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National Bank for Agriculture & Rural Development (NABARD)

NABARD is an apex institution accredited with all matters concerning policy, planning and operations in the filed of credit for agriculture and other economic activities in rural areas.

It promotes research in the fields of rural banking, agriculture and rural development.

NABARD operates throughout the country through its 28 Regional Offices and one Sub-office, located in the capitals of all the states/union territories. It has 336 District Offices across the country, one Sub-office at Port Blair and one special Cell at Srinagar. It also has 6 training establishments.

Financial Schemes of NABARD

Potential Schemes for NGOs

  1. National Programme for Rural Industrialisation (NPRI)

The National Programme for Rural Industrialisation (NPRI) was launched with a mission to set up 100 rural clusters every year for the next five years to give a boost to rural industrialisation.

Objective of NPRI

Strengthening of existing clusters and development of new clusters in exceptional cases towards sustainable competitive advantage through technology upgradation/transfer, raw material access, skill development, managerial inputs and credit support, market support.

Role of VAs/NGOs

Tile identified NGOs will act as the nodal agency for implementing the project, its close rapport with them is very important particularly in identification, planning, monitoring and assessing the development of clusters from the artisans’ point of view.

NABARD also ensures involvement of banks and different Govt. departments in implementing

its programme.

  1. District Rural Industries Project (DRIP)

NABARD has launched an integrated area-based credit intensification programme in collaboration with Government, Banks and other development agencies with district as a focus known as District Rural Industries Project (DRIP).

Objective : Creation of significant number of sustainable employment opportunities in rural areas through enhanced credit flow to RNFS with complementary financial and non-financial promotional support.

List of DRIP Districts Phase VII (2004 – 05)

Orissa – Sambalpur, M.P. – Vidisha, Balaghat, A.P. – Srikakulum, Chitoor, West Godawari, Gujarat – Bharuch, Raiasthan – Bikaner, Jodhpur, Maharashtra – Latur, Kamataka – Bellang, Shimoga, U.P. – Jaunpur, Bahraich, Farukabad, Tamil Nadu – Kanyakumari, Assam – , West Bengal – Murshidabad, Hoogly, Punjab –  , Haryana – Rewari, Kerala – Kozhikode, Himachal Pradesh -, Chattisgarh – Mahasmund, Jammu & Kashmir -, Uttranchal – Almora, Jharkhand -East Singhbhum, Bihar – Bhoj pur, Nalanda

Important Components /Strategies

>  Conduct of Detailed Potential Survey of the District.

>  Strategy meets at District & State level.

>  Sensitisation of the Functionaries of Project Partners – Govt /Banks/NGOs/VAs/DAs.

>  Goal Oriented Project Planning (GOPP) Workshop at the District Level.

>  Training of the officials of Primary Lending Institutions. (PLIs).

>  Preparation of DRIP Action Plan.

>  Dovetailing of DRIP Action Plan with Service Area Plans (SAPs) of Banks.

>  Adoption of Cluster Approach.

>  Awareness creation / skill upgradation amongst Entrepreneurs.

>  Technology Upgradation / Transfer.

>  Focus on implementation of Credit-linked Promotional Programmes through NGOs/ VAs/DAs.

>  Encouraging Credit Delivery Innovations.

>  Monitoring the progress closely through Project Coordination & Guidance Committees (PCGCs) at the district and state level.

Role of NGOs / VAs

  1. Associating as Co-partners in achieving the goals set out under DRIP.
  2. Taking up implementation of Credit-related Promotional Programmes viz., Training-cum-Production Centres (TPCs), Conduct of Rural Entrepreneurship Development Programmes (REDPs), Setting up of Mother Units, Common Service Centres, Artisan Guilds, Assistance to Rural Women in Non – Farm Development (ARWIND), Marketing / Technology Development interventions, Rural Development Communications, Linking of Self Help Groups, etc.
  3. Providing Escort Services to the potential entrepreneurs trained under REDPs.
  4. Playing Catalytic role in boosting RNFS and propagating DRIP message.


