MICRO FINANCE

MICRO FINANCE 

  1. SELF HELP GROUP (SHG) BANK LINKAGE PROGRAMME
  2. SCHEME FOR FINANCING MATURED SHGs FOR FARM PRODUCTION AND INVESTMENT ACTIVITIES
  3. SHG CREDIT CARD SHG GOLD CARD
  4. SBT RURAL HOUSING LOAN SCHEME (BHAVANSHREE)
  5. SCHEME ON SANITATION (BHAVANSHREE)
  6. FINANCING OF JOINT LIABILITY GROUPS (JLGs)
  7. FINANCING MICRO FINANCE INSTITUTIONS (MFIs) / NON GOVERNMENT ORGANISATIONS (NGOs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. SELF HELP GROUP (SHG) BANK LINKAGE PROGRAMME

 

ELIGIBILITY

a. Members should be preferably between 10 to 20.

b. Members should be preferably have a homogenous background and interest.

c. The group should have an active existence of at least 6 months.

d. Group should successfully undertaken savings & credit operations from its own resources.

e. The group should function in a democratic manner and participation to be given to all members in decision-making.

f. The interest of Voluntary Agencies (VAs) / NGOs in the group must be evident.

g. The Bank should be convinced of the genuineness of the group formation and objectives.

h. The group should devise a code of conduct viz-a-viz a) periodicity and the amount to be saved by any member b) purpose for which loan can be given c) rate of interest to be paid on savings / charged on advances.

PURPOSE

There is no list of ‘eligible purpose’. The purpose for which the group will lend to the members should be left to the common wisdom of the group.

AMOUNT OF LOAN

The loan amount is 1:1 to 1:4 based on the savings accumulated by the group. The Branch Manager can sanction / recommend more.

RATE OF INTEREST

Interest rates ranges from 1.50% to 2.50% below BPLR for various limits.

SECURITY

No primary / collateral

REPAYMENT

Repayment period based on the activities undertaken by members.

 

 

2. SCHEME FOR FINANCING MATURED SHGs FOR FARM PRODUCTION AND INVESTMENT ACTIVITIES

 

ELIGIBILITY

SHGs which are three years old or have availed a minimum of two cycles of bank loan and repaid successfully (Matured SHGs).

PURPOSE

Term Loan and Cash Credit limit sanctioned for farm production and investment activities covering agriculture sector and allied activities.

Illustrative list of Activities that could be considered for financing to matured SHGs.

I. Agriculture:

1. Crop under normal banking arrangements or under Contract Farming.

2. Fruit crops.

3. Ornamental plants.

4. Aromatic plants.

5. Vegetable crops.

6. Medicinal plants.

7. Sericulture.

8. Farm Forestry.

9. Agro Forestry.

II. Other Activities allied to Agriculture:

1. Animal Husbandry - Goatery, Piggery, Sheep Rearing, etc.

2. Fisheries including tank / pond on lease.

3. Apiculture

4. Mushroom cultivation

5. Seed production

6. Agro food processing units - making Papad, Pickles Jams etc.

7. Custom hiring activities in Agriculture

8. Agriculture inputs trading

AMOUNT OF LOAN

The matured SHGs may prepare a credit plan for each of its members and aggregate of that is to be submitted by the SHG to the bank.

RATE OF INTEREST

Interest rates ranges from 1.50% to 2.50% below BPLR for various limits.

SECURITY

NIL.

REPAYMENT

Repayment period based on the activities undertaken by members, maximum 5 years.

 

 

3. SHG CREDIT CARD SHG GOLD CARD

 

ELIGIBILITY

All matured SHGs who have

(i) developed proper group dynamics, viz., conduct of meetings, feelings of belongingness, regularity of internal lending, bookkeeping, transparency and democracy in election of office bearers, etc.,

(ii) reached third level of credit linkage and enjoying a credit limit of Rs.50000/-,

(iii) repayment in the earlier accounts must be regular, and

(iv) at least 2 of the group members should be literates to operate the account. 

Preference to be given to the groups pursuing economic activities.

