Udyam Nidhi Yojana

 

1.         Introduction

Since 1989, NSFDC has been financing income generating schemes of the eligible Scheduled Caste beneficiaries for their socio-economic empowerment through State Channelizing Agencies (SCAs).  In order to expand outreach, NSFDC has also established alternate channel for on lending by signing Memorandum of Agreements (MoAs) with Public Sector Banks (PSBs), Regional Rural Banks (RRBs) and Other Institutions.

According to the NSSO survey of 2013, only 4% of small business units, mostly belonging to SC, ST and OBC get institutional finance. NSFDC intends to reach out such unbanked population of the target group through other financers at reasonable /moderate rates of interest for promoting sustainable livelihoods. NSFDC believes that partnering with other financing Institutions engaged in lending to eligible SC beneficiaries would be an effective and beneficial approach to promote collective action of the target group by adopting value chain approach in clusters, which can significantly contribute to economic empowerment of the target group. Efforts would also be made in collaboration with other development partners to mobilise assistance for improving product quality; marketing and developing value chains. Udyam Nidhi Scheme would be introduced in selected States/UTs during 2018-19.

2.         Objective

To provide prompt and need based Finance to eligible Scheduled Caste persons at reasonable rate of interest through Cooperative Societies and Cooperative Banks (Channelizing Agency-CA) to pursue small/micro business activities.

 

3.         Eligibility for Target Group

  1. The applicant(s) should be from the Scheduled Caste community.
  2. Annual Family income of the applicants should be up to Rs. 3.00 Lakh.
  3. Individuals, Self Help Groups (SHGs)/Joint Liability Groups (JLGs) are eligible to undertake income generating activities. However, proposals submitted by SHGs/JLGs shall be considered subject to the following:
  1. All the members of SHGs/JLGs belong to Scheduled Caste community.
  2. Annual Family income of each member/applicant is up to Rs. 3.00 Lakh.

 

4.         Eligibility criteria for Channelising Agency

The Cooperative Societies and Cooperative Banks (Channelising Agency- CA) fulfilling the following norms shall be considered eligible to avail financial assistance from NSFDC on refinance/reimbursement or project lending basis to the eligible target group:

 

  1. Cooperative Banks
  1. Net Non-performing Assets (NPA) of the CA(s) should be less than 5% for the preceding financial year.

Or

Average net NPA for the last 05 financial years should be less than 5%.Further, out of these 05 years, the net NPA of the CA(s) should be less than 5% each year, for at least 03 years.

  1. CA(s) should have 3 years of continuous profit track record.
    •  

CA(s) should be in profit for at least any 03 out of last 05 financial years

  1. CA(s) should not be defaulter of any Regulatory Body.
  2. Satisfactory Credit Opinion Report of funding organization in respect of the Cooperative society. 

 

  1. Cooperative Societies

 

  1. Central/State Government should be Stakeholder in the Share capital of the Cooperative society.
  2. Central/State Government should have nominated members in the Board of Directors/Governing Body of the Cooperative Society.
  3. Net Non-performing Assets (NPA) of the CA(s) should be less than 5% for the preceding financial year.

Or

Average net NPA for the last 05 financial years should be less than 5%.Further, out of these 05 years, the net NPA of the CA(s) should be less than 5% each year, for at least 03 years.

 

  1. CA(s) should have 3 years of continuous profit track record.
    •  

CA(s) should be in profit for at least any 03 out of last 05 financial years

  1. The CA should have credit rating of Adequate Safety equivalent to ‘A’ of CRISIL.  
  2. CA(s) should not be defaulter of any Regulatory Body.
  3. The CA(s) should not have defaulted in repayment of outside borrowings in the last three years or undergone a corporate debt re-structuring.
  4. Satisfactory Credit Opinion Report of funding organization in respect of the Cooperative society. 

 

  1. NSFDC & CA(s) RELATIONSHIP

The institutions fulfilling the eligibility criteria of NSFDC may be appointed to act as Channelizing Agency (CA) of NSFDC in the selected State/UT or pan India basis. The relationship between NSFDC and the CA(s) shall be governed and guided by contractual relationship by signing an Agreement between the parties strictly in accordance with the NSFDC Lending Policy and the terms and conditions of the Agreement.

 

  1. Security

            While seeking disbursement from NSFDC, CA (s) shall provide the following security to NSFDC for timely repayment of installments of the loan sanctioned under this Agreement together with interest thereon: -

Bank Guarantee/Fixed Deposit of Public Sector Bank in the name of “CA(s) account NSFDC” equivalent to the amount to be disbursed to them. The validity period of the Bank Guarantee/Fixed Deposit shall continue until all the dues of the NSFDC have been paid in full or otherwise fully discharged by the CA(s)

 

OR

CA(s) may provide Bank Guarantee/Fixed Deposit initially for the period of one year and the same may be renewed at least 10 days prior to end of the expiry period of the earlier one.

 

In case CA(s) has provided Fixed Deposit to the NSFDC, the interest thereon shall be payable to the CA (s).

 

In the event of default by CA(s) either for the whole or part amount advanced under this Agreement, the Bank Guarantee shall be invoked/the Fixed Deposits shall be encashed by NSFDC.

 

  1.  

The unit cost of the Project shall not exceed Rs.5,00,000/-.

 

  1. Quantum of Assistance

NSFDC's share shall be up to 90% of the project cost. The balance 10% shall be contributed by the Cooperative Society and/or beneficiaries. However, under refinance mode, NSFDC share will be up to 100%. 

 

9.         Interest Rate

            The pattern of charging interest under the scheme shall be as follows:

 

NSFDC to CA(s)

Interest Spread to CA(s)

CA(s) to Beneficiaries

4% p.a.

 

Up to 8%

Up to 12% p.a.

           

10.       REPAYMENT PERIOD

The loan amount shall be repaid in quarterly installments within a maximum period of six years from the date of each disbursement including the moratorium period and fund utilization period.

 

11.       UTILIZATION PERIOD

Funds utilization period under Project Finance is 120 days.  Under refinance mode the rate of interest is to be switched over from existing rate to applicable NSFDC rate within 30 days from the date of disbursement.

 

12.       MORATORIUM PERIOD

The moratorium period for both the modes i.e. Project Finance and Refinance is 3 months. However, there shall not be any moratorium period for the payment of interest. 

 

 

 

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Managed by: NSFDC Admin (rakhi.morwal@gov.in)
on 18 March, 2020