  1. Rural Entrepreneurship Development Programme (REDP)


Promotion of Non-Farm Sector in rural areas is one of the thrust areas of NABARD. Over the years, NABARD has evolved and experimented number of promotional programmes for development of Rural Non-Farm Sector. Rural Entrepreneurship Development Programme (REDP) is one of the important NFS promotional programmes supported by NABARD for diversification of village industries with a focus on creating sustainable employment and income opportunities in a cost effective manner for the benefit of educated unemployed rural youth.


Developing entrepreneurial and activity-oriented skills among unemployed rural youth by assisting Voluntary Agencies (VAs)/Non-Govemmental Organisations (NGOs) /Development Agencies (DAs) with good track record to conduct REDP, for those willing to set up small/micro-enterprises.


REDP comprises of 3 distinct phases, viz., pre-training, training and post-training phase. The success of the programme depends on the strict adherence to these phases.

Eligible Institutions

NABARD provides promotional assistance to capable agencies with good track record and professional competence to successfully implement REDPs. The agency should satisfy the following broad criteria:

  1. It should be a legal entity. Its officials should not be the office bearers of any political party / or elected members of any legislative body.
  2. It should have been working in rural areas, at least, for three years.
  3. It should have necessary professional and organisational competence to plan, execute and monitor REDPs.
  4. It should have exclusive trained and qualified trainer-cum-motivator as a permanent employee.
  5. It should have the required minimum training infrastructure to conduct the programme effectively.
  6. It should have good rapport with banks, local administration / people and possess grass-root level linkage.
  7. It should be prepared to conduct REDPs in the approved manner so as to achieve good success rate.

Micro Finance Development Fund (MFDF)

A separate fund for promotion and development of Micro Finance sector in India was established in NABARD in April 2000 with a start-up-contribution of Rs. 1000 million. NABARD has further contributed Rs. 149 million from its operational surpluses during the last four years to the corpus.


The broad objective of the Fund is to support development and expansion of financial services to the rural poor, particularly women and vulnerable sections bypassed by the formal financial system. The specific objectives include taking appropriate measures for scaling up SHG-Bank Linkage Programme and facilitating development of other players in the MF sector.

Activities to be supported

Broadly the following activities would be covered:

> Training SHGs / other Micro Finance Group / individuals.

> Inland training on MF approaches for staff of stakeholders including NGOs, MFIs, banks, NABARD, government personnel, etc.

> Support towards training and systems management.

> Supporting Self Help Promotion initiatives.

> Building an appropriate data base and supporting development of such a data base.

> Engagement of professionals.

> Action research, studies and documentation.

> Dissemination through different media and publication of MF literature.

> Building regulatory and supervisory mechanisms.

Eligible Institutions

Following types of structures, community based organisations and institutions as approved by the Board are eligible for support from the Fund:

> SHGs and other community based organizations.

> NGOs and Micro Finance Institutions.

> Self Regulatory Organisations (SROs) Commercial Banks, Regional Rural Banks, Cooperatives and any other rural financial institutions.

> Training and Research Institutions.

Rural Non-Farm Sector Schemes (RNF)

(With gratitude from book published by NABARD – Patna Office)

Promotion of Rural Non – Farm Sector

NABARD recognizes promotion as an important function for expanding the choices available to rural entrepreneurs. The promotional strategy is recognized as a useful and essential adjunct to the core refinancing function of NABARD. Besides, it also provides opportunities to test different hypothesis to learn what works and what does not and also provides a forum for interacting with agencies having a shared commitment.


A large number of NGOs have realized the importance of income-generating activities for the rural poor and have diversified into enterprise promotion through training and savings and credit programmes through the groups. Many NGOs have been able to develop a close and enduring relationship with the rural people. These NGOs articulate the local people’s needs and aspirations and translate them into effective action plans and implement them with people’s active participation. As a strategy for development of rural micro enterprises, NABARD has, therefore, been involving NGOs/VAs and other development oriented organisations in its efforts to improve the access of rural micro-enterprises to credit and non-credit facilities and linkages.

The objective of NABARD’s promotional programmes is to generate or enhance opportunities for livelihood both in terms of income and employment in rural areas in a sustainable, demonstrative and cost-effective manner. The major promotional concepts evolved by NABARD and implemented in partnership with Voluntary Agengies (VAs), Developmental Agencies (DAs) over the last few years are :

> Training-cum-Production Centre (TPC).