PURPOSE

(a) To provide hassle-free loan to SHGs for internal lending for consumption as well as economic activity. 

(b) To enable SHGs and its members to take up micro enterprises / economic activity.

AMOUNT OF LOAN

Maximum credit limit permissible to SHG will be:

(i) 4 times the corpus of the SHG which include its savings , interest earned on internal lending and revolving fund, if any. 

(ii) Proposal for economic activity requiring higher quantum of finance, may be considered based on the viability of the proposal.

RATE OF INTEREST

Interest rates ranges from 1.50% to 2.50% below BPLR for various limits.

SECURITY

Hypothecation of the assets created out of the Bank loan.

REPAYMENT

The SHG credit Card / Gold Card will be valid for 3 years subject to satisfactory operation of the account and annual review.

Other distinguishing features.

SHG Credit Card:

(i) Credit limit: Minimum Rs.50,000/-

(ii)  Nature of credit facility: The credit facility is in the nature of cash credit.

(iii) The SHG can draw the eligible limit and credit the surplus as per their requirement within the drawing powers.

(iv) At the end of every year from the date of issuing of card, the limit should be reviewed and on such review branch may continue / enhance / reduce the limit depending upon satisfactory conduct of the account and the corpus available.

(v) When the facility is discontinued, the loan amount will be crystallized and usual steps will be taken for recovery.

(vi) No cheque book will be issued. Drawals to be effected by withdrawal slips. Any number of drawals and credits within the limit are permissible.

(vii) Rate of Interest: As applicable to SHG loans.

SHG Gold Card:

SHG Gold Card will be issued only for starting / carrying on economic / income generating activities.

(i) Credit limit: Minimum Rs.2,00,000/-.

(ii) Nature of credit facility: Will be sanctioned as a Term Loan facility with repayment schedules as per economic activity financed.

(iii) Rate of Interest: As applicable to SHG loans. 

Consumption credit component should be available in both cards.

 

 

4. KUDUMBASHREE MICRO HOUSING PROJECT FOR THE POOR (BHAVANSHREE) SBT RURAL HOUSING LOAN SCHEME

 

ELIGIBILITY

1. Beneficiaries should be members of SHGs / NHGs with at least 6 months experience in micro credit activities.

2. Loan will be provided only to those families who possess a minimum of 1.50 cents of land with clear title which can be taken as collateral security.

PURPOSE

The scheme is aimed at providing micro finance to the people living BPL for construction of houses.

To finance Self Help Groups for on lending to members for housing in rural areas for purchase or construction of a house including the housing needs for activities under taken by them. (Dairy shed, tailoring shed / shop, grocery stores etc.)

For the renovation or repair of an existing house / shed

AMOUNT OF LOAN

10 times the savings of the corpus of SHG / NHG.

This ceiling would include the loan outstanding in the limits already sanctioned to SHGs/NHGs. 

SHG/NHG will on lend to its members for housing subject to a maximum of Rs.50,000/- per member for purchase / construction of house.

RATE OF INTEREST

Interest rates ranges from 2.25% to 2.50% below BPLR for various periods.

SECURITY

Mortgage of land on which the house is constructed.

REPAYMENT

The repayment of instalment to be spread over a period of 15 years and the instalment amount to be fixed at monthly/quarterly/half yearly / yearly as is convenient.

 

 

5. SBT RURAL HOUSING LOAN SCHEME (BHAVANSHREE) - SCHEME ON SANITATION

 

ELIGIBILITY

Those are eligible to finance under "SBT Rural Housing Loan Scheme (Bhavanshree).

PURPOSE

Extension of existing pf existing house to construct twin-structure of toilet and bathing room.

AMOUNT OF LOAN

Maximum Rs.7750/-

RATE OF INTEREST

Interest rates ranges from 2.25% to 2.50% below BPLR for various periods.

SECURITY

Mortgage of land on which twin-structure of toilet and bathing room is constructed.

REPAYMENT

The repayment of instalment to be spread over a period of 15 years and the instalment amount to be fixed at monthly/quarterly/half yearly / yearly as is convenient.

