Minorities in India as per National Commission for Minorities Act, 1992 are Muslims, Christians. Budhhists, Sikhs and Parsis. As per 1991 census, these communities constitute about 17.5% of the total population of the country numbering about 14.8 Crores.
Dr. Gopal Singh in a study report on Minorities submitted to the Government in 1983 has clearly brought out that amongst poorest of the poor Minorities Communities constitute the majority.
After independence, Government of India has launched a number of poverty alleviation schemes and programmes. Nationalistion of Banks was also a step in this direction. In fact, the Nationalised Banks were focused as major source of credit for agriculture, traditional trades and artisan activities. Dr. Gopal Singh report revealed that Minorities have not been able to obtain their share of credit from Nationalised Banks as per their requirement. This situation led to the concept of having a separate financing agency for Minorities in the form of National Minorities Development & Finance Corporation (NMDFC). NMDFC was incorporated under the aegis of Ministry of Social Justice & Empowerment, Govt of India on the 30th of September 1994 under the Section 25 of the Companies Act – 1956 with the main objective to promote economic development of the poorer section of Minorities.
The aims & objective of NMDFC are given below :
> To promote economic and development activities for the benefit of “Backward Sections” amongst the Minorities, preference being given to the occupational groups and women.
> To assist, subject to such income and/or economic criteria as may be prescribed by the Government from time to time, individuals or groups of individuals belonging to the Minorities by way of loans and advances for economically and financially viable schemes and projects.
> To promote self-employment and other ventures for the benefits of Minorities.
> To grant loans and advances at such rates of interest as may be determined from time to time in accordance with the guidelines or schemes prescribed by the Central Government or by the Reserve Bank of India.
> To extend loans and advances to the eligible members belonging to the Minorities for pursuing general/ professional/technical education or training at graduate and higher level.
> To assist the up-gradation of technical and entrepreneurial skills of Minorities for proper and efficient management of production units.
> To assist the State level organisations dealing with the development of the Minorities by way of providing financial assistance or equity contribution and in obtaining commercial funding or by way of refinancing;
> To work as apex institution for coordinating and monitoring the work of all corporations/ boards/ other bodies set up the State Government/Union Territory Administrations for, or given the responsibility of assisting the minorities for their economic development.
> To help in furthering the Govemment policies and programmes for the development of Minorities.
The target groups for NMDFC with regard to direct benefits will be persons belonging to Minority Communities and living below double the poverty line. At present, minority Communities as per National Minorities Commission Act 1992 are, Muslims, Christians, Sikhs, Buddhists and Parsis Families having annual income less than Rs. 40,000/- in rural and Rs. 55,000/- in urban areas are categorized as below double the poverty line.
Financial Assistance Scheme
NMDFC has two channels to reach the ultimate beneficiaries; one through State Channelising Agency (SCA) nominated by respective State/UT Government and another through the Non-Governmental Organization (NGO). Accordingly, financial Assistance Programmes of NMDFC are of two types one through the SCAs and another through the NGOs. Details of loaning schemes under these two programmes are as given below :
- SCA Program
- Term Loan Scheme
Under the Term Loan Scheme, projects costing upto Rs. 5 lacs are considered for financing to individual beneficiary, NMDFC provides loan to the extent of 85% of the project cost subject to a maximum of Rs. 4,25,000/-. The remaining cost of project is met by the SCA and the beneficiary has to contribute minimum of 5°/o of the project cost.
The statement of rate of interest of Term Loan Scheme is as given below :
|Loan Limit||Rate of Interest|
|Upto Rs. 5.00 Lacs||6%|
The Loan is required to be repaid by the beneficiaries over a period of 5 years.
Assistance under Term Loan Scheme is available for commercially viable & technically feasible ventures which for sake of convenience are classified into following sectors :
- a) Agriculture & Allied.
- b) technical Trade.
- c) Small business.
- d) Artisan & Traditional Occupations.
- e) Transport & Service Sector.
Click on either of above indicated sectors for getting an illustrative, though not exhaustive list of scheme belonging to that sector.