> Rural Entrepreneurship Development Programme (REDP).

> Training for / by Master Craftmen (TMC).

> Market-Oriented Training (MOT).

> Artisan Guilds (AG).

> Mother Unit.

> Common Service Centre (CSC).



> GOI scheme for IDRI.



> Assistance for Rural Women in Non-Farm Development (ARWIND).

> Assistance for Marketing of Non-Farm-products of rural women (MAHIMA).

  • Flexible/Catalytic Approach.

Rural Non-Farm Sector (RNFS) Objective

> To be in constant touch with emerging needs for credit in rural areas for small industrial and service enterprises and respond adequately with financial packages to meet such needs both by way of refinance and direct finance.

> To promote in an experimental way rural entrepreneurship and enterprises in collaboration with promotional and developmental agencies sharing such a commitment.

> To introduce a bias in credit delivery and other promotional means in favour of women, weaker sections and resource poor regions.

> To bring about an awareness on environmental impact of rural credit projects.

> To disseminate NABARD’s experiences on financing Mid promoting RNFS, and

> To facilitate a policy environment conducive to the above objectives.

General Criteria / Conditions for Promotional Support

The promotional programmes are experimental in nature and intended for learning lessons on the suitability and reliability of different concepts. NABARD will, therefore be very selective in sanctioning such programmes. The promotional support would be provided by NABARD strictly on merits, on a case-by-case basis, taking into account the feasibility of the project as well as the track record, commitment and capability of the NGO / VA / DA concerned.

Eligibly Institutions

The NGOs/VAs/DAs satisfying the following requirements would normally be considered eligible for promotional support.

> The organisation should be a legal entity;

> It should have been working in the rural area, at least, for three years;

> its accounts should have been audited regularly;

> It should not discriminate on the basis of religion, caste sex or race;

> its Office bearers should not be office bearers of any political party;

> It should have the professional competence to plan, manage, monitor and document the experiences in the implementation of the project.


Generally, the NFS programmes should be implemented in ‘rural areas’ as defined in the NABARD Act, 1981 (i.e. area comprised in any village irrespective of population and also in any town, the population of which does not exceed 50,000)

Credit Linkage

All the promotional programmes are credit-linked i.e. the financial support provided by NABARD will have to be supplemented by bank loan. The NGOs/VAs/DAs should, therefore, involve the banks in the projects proposed to be implemented by them and indicate in the project proposal, the details of the credit tie-up being arranged (e.g. name of the bank, assistance proposed, whether consent, in principle, to support the proposal has been received from the bank, etc.)


NABARD lays emphasis on close and effective monitoring of the promotional projects. The implementing agency should ensure regular follow-up and monitoring with the necessary extension services to the beneficiaries to achieve the ultimate objective of the concerned promotional programme. The programmes will be monitored by a committee set up in consultation with the NABARD Regional Office concerned and through the submission of periodic monitoring reports by the implementing agency to NABARD in the prescribed formats.

Where to Apply ?

In Bihar the applications for NABARD’s assistance under the promotional programmes may be forwarded to the Chief General Manager NABARD, Regional office Maurya lok Complex ‘B’ Block, Dak Bunglow Road, P.B. No. 178 Patna-800 001 The applications shall contain all necessary details, information concerning the agency, proposed project, etc. on the lines indicated in Appendix In other states, NGOs/VAs should contact Regional Office of NABARD in their state.

Promotional / Developmental Programmes Under NFS

  1. Training – cum – Production Centre (TPC)
  1. Introduction

Training -cum-Production Centre were basically aimed at imparting training to the rural entrepreneurs in different aspects, such as technological development, quality control in market trends, financial and labour management, etc. to ensure emergence of the rural tiny manufacturers as successful entrepreneurs.

  1. Target Group

(i) Rural youth with very limited formal education or technical skills (ii) Population of low income groups

(iii) Women     (iv) Tribals

  1. Eligible Institutions

(i) Reputed Voluntary agencies      (ii) Charitable trust

(iii) Development undertaking of the government

(iv) Trusts sponsored by industrial groups

(v) Educational institutions with experience in vocational training.

