{"id":7348,"date":"2021-08-05T05:39:45","date_gmt":"2021-08-05T05:39:45","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=7348"},"modified":"2021-08-06T12:46:17","modified_gmt":"2021-08-06T12:46:17","slug":"micro-financing-scheme-of-nmdfc-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/","title":{"rendered":"Micro Financing Scheme of NMDFC in India &#8211; A Complete Guide"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Micro Financing Scheme in India was launched by the NMDFC <strong><em>(National Minorities Development and Finance Corporation) <\/em><\/strong>to deliver concessional finance to the minorities for self-employment or income-making activities. In this scheme, help in the form of loans will be offered to the economically weaker sections of minorities&#8217; communities for commencing income-generating activities. In this write-up, we shall discuss the Micro Financing Scheme under the guidance of NBCFDC. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a7ab1cb740\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a7ab1cb740\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/#What_is_Microfinance\" title=\"What is\nMicrofinance?\">What is\nMicrofinance?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/#Objective_of_Loan_under_Micro_Financing_Scheme_of_NHMDFC_in_India\" title=\"Objective of Loan under Micro Financing Scheme of NHMDFC in India\">Objective of Loan under Micro Financing Scheme of NHMDFC in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/#Eligibility_Criteria_to_get_the_loan_under_Micro_Financing_Scheme_of_NMDFC_in_India\" title=\"Eligibility Criteria to get the loan under Micro Financing Scheme of NMDFC in India\">Eligibility Criteria to get the loan under Micro Financing Scheme of NMDFC in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/#Details_of_Loan\" title=\"Details of\nLoan\">Details of\nLoan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/#What_is_the_Procedure_to_Get_Loan_under_the_Micro_Financing_Scheme_of_NMDFC_in_India\" title=\"What is the Procedure to Get Loan under the Micro Financing Scheme of NMDFC in India?\">What is the Procedure to Get Loan under the Micro Financing Scheme of NMDFC in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/#Loan_Repayment\" title=\"Loan Repayment\">Loan Repayment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/micro-financing-scheme-of-nmdfc-in-india\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Microfinance\"><\/span>What is\nMicrofinance?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It recognises a poor individual as extraordinary reservoirs of knowledge &amp; energy and bring in people with limited incomes &amp; give them the equipment to aid themselves. <strong><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/microfinance-company-registration\">Microfinance<\/a><\/strong> is given to underprivileged people with the belief that providing a dole (philanthropy, charity, freebies, etc.) is not the solution to poverty.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Objective_of_Loan_under_Micro_Financing_Scheme_of_NHMDFC_in_India\"><\/span>Objective of Loan under Micro Financing Scheme of NHMDFC in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nmicro-credit can be obtained by the members of lower sections amongst the\nminorities organised into SHGs (Self Help Groups) for increasing income\ngeneration activities. The activity can be initiated by the individual member\nof the Self Help Groups or by the group. Following is the list of\nincome-generating activities:<\/p>\n\n\n\n<ol><li>Small Business;<\/li><li>Transport and Services Sector;<\/li><li>Technical Trades;<\/li><li>Traditional and Artisans\nOccupations;<\/li><li>Agricultural and Allied\nActivities.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_Criteria_to_get_the_loan_under_Micro_Financing_Scheme_of_NMDFC_in_India\"><\/span>Eligibility Criteria to get the loan under Micro Financing Scheme of NMDFC in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li><strong><em>For Individual: <\/em><\/strong>The criteria of an individual to apply for this scheme under NMDFC is given below:<ol><li>The family of beneficiary yearly income should be Rs. 6 lakhs for rural and urban areas;<\/li><li>The beneficiary should not avail any financial help under the Central Government, State Government, or Financial Institutions concerning income generation activities;<\/li><li>The beneficiary should belong to the group of the minority community;<\/li><li>The beneficiary should be a usual member of any of the SHGs.