- Margin Money Loan Scheme
Margin Money assistance is provided to beneficiaries availing Bank Finance, Generally Public Sector Bank finance for 60% of the project cost and seek 40% margin from the beneficiaries. Under Margin Money Loan Scheme, NMDFC provides the eligible beneficiaries loan to meet the requirement of the margin asked by the bankers. For this purpose, loan upto 25% of the project cost subject to the maximum of Rs. 1.25 lacs per unit is made available. The SCA and the beneficiary are expected to contribute jointly 15% of the project cost with minimum of 5% share of the beneficiary.
Recently, NMDFC has also introduced the provision of refinance in the operation of Margin Money Loan Scheme with a view to provide timely assistance to beneficiaries seeking bank finance.
|Loan Limit||Rate of Interest|
|Upto Rs. l,25,000/-||3%|
The Loan is required to be repaid by the beneficiaries over a period of 5 Years.
- Margin Money Loan Scheme
During the year, 2003-2004, NMDFC has introduced the scheme of Educational Loans with the objectives to facilitate job-oriented education amongst the weaker section of the minorities. The scheme envisages maximum loan of Rs. 75,000/-for pursuing professional and technical courses of duration not exceeding 2 years. Funds for this purpose are made available to the SCAs at interest rate of I °/o for lending to the beneficiaries at 3%. The loan is repayable maximum in five years after completion of the course.
- NGOs Programme
- Micro Credit Scheme
NMDFC has very recently launched scheme of Micro Financing on the pattern of Grameen Bank of Bangladesh and Rashtriya Mahila Kosh under the Department of Women and Child Development, Ministry of Human Resources Development in our own country. The Scheme envisages micro credit to the poor sections among the target group through selected NGOs of proven bonfires and their network of Self Help Groups. It is an informal loan scheme which ensures quick delivery of loan at the door-steps of the beneficiaries with a constant follow up. It also envisages as a prerequisite that the beneficiaries are first organised into Self Help Groups and get into the habit of effecting regular savings, however, small. Under the scheme loans maximum upto Rs. 25.000/- per beneficiary is provided. Funds are then made available to NGOs at an interest rate of 1% which they further lend to the beneficiaries at interest rate of 5%. The repayment period for the loan is 36 months with a moratorium of 3 months repayment of principal amount.
- Interest free loans for promotion of SHGs
Financial assistance in the form of interest free loan is provider to the NGOs for promotion of Self Help Groups (SHGs). The maximum amount of loan available is Rs. 2.15 lacs for promotion of 50 SHGs of about 1000 members. The loan is payable after one year and is adjusted by way of grant at the rate of 25% of the loan advanced by the SHGs and 5% on their growth of savings (provided the growth in savings is at least 10% over the last year.
The main channel available to NMDFC to reach the ultimate beneficiaries is through the State Channelising Agencies (SCAs) nominated by respective State /UT Government. Except the States of Arunachal Pradesh and GAO, NMDFC has its Channelising Agency in all other States and UTs. However, SCAs in the State/UTs of Meghalaya, Sikkim, Andaman & Nicobar, Lakshdweep, Dadra Nagar Haveli, Daman & Diu have not become operational States of J&K, Kerala, M.P., Mizoram, Tamil Nadu and Nagaland have more than one Channelising Agency. 12 States have set up Exclusive Minority Development Corporation. Following is the list of Channelising Agencies of NMDFC in the country.
List of State Channelising Agencies of NMDFC – Please go through the website: www.nmdfc.org.
Procedure for availing financial assistance
- a) Under SCAs programme, persons amongst the targeted groups interested in availing NMDFC loan have to apply to the Channelising agencies of their state. Generally each Channelising Agency has an office at the District Level. Information about the same can be obtained from the office of the District Collector/Deputy Commissioner. It will be appropriate to apply to the District Level Office. The selected beneficiaries are required to execute loan agreement deed, mortgage deed for the fixed assets with the SCA and whenever necessary provide for security of the loan. On completion of these formalities, the loan is provided to the beneficiaries either directly by the SCA or through it’s District Office.