  1. Nature of Assistance

Cost of trainer, honorarium to guest speakers, rent for hall, boarding/lodging expenses, and stipend to trainees, quarters/dormitory for trainees, plant & machinery. Cash loss and other expenses for the first year may be borne by NABARD as a grant. Revolving fund assistance with moderate service charges.

  1. Process

Survey to select the activities & product lines for training having an expanding market identification of potential entrepreneurs from the local areas.

Train them in particular craft/activity.

Coach them in related aspects, such as quality of finished product, marketing outlets, bookkeeping etc.

Supply the requisite kit to the trainees for setting up individual units of their own. Nursing of such units by the agencies for some time through assistance in the form of technical guidance, supply of raw material, marketing etc.

  1. Structure of a proposal for seeking, grant assistance for TPC
1.    Introduction Origin of the project / methodology.
2.    Background Genesis of the Agency/background/experience/location / target group/success of previous programmes.
3.    Project area Background of the area/location, facilities & potential available.
4.    Survey If so, report thereof.
5.    Selection of activities Justify the selection from long term marketability.
6.    Project profile Appropriate project profile envisaging self sufficiency within 3 to 5 yrs.
7.    Investment Minimum necessary investment in capital goods with focus on labour intensive mode of production.
8.    Operational results Projected operational result for each year upto 5 years.
9.    Selection of trainees Criteria duration of the course, incentive available.
10.  Training method Source off acuity, course modules, involvement of DIC & Banks.
11.  Fundings Details of funding, capital cost working, Capital recurring deficit for initial years.
12.   Implementation Procurement of goods & Services, recruitment of staff, deployment of training, operation of TPC, follow up, monitoring & evaluation.
13.  Arrangement for continuation of the centre after “aid period’ To achieve viability self sufficiency after aid period.
14.  Benefits Direct/indirect benefit i.e. impact of the project on quality of rural life.
15.  Monitoring Programmes Supervision/monitoring mechanism of ongoing.


  1. Rural Entrepreneurship Development Programme (REDP)
  1. Introduction

VAs/NGOs are provided grant assistance for conducting REDPs to motivate rural youth with certain basic skills to start income generating enterprises. The selected agency, apart from the tarring inputs, also concentrate in providing escort services and post training follow-up to help the trained prospective entrepreneurs to become an independent entrepreneur with his/her own manufacturing unit.

  1. Target Group

Rural youth with certain basic skills of hand or technology.

  1. Eligible Institutions

Voluntary / promotional Agencies.

  1. Nature of Assistance

Cost of Training, i.e. salary to trainer, rent of venue, honorarium to guest speaker, boarding/lodging to trainers, stipend, cost of stationary, cost of post-training monitoring and other related expenses may be borne by NABARD as grant (more details given earlier)

III. Training of and by master craftsment

  1. Introduction

For upgradation and refinement of technical skills of practicing artisans/craftsmen, the necessary training is given by master craftsmen to them in a traditional and informal style, i.e. “Guru-Sishya” way. Such training is also extended to master craftsmen themselves for upgradation of their skills and familiaring them with the latest designs and technologies appropriate to rural areas and emerging market trends in a specialised institution.

  1. Target Group

(a) Small groups of rural artisans and craftsmen staying in the vicinity of master craftsment.

(b) master craftsmen.

  1. Eligible Institutions

Voluntary agencies, public charitable trusts and organisations of government.

  1. Market – Oriented Training (MOT) for Rural artisans
  1. Concept / Objective

To impart specialized training to rural entrepreneurs to improve their production efficiency in terms of quality of the products and productivity as also for product diversification and for linking them with procurement / marketing agencies.

  1. Strategy

Enable select organizations, having considerable experience in marketing rural products, to organize the training programme for rural entrepreneurs.

  1. Eligible Institutions / Agencies

NGOs as also government promotional organizations and private agencies having experience in the marketing of rural industrial products or intending to take up such marketing or market development activities.

  1. Eligible Items for Grant

Tools and equipments, stipend and other training costs including cost of creating common facilities, on a selective basis.

  1. Semfex-ll
  1. Introduction

The Directorate General, Resettlement, in collaboration with NABARD, has formulated Semfex – II scheme to provide gainful self-employment opportunities to ex-servicemen beneficiaries.