<\/li><\/ol><\/li><li><strong><em>For NGO: <\/em><\/strong>Following is the criteria of NGO for executing the Micro Financing Scheme under NMDFC:<ol><li>The <strong><a href=\"https:\/\/swaritadvisors.com\/ngo-registration\" class=\"text-primary\">NGO <\/a><\/strong>should have an appropriate system of regulation accounts, and the account statement should have been inspected;<\/li><li>The NGO executing the Micro Financing Scheme should have the aim of serving the social &amp; economic needs of the weaker areas of the society;<\/li><li>The NGO should have experience in credit administration via SHGs for six months at least, and its recovery performance ratio of 90% &amp; above has to be maintained;<\/li><li>The NGO must have essential financial management ability, professional capability, organisational skill &amp; flexibility to execute the lending programme;<\/li><li>The NGO must have been incorporated for at least three years, and it should have a good reputation in its operation area.<\/li><\/ol><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Details_of_Loan\"><\/span>Details of\nLoan<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You\ncan check the details of loans under the Micro Financing Scheme from the table\nmentioned below:<\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Particulars<\/strong>\n  <\/td><td>\n  <strong>Scheme\n  Details <\/strong>\n  <\/td><td>\n  <strong>Amended\n  Scheme Details <\/strong>\n  <\/td><\/tr><tr><td>\n  Limit of Loan Amount \n  <\/td><td>\n  Rs. one lakh per SHG\u2019s member.Rs. twenty lakhs for a group\n  of twenty members in SHG.\n  \n  &nbsp;\n  <\/td><td>\n  Rs. one lakh fifty thousand\n  per SHG\u2019s member.Rs. thirty lakhs for a group\n  of twenty members in SHG.\n  \n  &nbsp;\n  <\/td><\/tr><tr><td>\n  Interest Rate charged from\n  NGO or SCA by NMDFC\n  <\/td><td>\n  1% per year\n  <\/td><td>\n  4% per year for Male\n  Beneficiaries.1% per year for Woman\n  Beneficiaries\n  \n  <\/td><\/tr><tr><td>\n  Interest Rate charged from\n  SHG by SCA\n  <\/td><td>\n  7% per year\n  <\/td><td>\n  10% per year for Male\n  Beneficiaries.8% per year for Woman\n  Beneficiaries\n  \n  <\/td><\/tr><tr><td>\n  Interest Rate charged from\n  Beneficiary or SHG\n  <\/td><td>\n  7% per year\n  <\/td><td>\n  10% per year for Male\n  Beneficiaries.8% per year for Woman\n  Beneficiaries\n  \n  <\/td><\/tr><tr><td>\n  Interest Rate charged from\n  NGO by NMDFC\n  <\/td><td>\n  1% per year\n  <\/td><td>\n  4% per year for Male\n  Beneficiaries.2% per year for Woman\n  Beneficiaries\n  \n  <\/td><\/tr><tr><td>\n  Interest Rate charged by SCA\n  from NGO\n  <\/td><td>\n  2% per year\n  <\/td><td>\n  5% per year for Male\n  Beneficiaries.3% per year for Woman\n  Beneficiaries\n  \n  <\/td><\/tr><tr><td>\n  Moratorium Period\n  <\/td><td>\n  3 Months\n  <\/td><td>\n  3 Months\n  <\/td><\/tr><tr><td>\n  Repayment time for the SCA or\n  NGO\n  <\/td><td>\n  3 to 4 years\n  <\/td><td>\n  3 to 4 years\n  <\/td><\/tr><tr><td>\n  Repayment time for the\n  Beneficiaries\n  <\/td><td>\n  3 years\n  <\/td><td>\n  3 years\n  <\/td><\/tr><tr><td>\n  Utilisation period of finance\n  for the SCA or NGO\n  <\/td><td>\n  1 to 3 months\n  <\/td><td>\n  1 to 3 months\n  <\/td><\/tr><tr><td>\n  NMFDC share to the NGO,\n  Beneficiary, SCA\n  <\/td><td>\n  90:10\n  <\/td><td>\n  90:10\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Procedure_to_Get_Loan_under_the_Micro_Financing_Scheme_of_NMDFC_in_India\"><\/span>What is the Procedure to Get Loan under the Micro Financing Scheme of NMDFC in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nSHG or NGO aiming to execute Micro Financing Scheme via the <strong><em>SCA\n(State Channelizing Agency)<\/em><\/strong> has to follow the procedure as mentioned\nbelow:<\/p>\n\n\n\n<ol><li>The SHG or NGO looking for micro-credit may directly approach NMDFC or the SCA in their respective state;<\/li><li>In case the NGO applies to the State Channelizing Agency, the application must be submitted to the Managing Director of the SCA in their respective state. Then the State Channelizing