 

 

6. FINANCING OF JOINT LIABILITY GROUPS (JLGs) OF TENANT FARMERS, SMALL FARMERS AND MARGINAL FARMERS

 

ELIGIBILITY

1. Members should be of similar socio economic status and background carrying out farming activities and who agree to function as a joint liability group.

3. The group must be organized by the likeminded farmers and not imposed by the bank or others.

4. The members should be residing in the same village / area and should know and trust each other well enough to take up joint liability for group / individual loans.

5. The members should be engaged in agricultural activity for a continuous period of not less than one year within the area of operations of the bank branch.

6. The group member should not be a defaulter to any other formal financial institution.

5. JLG should not be formed with members of the same family and more than one person from the same family should not be included in the JLG.

7. There is a need for a very active member of the group to ensure leadership role and ensure the activities of the JLG. The selection of a good / able / active leader for the JLG is an essential need which will ultimately benefit all the JLG members. However, care should be taken to ensure that benami loans are not cornered by the group leader.

PURPOSE

1. To augment flow of credit to tenant farmers cultivating land either as oral lessees or sharecroppers and small farmers who do not have proper title of their land holding through formation and financing of JLGs.

2. To extend collateral free loans to target clients through JLG mechanism.

To build mutual trust and confidence between bank and tenant farmers.

AMOUNT OF LOAN

Maximum amount of loan may be restricted to Rs.50000/- per individual.

RATE OF INTEREST

Interest rates ranges from 1.50% to 2.50% below BPLR for various limits.

SECURITY

No collaterals may be insisted upon against the loans to JLGs except mutual guarantee offered by the JLG members.

REPAYMENT

Repayment period based on the activities undertaken by members.

Schemes like Annapoorna, Rabit plus, Harithabhomi and Kamadhenu are available under JLG.

ANNAPOORNA

ELIGIBILITY

Activity clusters / JLGs preferably with 4 to 10 members predominantly farmers who make their livelihood through paddy cultivation.

PURPOSE

1. To meet the expenses of paddy cultivation in the lease land (Tenant cultivation) undertaken by the activity clusters on Joint Liability Group (JLGs) basis.

2. To meet the expenses of the paddy cultivation by the activity cluster member in their own land or in lease land under the direction of activity cluster / JLG.

AMOUNT OF LOAN

1. The quantum of loan to each cluster / JLG will depend on the acreage taken for cultivation.

2. Loan amount will be the maximum of Rs.2 lakh per acre per cluster with a cap of per head borrowing to Rs.50000/-.

RATE OF INTEREST

Interest rates ranges from 1.50% to 2.50% below BPLR for various limits.

SECURITY

1. Primary – Hypothecation of standing and future crops.

2. Collateral – The per head liability of the individual borrowers is considered as Rs.50000/-, as such no collateral security by way of mortgage of land is envisaged.

REPAYMENT

With in six months or on sale of produce whichever is earlier.

RABBIT PLUS

ELIGIBILITY

Self Help Groups / Joint Liability Groups consisting of 5 farmers each who are desirous of taking rabbit farming.

PURPOSE

1. To meet the cost of outer shed, hutches and cages for bunnies.

2. To meet the cost of breeder rabbit, feed cost, insurance and veterinary aid.

AMOUNT OF LOAN

Loan is to be sanctioned as Agriculture Term Loan with a limit of Rs.25670/-. The proposed cluster includes minimum of 5 members and loan per group will be 1,28,350/-

RATE OF INTEREST

Interest rates ranges from 1.50% to 2.50% below BPLR for various limits.

SECURITY

1. Primary – Hypothecation of assets created out of bank finance.

2. Collateral – Personal guarantee of group members.

REPAYMENT

The loan amount will be repaid with in 5 years in 16 quarterly instalments plus accrued interest. Gestation period 12 months.

KAMADHENU

ELIGIBILITY

Self help groups (Cluster units) / Joint liability (JLGs) with 7 to 10 members.