  1. Target Group

(a) Ex-servicemen     (b) Disabled Service personnel

(c) War widows    (d) Windows of ex-servicemen

  1. Purpose

To encourage ex-servicemen for setting up of village, cottage, tiny and small scale industries in rural areas.

  1. Nature of Schemes

(a) Composite loan upto Rs. 2.00 lac.

(b) Integrated loan upto Rs. 15 lac.

(c) Construction of workshed upto 25% of the composite loan.

(d) Agro – industrial unit’s upto SSI limit on schematic basis.

(e) Soft loan assistance for margin money for all farm and non-farm activities except SRTO.

(f) Project formulation & consultancy charges.

(g) Financing of small road transport operators.

  1. Artisan Guild
  2. Introduction

It is an organisation of widely and thinly dispersed artisans to consolidate their bargaining power. It will also bring the artisans together and to inculcate in them a sense of self-help and mutual help to enable them to identical their business needs, problems faced by them and to bring out ways & means to overcome them. The active membership of a guild should not be less than fifty (50).

  1. Target group

Unorganised and scattered artisans.

  1. Sponsoring Institutions

(a) Reputed Voluntary organisation

(b) Promotional bodies of the Govt.

(c) Commercial Banks, Co-operative Bank & RRBs

(d) Corporate bodies

(e) Academic Institutions.

  1. Nature of Assistance

(a) Grant of acquiring essential productive assets for common use as also managerial assistance.

(b) Maximum grant – Rs. 10.00 lakhs per guild.

(c) 100% refinance for loans in excess of grants on merit basis.

VII. Mother Unit

  1. Introduction

A mother unit is an organisation which orients the production of several smaller units in accordance with the changing market preferences and help make the production economical through development of market oriented skills, bulk purchase of raw materials, improvement of products and productivity, quality control, common brand name, introduction of better technology, machines and tools, improving marketing arrangement, etc.

  1. Target Group

(a) Small Enterprises

(b) Satellite Units

  1. Eligible Institutions

(a) An association of producers

(b) A voluntary agency

  1. Nature of Assistance

(a) Grant may be given by NABARD to voluntary agencies for a acquiring plant & machinery, mainly for imparting training, cost of erection of shed, cost of training to the entrepreneurs, quality control equipments and other related equipments etc.

(b) 100% refinance may be given upto Rs. 15.00 lakhs in respect of each satellite unit ancillary

VIII.  Common Service Centres

  1. Introduction

The concept of common service centres has been introduced to improve the competitiveness and bargaining power of the cluster units through the establishment of a support system that facilitates their operations on an economic scale besides orienting their production and productivity in tune with the changing market preferences.

  1. Eligible Agencies

(a) Voluntary Agencies

(b) Non-Governmental Organizations

(c) Registered Institutions

(d) A Co-operative Society Association of the Units

  1. Types of Assistance

(A) Grant assistance is available to cover the following items.

(i) Preliminary /Pre-operative expenses including market survey.

(ii) Organisational/Administrative expenses including salary of one or two professionals for a limited period.

(iii) Expenses on design development and quality control.

(B) Loan assistance.

  1. Agriculture and Rural Enterprises Incubation Fund (ARIF) Venture Capital Fund.
  2. Introduction

The fund is introduced by NABARD as a special assistance with a view to encouraging entrepreneurs to adopt innovative ventures involving new technologies for any activity in farm and non-farm sectors in rural areas.

  1. Objectives

(i) To finance innovative rural enterprises adopting appropriate technologies in farm and non-farm sectors.

(ii) To issue guarantees for the borrowing by voluntary agencies / NGOs’ providing support services including technology dissemination, marketing, input supply, credit, etc. to rural enterprises.

  1. Eligible Institutions

(i) Any person or group of persons whether incorporated or not for incubation assistance.

(ii) All institution eligible for refinance from NABARD.

(iii) Voluntary Agencies/Non-Govermmental Organisations for issue of guarantees.

  1. Mode of Assistance

Assistance from this fund may be granted –

(a) to provide refinance to banks.

(b) to provide direct incubation assistance to entrepreneurs to adopt innovative ventures in rural areas under Farm/Nor-Farm sectors.