- b) Under NGOs programme, the NGOs desirous of availing NMDFC’s Micro Financing Scheme or Interest Free Loan for promotion of Self Help Groups will have to submit proposals on prescribed application form available from NMDFC. In case the NGO is found eligible and suitable for availing NMDFC financial assistance, and if required office of NMDFC will visit the NGO for verification of it’s record and activities. In case it is found to be genuine and bonfires, a sanction letter will be issued to the NGO giving details of terms and conditions to the financial assistance. The NGO will have to approach NMDFC for drawl of funds as per the sanction accorded.
Frequently asked questions
Ques. What are the financial assistance schemes of NMDFC ?
Ans. SCAs Programme
- i) Term Loan Scheme
Under the Term Loan Scheme, projects costing up to Rs. 5 lacs are considered NMDFC provides loan to the extent of 85% of the project cost subject to a maximum of Rs. 4,25,000/-. The SCA and the beneficiary meet the remaining cost of project, however the beneficiary has to contribute minimum of 5% of the project cost.
- ii) Margin Money Loan Scheme
Margin Money assistance is provided to beneficiaries availing Bank Finance. Generally Public Sector Bank finance for 60% of the project cost and seek 40% margin from the beneficiaries. Under Margin Money Loan Scheme, NMDFC provides the eligible beneficiaries loan to meet the requirement of margin asked by bankers. For this purpose, up to 25% of the project cost subject to maximum of Rs. 1.25 lacs per unit is made available. The SCA and the beneficiary are expected to contribute the remaining amount.
iii) Educational Loan Scheme
NMDFC has recently introduced its Educational Loan Scheme with the objective of facilitating job-oriented education among the weaker sections of minorities. The loan is available for short duration (Up to a maximum of 2 years) professional and technical courses having good employment potential. Maximum loan of Rs. 75,000 is given to the eligible persons belonging to minorities. The loan is available at 3% interest and is repayable in a period of 5 years after 6 months from completion of the course or getting employment, whichever is earlier. The scheme is implemented through the State Channelising Agencies of NMDFC.
- i) Micro Credit Scheme
Short-term loan of Rs. 6000 per beneficiary and medium term loan maximum up to Rs.10000 per beneficiary is provided through the network of SHGs and NGOs.
- ii) Interest Free Loan for Promotion of SHGs
Interest free loan maximum of Rs. 2.15 lacs is available to the NGOs for promotion of stabilisation of 50 SHGs having about 1000 members.
Ques. How does NMDFC reach the beneficiaries ?
Ans. NMDFC has two channels to reach to the ultimate beneficiaries, (i) through the State Channelising Agencies (SCAs) nominated by respective State/UT Government; generally each Channelising Agency has an office at district level where the beneficiary is required to make formal application. And the other channel is through the network of NGOs and SHGs for micro credit.
Ques. What is the rate of interest structure for NMDFC’s schemes ?
Ans. > Term Loan up to Rs. 5 lacs is provided at interest rate of 6%.
> Under Margin Money Scheme loan up to Rs. 1.25 lacs is provided at 3%.
> Under Micro credit, the funds are provided to NGOs at interest rate of I % for further lending to SHGs and beneficiaries at 5% interest.
Ques. What are the activities of NMDFC ?
Ans. i) Provision of finance for income generating activities at concessional rate of interest, through the State Channelising agencies.
- ii) Providing Micro Finance to the poorest of poor among minorities through NGOs.
iii) Providing Educational Loans to persons belonging to minorities.
- iv) Organisation of vocational training programme.
- v) Design development and marketing assistance to artisan and craft persons.
Ques. Does NMDFC ask for any security for its loan ?
Ans. The funds are lent to the State Channelising Agencies against State Government Guarantee while the funds are provided to NGOs based on their financial strength and credit worthiness.
For more details please go through our Website : www.nmdfc.org or
Contact Registered Office
1 Taimoor Nagar, Opp. D-996,
New Friends colony,
New Delhi 110 065
Ph.: 011-26 32 60 51-59, 26 32 56 52-53
Email: [email protected]