Micro Finance Scheme of NMDFC

Micro Finance Scheme of NMDFC provides collateral-free financial support to members of self help groups from minority communities to help with income generation. Under this scheme you can get credit up to ₹1 lakh through credit line-1 and up to ₹1.5 lakh through credit line-2 at affordable interest rates. Women beneficiaries get a 2% interest concession under credit line-2, which helps them build their own income.

Micro Finance Scheme of NMDFC - Introduction

Micro Finance Scheme of NMDFC brings financial stability to members of self help groups who often live in remote villages and urban slums. This scheme supports those from minority communities who struggle to get traditional bank loans. Through this scheme, you can secure funding for small-scale income-generating projects such as handicrafts, small shops, or food processing.

The scheme works through two primary credit lines to keep things flexible for your needs. Under credit line-1, you can access up to ₹1 lakh at a 7% interest rate. Credit line-2 allows up to ₹1.5 lakh at a 10% interest rate, with a 2% interest concession available for women. These funds help you grow your business and improve your family's earning capacity.

Key Information

Benefits

You get cheap, affordable credit made for minority communities. This funding helps bridge the gap for small business owners who do not have large collateral but have strong business skills.

Eligibility

To qualify for this support, your group must meet these requirements:

• Your group must work as a Self Help Group (SHG) or Thrift and Credit Group (TCG) with members mainly from notified minority communities.
• At least 75% of your group members should belong to notified minority communities. The remaining 25% may include people from weaker sections like Scheduled Castes, Scheduled Tribes, Other Backward Classes, or persons with disabilities. In special cases, groups with 60% minority members are also considered.
• Your annual family income should not be more than ₹3 lakh for credit line-1 or ₹8 lakh for credit line-2. For example, if Ramesh earns ₹2.5 lakh a year and is part of a qualified SHG, he qualifies for credit line-1.
• Your SHG should have a solid, proven record of savings and lending activity for at least six months.
• You should not be a defaulter on any previous loans.
• Your group should use the loan strictly for income-generating activities like petty trade, service enterprises, or food processing.

Exclusions

This scheme excludes people from beyond the six notified minority communities. Also, if your annual family income is more than ₹3 lakh under credit line-1 or ₹8 lakh under credit line-2, you are not eligible for that support.

Application Process

You should apply through the State Channelizing Agencies (SCA) named by your state government or through banking partners like Canara Bank and Punjab Grameen Bank. You can find your nearest SCA list at NMDFC SCA list.

Documents

1. Group resolution allowing the loan under Micro Finance Scheme of NMDFC.
2. Detailed list of group members with their minority status and Aadhaar numbers.
3. Recent photographs of all members.
4. Minority certificate or a self-declaration for each minority member.
5. Income certificate for each member issued by a competent authority.
6. Valid proof of residence such as an Aadhaar card, voter ID, or ration card.
7. Proof of the SHG group bank account linked to Aadhaar and individual passbooks.
8. Updated records of thrift and credit activity for the past six months.
9. Registers including the meeting register, savings ledger, and loan ledger.
10. A clear business activity plan detailing how you will use the funds.
11. A signed affidavit or self-declaration confirming you have not received other micro finance support.

References

NMDFC Lending Policy

FAQ's

Who can benefit from the Micro-Finance Scheme of NMDFC?

Members of self help groups who belong to minority communities and take up small trades benefit the most, especially those who find it hard to get traditional banking.

How much loan can a member or group get under this scheme?

Under credit line-1, each member can get up to ₹1 lakh, with a total of ₹20 lakh per group. Under credit line-2, each member can access up to ₹1.5 lakh, totaling ₹30 lakh per group.

What are the interest rates and repayment period?

Credit line-1 charges 7% per annum. Credit line-2 charges 10% for men and 8% for women. You have three years to repay, including a three-month initial moratorium period.

What are the eligibility conditions for SHGs?

Your SHG must have at least 75% minority members and show proof of credit and savings activity for at least six months before applying.

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