(c) to issue guarantees to bank for the borrowing of VAs/NGOs supporting rural enterprises.

(d) in any other form as decided by NABARD from time to time.

5.   Service interest Charges Pre Development Phase Post Development Phase
(1) Direct Incubation Assistance 9% 14% (Export Oriented Unit)

15% (Other)

(2) Refinance
(1) NABARD to Bank 4.5% p.a. 9.5% p.a. for EOU

10.5% p.a. (others)

(2) Bank to Borrower 9% p.a. 14% p.a. for EOU

15% p.a. for other

  1. Guarantee

(i) Maximum 90% of the principal amount.

(ii) A guarantee fee of half of 1% p.a. will be payable by VA/NGO.

  1. Assistance to Rural Women in Non-Farm Development (ARWIND)
  1. Introduction

The scheme is mainly to support economic activities in non-farm sector on cluster/group basis by rural women.

  1. Mode of refinance

(a) Credit Component– Any reputed VA/Women Development Corporation, KVIC/KVIB institutions, any other recognised institutions may evolve scheme to organise rural women group for undertaking productive activities in non-farm sector and assist them in setting up their own units and provide other backward/forward linkage including training. A maximum loan of Rs. 5,000 per member or maximum Rs. 10.000 lakhs for a group of 20 may be given by any bank.

(b) Promotional component – Financial grant to a limited number of organisations may be considered for organising groups, supervision, sensitisation/training programme, skill development, etc.

  1. Quantum of assistance

(a) 100% automatic refinance for loans upto Rs. 15.00 lakhs to women’s group.

(b) For loans more than Rs. 15.00 lakhs and upto SSI level, sanction of 100% refinance will be on schematic basis.

(c) If proposal involve both refinance as well as grant, the agency have to seek prior sanction from NABARD through the bank.

  1. Area Plan Rural Instrialisation (APRI)

APRI is a potential linked block plan or area plan for financing the high potential rural industries through the banking system on a cluster/group/area approach basis. In this concept, the block/area is selected, industrial potential survey is conducted to identify and list out 4-5 predominant industrial activities having good potential for development. Then an action plan for 4/5 years is prepared and discussed with bankers and other developmental agencies. NABARD may consider extending its grants assistance to the Nodal Agency undertaking the APRI project. The assistance will be given for acquisition of common facilities, cost of training, technology transfer, skill up gradation, market research and development, brand name as well as for organisational and administrative costs for the initial period upto 5 years. Refinance rates under NFS in respect for APRI areas.

(i) All schemes other than schemes under pre sanction procedure – 100% refinance.

(ii) Schemes under the sanction procedure -75% refinance.

XII. Govt. of India Scheme for Intensive Development of Rural Industries

The Govt. of India, Ministry of Industry had launched a scheme for intensive development of rural industries envisaging setting up of industrial units with involvement of NGOs/VAs as nodal agency with financial assistance provided t)y way of grant by the Govt. of India and credit support from banks. Under the scheme, grant assistance of 10% of the total project outlay subject to a maximum of Rs. 25 lakhs is available to the selected NGOs, the remaining amount is to be provided as bank credit. The Govt. of India grant will be sanctioned and released to the NGOs, approved by the screening committee of GOI, Ministry of Industry, department of SSI and ARI through NABARD which is also entrusted with the responsibility of scrutiny and sanction of the project. The eligible items of grant assistance for formulation of project, training, marketing support, construction of common facility centre/design development centre, work sheds, purchase of tools and machinery etc. Some of the NGOs may like to formulate suitable project proposals and submit the same to our concerned Regional Office.

XIII. Assistance for marketing of non-farm products of rural women (Mahima)

Concept / objective

An exclusive scheme for extending credit and credit – linked promotional assistance to agencies dealing with marketing of non-farm products produced by rural women with a view to giving a fillip to their efforts for creating a ‘niche’ or ‘pro-women’ market.


Under the scheme, 100% refinance upto Rs. 15 lakh will be granted to banks under Automatic Refinance Facility (ARF). Promotional, assistance in the form of grant of RFA will be provided by NABARD to the agencies towards meeting promotional needs and incubatory expenses in connection with provision of forward and backward linkages and other marketing services.

