibility

  1. Individual Eligibility:

    • The applicant must belong to the Scheduled Caste community.
    • The applicant’s annual family income should be less than ₹3,00,000/- (applicable for both rural and urban areas, effective from 08.03.2018).

  2. Partnerships and Cooperative Societies:

    • Partnership Firms and Co-operative Societies can also apply, provided:
      • All members belong to the Scheduled Caste community.
      • Each member’s annual family income does not exceed ₹3,00,000/-.

Note: Verification of the eligibility criteria is the sole responsibility of the State Channelizing Agencies (SCAs)/Channelizing Agencies (CAs). NSFDC reserves the right to re-verify applicant eligibility if necessary.

Application Process

Offline

  1. Contact and Submission:

    • Applicants must contact the District Office of the State Channelizing Agencies (SCAs) to apply for the NSFDC micro credit finance scheme.
    • Submit the application in NSFDC’s prescribed format, including detailed business information and copies of documents such as caste, income, and experience certificates.

  2. Alternative Submission:

    • Eligible applicants can also submit their loan applications to other Channelizing Agencies of NSFDC, such as Regional Rural Banks, Public Sector Banks, or NBFC-MFIs with whom NSFDC has signed Memorandum of Agreements.

  3. Scrutiny and Appraisal:

    • The District Offices of SCAs/CAs scrutinize the applications to ensure compliance with eligibility criteria.
    • Scrutinized applications are forwarded to the respective Head Offices for further processing.
    • The Head Offices appraise the project proposals. Viable proposals are recommended for sanction and then forwarded to NSFDC along with the SCAs’ recommendations.

  4. Approval and Disbursement:

    • The Project and Banking Desk at NSFDC appraises the loan proposals, prepares an appraisal report, and submits it to the Project Clearance Committee (PCC) for concurrence.
    • Upon PCC’s recommendation, sanction letters (Letters of Intent) with terms and conditions are issued to the SCAs/RRBs/Public Sector Banks/NBFC-MFIs.
    • Once the sanction is accepted and prudential norms are fulfilled, funds are disbursed by NSFDC to the respective agencies, which then disburse the funds to the beneficiaries.

  5. Repayment:

    • Beneficiaries repay the loans according to the repayment schedule stipulated by the SCAs/CAs.

Note: Direct contact with NSFDC by applicants/beneficiaries will not be entertained. Applications must be submitted through the concerned State Channelizing Agencies or other designated channels.

Documents Required

  • Passport-size photograph.
  • Aadhaar Card.
  • Income Certificate.
  • Caste Certificate.
  • Residence Proof.
  • Bank Passbook/Bank Account Details.
  • Any additional documents as specified in the NSFDC application format (e.g., business plan, experience certificates).

Frequently Asked Questions

  1. What is NSFDC?
    NSFDC stands for the National Scheduled Castes Finance and Development Corporation, which implements the micro credit finance scheme for the Scheduled Caste community.

  2. What is the maximum loan amount provided under this scheme?
    Loans are provided up to 90% of the project cost, with a maximum amount of ₹1.25 lakhs.

  3. What types of activities are eligible for funding under the scheme?
    The scheme supports various income-generating activities, including betel leaf shops, bakeries, candle making, cycle repair, goat rearing, beauty parlours, vegetable vending, incense stick making, fish vending, milch animal rearing, papad manufacturing, pickle manufacturing, tea shops, etc.

  4. What is the interest rate charged under this scheme?
    NSFDC charges an interest rate of 2.5% from SCAs/CAs, which in turn charge 6.5% from the beneficiaries.

  5. What is the repayment period for the loan?
    The loan is to be repaid in quarterly installments over a maximum period of three years, including a 3-month moratorium period.

  6. Who is eligible to apply for the Micro Credit Finance scheme?
    Individuals belonging to the Scheduled Caste community with an annual family income of less than ₹3,00,000/- are eligible. Partnership firms and cooperative societies may also apply if all members meet the eligibility criteria.

  7. Can partnership firms and cooperative societies apply for the loan?
    Yes, provided all members belong to the Scheduled Caste community and each member’s annual family income does not exceed ₹3,00,000/-.

  8. Where can applicants apply for the loan?
    Applicants must contact the District Office of the State Channelizing Agencies (SCAs) or submit their applications through other designated Channelizing Agencies of NSFDC.

  9. Can applicants directly contact NSFDC for the loan?
    No, applicants must apply through the designated SCAs/CAs. Direct correspondence with NSFDC will not be entertained.

  10. How are the loan amounts disbursed to the beneficiaries?
    Approved funds are disbursed by NSFDC to the SCAs/RRBs/Public Sector Banks/NBFC-MFIs, which then transfer the funds to the beneficiaries.

Sources and References

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