The objective of the Scheme would be to provide prompt and need based refinance to Banks/RRBs for the projects funded or sanctioned to SC entrepreneurs for setting up Greenfield enterprises under Stand-up India Scheme requiring investment of above Rs.10.00 lakh and up to Rs.30.00 lakh per unit/profit centre.
NSFDC would align its Term Loan Scheme to provide loans of above Rs.10.00 lakh and up to Rs.27.00 lakh per unit/profit centre under project costing maximum up to Rs.30.00 lakh per unit to Scheduled Caste entrepreneurs availing funds from Banks/RRBs under Stand-up India Scheme.
(ii) Eligibility for PSB/RRB
All PSBs and RRBs which have signed Memorandum of Agreements (MoA) with NSFDC or which will enter into MoAs in future shall be eligible to avail funds under the scheme. The following additional conditions are to be fulfilled by the Regional Rural Banks (RRBs) based on their Annual Accounts:
(a) Net Non-performing Assets (NPA) of the RRBs should be less than 10% for the preceding financial year.
Average net NPA for the last 05 financial years should be less than 10%. Further, out of these 05 years, the net NPA of the RRBs should be less than 10% each year, for at least 03 years.
(b) RRBs should have profit in the last financial year.
RRBs should be in profit for at least any 03 out of last 05 financial years.
(c) RRBs should not be defaulter of any Regulatory Body.
(iii) Eligibility for Target Group
(a) Applicants should belong to Scheduled Castes.
(b) Applicant should not be defaulter to any bank/financial institution.
(c) Loan under this scheme shall be available for only green field enterprises in the manufacturing or services or trading sector owned by Scheduled Caste entrepreneurs as proprietors and partnership firms. In case of Partnership Firms, all the partners should belong to Scheduled Caste community.
(d) The Cabinet Note on setting up of NSFDC prescribes the following course of action while stipulating the income criteria to be adopted for the beneficiaries for covering them under NSFDC Schemes:
“In case of certain type of activity, it may be difficult to restrict the beneficiaries to any particular income criteria and in fact in certain cases, it may be difficult to even restrict their operations to SCs & STs only. Thus, for example, funding of SC/ST shopkeepers to obtain licences from Fair Price Shops will enable all areas to be served. Similarly,
agricultural or industrial inputs, if arranged by the Corporation, would be available to all the consumers. Where direct subsidy is built into any scheme, this would be restricted to SCs/STs below the poverty line, however, arranging loans for business, agriculture or industry may be extended to SC/ST beneficiaries even if they are slightly above the poverty line to enable them to reach self-sustained level. In such cases, loans may be extended to SC/ST beneficiaries with income up to twice the poverty line, but, without any element of subsidy.”
However, the Stand-up India Scheme has been launched by Government of India to encourage Scheduled Caste entrepreneurs without any income criteria. Therefore, Banks which are implementing agencies are not mandatorily collecting any income details from the applicants under the Scheme. Since providing refinance to Scheduled Caste entrepreneurs covered by Banks under Stand Up India will enable them to access loans at a comparatively cheaper interest rates under NSFDC’s Term Loan Scheme besides ensuring outflow of funds, as a special case, NSFDC may consider to provide refinance to Scheduled Caste entrepreneurs covered under the Stand-up India Scheme.
(iv) Nature of Loan
The loan shall be in the nature of Term Loan only to meet requirement of assets such as Plant and machinery, Miscellaneous Fixed Assets etc.
(v) Unit Cost & Quantum of Assistance
The project cost limit would be Rs.30.00 lakh per unit/profit centre. NSFDC’s Term Loan would be limited to Rs.27.00 lakh per unit. However, the norms for the promoters own contribution will be the same as followed by the Banks/RRBs.
(vi) Interest Rate
The pattern of charging interest under the scheme shall be as follows;
Amount of Loan (NSFDC’s Share) Interest Per Annum chargeable to PSB/RRB Beneficiaries
Rs.10.00 lakh & up to Rs.20.00 lakh
Above Rs.20.00 lakh & up to Rs.27.00 lakh
(vii) Repayment period
The repayment period and moratorium period shall be as per the Bank/RRB’s sanction terms to the unit appraised and financed by them under Stand-up India Scheme.
(viii) Social Priorities
The PSB(s)/RRB(s) shall endeavor to cover target groups in accordance with the priorities laid down as under:
(a) Educated unemployed/under-employed 50%
(b) Women 40%
(c) Others 10%
The social priorities are indicative in nature.