Implementing Agencies

VAs / NGOs, Registered Institutions including Co-operatives, Federations of Marketing Organisations and other organisations engaged in the business of marketing women’s products.

Assistance Available From NABARD

In addition to refinance assistance to banks against credit provided to the agencies, promotional – assistance, subject to a general ceiling of Rs. 2.5 lakhs or 25% of the minimum sale turnover, which ever is lower, will be provided to the Agencies, NABARD’s ‘Soft Loan Assistance for Margin money Scheme’ for entrepreneurs will also be open to the agencies availing of credit facilities from the banks under the scheme. Under the Margin Money Scheme, NABARD provides interest -free refinance to the banks to meet margin money requirements of the agencies for which banks could stipulate service charge of 3% p.a.

XIV. Flexible / Catalytic Approach

Concept / objective

The approach aims at promoting non-farm enterprises for creating sustainable employment opportunities in rural areas in a cost-effective manner through voluntary agencies with a proven track record in rural enterprise development and employment generation. Instead of suggesting to the implementing VA, a pre-defined concept and approach in all details, the programmes of the VA fitting into the broad objectives of NFS promotion of NABARD can be supported.


The support will be for programmes to be implemented within a maximum period of five years aimed at facilitating establishment or modernization of rural non-farm enterprises. The programmes should lead to credit flow to enterprises through banks and thereby generate sustainable employment opportunities in rural areas in a cost effective manner.

Assistance available from NABARD

NABARD may provide refinance to banks for the credit component of the project. The grant support may cover expenses of the VA for providing production and marketing support, market information, technology transfer, supply of raw material, training and extension, etc. as also expenditure on salary and incidental expenditure of one or two professional recruited by the VA for implementing the project.

Other Relevant Aspects

The grant component will have a relationship with the number of rural employment opportunities generated on a sustainable basis and the quantum of bank credit required. The implementing agency shall contribute its share in any farm, including land, manpower, etc. at least, to the extent of 10% of the project cost.

Annexure – II

Application Format

The project proposals seeking assistance under NABARD’s promotional programmes shall contain essential details on the following aspects:

The Agency

1.1      Name and full address of the promotional agency

1.2      Names of promoters/Board of Directors / Trustees

1.3      Constitution

Copies of the following to be attached :

* Registration Certificate

* Bye-laws / Articles of Association

* Annual Report / Audited Balance Sheet / Income and Expenditure Accounts for the last three years.

1.4      Activities presently under taken by the agency and the area of operation

1.5      Whether in receipt of assistance (grant or loan) from any other agency, and if so, the details there of

1.6      Experience of the Agency in promoting income generation / employment / livelihood opportunities, imparting training, providing linkages, etc.

The projects details

2.1      Name of the project

2.2     Area proposed to be covered

2.3     Target group (SC/ST/Women/general) and number of persons to be covered.

2.4     System of identification of beneficiaries

2.5     Type of project [e.g. Training-cum-Production Centre (TPC) / Rural Entrepreneurship Development Programme (REDP) / Mother Unit (MU) / Common Service Centre (CSC), etc.]

2.6     Activities to undertaken (The details with reference to type of project)

Financial Details

3.1      Project outlay (item / activity-wise break-up to be given)

3.2     Source of funds (item / activity-wise)

* Bank * NABARD   * Own Fund

4      Capacity of the Agency to implement the project (the existing/proposes infrastructure and manpower support, experience expertise and their adequacy to be indicated).

Tie – up with Banks

5.1      Estimate of the credit needs of target group

5.2     How is it proposed to be met

5.3      Sponsorship / association of banks – to be specified

5.4     Technical feasibility and financial viability/ bank ability of the individual unit with item-wise cash flow for the project period.

Follow-up / monitoring proposed

6.1     Constitution of Monitoring Committee

6.2     Holding of meetings

6.3     Provision of escort services

6.4     Submission of periodic progress reports in the prescribed preformed

Expected overall impact of the project – output indicators – years (be Quantified)

7.1     Flow of Credit

7.2     Employment generation

7.3     Incremental income

For More Details Please Contact Nearest NABARD Office in your District or Region or Write of Head Office