Agency would examine the application as per the guidelines of <strong>NMDFC<\/strong><sup><a class=\"text-primary\" href=\"http:\/\/www.nmdfc.org\/\"><strong>[1]<\/strong><\/a><\/sup>;<\/li><li>If the NGO implementing the scheme and wishes to get a loan from NMDFC, they have to apply directly to NMDFC in the prescribed form;<\/li><li>Once the application for a loan is received by SCA or NMDFC, feedback regarding the NGO from the Registrar of Cooperative Societies or other authority with whom the Non-Governmental Organisation is registered;<\/li><li>On fulfilment of feedback regarding the NGO from the Registrar, the NMDFC would consent to get Micro Financed by the NGO. In such a situation, the NGO have to submit copies of yearly reports for the past three years with the application;<\/li><li>Based on the information given by the NGO, the concerned representative of NMDFC will go to the NGO and make an informative report based on the examination;<\/li><li>This report will be inspected for implementation of the Micro Financing Scheme of NMDFC by an NGO. Moreover, its capacity to handle beneficiaries would also be inspected while sanctioning loan by National Minorities Development and Finance Corporation;<\/li><li>If an application form submitted by the NGO with more information will be inspected by the relevant authority for sanction;<\/li><li>The sanction letter would be granted to the NGO for the financial support comprising repayment schedule, utilisation period, rate of interest, etc.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Loan_Repayment\"><\/span>Loan Repayment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The NGO applying for a loan\ndirectly to National Minorities Development and Finance Corporation or SCA will\nrepay the amount of loan with the interest rate after the moratorium of 3\nmonths from the disbursement of funds&#8217; date;<\/li><li>State Channelizing Agency will\nmake repayments to NMDFC for 4 years from the date of funds\u2019 utilisation. The\nState Channelizing Agencies will repay the loan along with interest on a\nquarterly basis;<\/li><li>T&amp;C of loan repayment will\ndepend on the project nature the beneficiary has adopted;<\/li><li>The NGO would provide\npost-dated cheques for the quarterly repayment dues as stated in the sanction\nletter. These cheques will be kept by State Channelizing Agency or NMDFC only\nas security;<\/li><li>On receipt of loan repayment\nfrom the NGO, the post-dated cheque of the respective quarter will be returned\nwith an acknowledgement of the funds so received.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> The bank promise has to be provided as the security to permit funds under the Micro Financing Scheme with the National Minorities Development and Finance Corporation (NMDFC). Otherwise, the loan released by NMFDC directly to the NGO is required to deposit a fixed amount, which is equivalent to 100% of the total sanctioned loan amount. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/documents-for-registering-microfinance-company-in-india\/\">Documents for Registering Microfinance Company in India \u2013 Overview<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Micro Financing Scheme in India was launched by the NMDFC (National Minorities Development and Finance Corporation) to deliver concessional finance to the minorities for self-employment or income-making activities. In this scheme, help in the form of loans will be offered to the economically weaker sections of minorities&#8217; communities for commencing income-generating activities. In this [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":7349,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[59,56],"tags":[794],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/7348"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=7348"}],"version-history":[{"count":7,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/7348\/revisions"}],"predecessor-version":[{"id":7407,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/7348\/revisions\/7407"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/7349"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=7348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=7348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=7348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}