PURPOSE

1. Construction of cattle shed with strong flooring, purchase of two milch cows, cost of feed and utensils and veterinary expenses along with the setting up of a gobar gas plant.

2. Cost of heifer (Purchase of Calves aged 9 to 10 months) for bringing them up as cows, construction of cattle shed, miscellaneous initial expenses including insurance, feeding and husbandry cost  till the animal conceives (from 11 to 20 month) and its calving (from 21st to 30th month).

3. Purchase of one ‘malabari’ she-goat (with 2 to 3 kids), construction of barn, cultivation of fodder including Azolla, rearing expenses for 5 years and veterinary care and incidental expenses. (ii) Cost of 5 numbers of rabbits, construction of cage and for feeding and maintenance cost for 5 years.

AMOUNT OF LOAN

1. A term loan of Rs.50000/- can be sanctioned for meeting expenses related to purchase of milch animal, construction of shed etc. and for gobar gas plant.

2. A term loan of Rs.20000/- can be sanctioned for meeting the expenses related to purchase of heifer, construction of shed, feed, insurance etc.

3. A term loan of Rs.10000/- can be sanctioned for meeting expenses related to purchase of she-goat, construction of barn, cultivation of fodder etc

RATE OF INTEREST

Interest rates ranges from 1.50% to 2.50% below BPLR for various limits.

SECURITY

1. Primary- Hypothecation of assets created out of Bank finance.

2. Collateral- No collateral security is insisted other than group guarantee of the consortium members.

REPAYMENT

1. Milch Cow - 6 to 7 years including moratorium period, instalments to be paid monthly.

2. Heifer - 5 years - Moratorium 20 months, instalments to be paid monthly.

3. Goat & Rabbit rearing - In 5 years in half yearly instaslments

 

 

7. FINANCING MICRO FINANCE INSTITUTIONS (MFIs) / NON GOVERNMENT ORGANISATIONS (NGOs)

 

ELIGIBILITY

The NGO/ MFI to be eligible for financing under the scheme will have to be of any one of the following:

(i)    (i) Societies registered under Societies Registration Act, 1960 or similar State Act.

(ii)    (ii) Trusts registered under Public Trust Act, 1920 or similar Act.

(iii)   (iii) Companies registered under Companies Act, 1956 including Section 25 companies.

(iv)   (iv) Non Banking Financial Companies providing financial services to SHGs which satisfy the following criteria as laid down by RBI (vide master circular on Micro Credit, item 3, page 5 RPCD: MFFI.BC. No. 08/12.01.001/2007-08 dated 2nd duly 2007) may only be taken up for financing:

1) Engaged in micro financing activities

2) Licensed under section 25 of the companies Act, 1956. Which are not accepting public deposits from the purview of sections 45-IA (registration), 45-IB (maintenance of liquid assets) and 45-IC (transfer of profits to Reserve Fund) of the RBI Act, 1934.

3) Other terms and conditions as applicable to financing to NBFC as laid down by the Bank vide SIB Circular No. 34/04 dated 27th September, 2004 will also apply.

(v)   (v) Specialist and other Co-operatives such as Mutually Aided Co-operative Societies, etc.

(vi) Any other type of institution that offer micro finance and related services may be considered on merits.

PURPOSE

To enable the Bank to lend to MFIs / NGOs for on lending to SHGs. It will also enable the Bank to increase the outreach by financing large number of SHGs in a cost effective manner and supplement the efforts of the branches in financing SHGs

AMOUNT OF LOAN

Requirement of finance to be worked out based on the health of the NGO / MFI and the business plan as per the appraisal format

RATE OF INTEREST

Interest rates:1.50% below BPLR

SECURITY

(a)   Primary – Hypothecation of Book Debts of the NGO/ MFI.

(b)   Collateral – Nil. However, personal guarantee of the Promoters/ Directors and charge over other available assets may be taken if available.

REPAYMENT

(i)    (i) In case of Term Loan: monthly / quarterly / half-yearly. Instalments may be set depending on the project / purpose. However, total repayment period should not exceed 3 years.

(ii) Cash credit will be renewed annually.