Details

Looking for financial support for your small business or income-generating venture? The National Minorities Development and Finance Corporation (NMDFC) has a Micro Finance Scheme designed to help Self Help Groups (SHGs) from minority communities.

What Is This Scheme?

The NMDFC Micro Finance Scheme is a credit facility that provides loans to members of Self Help Groups (SHGs) and Thrift and Credit Groups (TCGs). It's specifically aimed at individuals from minority communities, especially women in rural areas and urban slums, who often find it difficult to get loans from regular banks.

Who Can Benefit From This Scheme?

This scheme is for groups where most members belong to minority communities. It's a great opportunity for those looking to start or expand small businesses like petty trading, handicrafts, food processing, or service-based enterprises.

Why This Scheme Is Important

Access to credit is crucial for small entrepreneurs. This scheme empowers minority communities by providing them with affordable loans, fostering financial independence and economic growth. It focuses on supporting those who might otherwise be excluded from formal banking channels.

Objective

This scheme offers loans of up to Rs. 1.5 lakh per member to Self Help Groups (SHGs) from minority communities, with special concessions for women, to support income-generating activities.

Benefits

The gas produced from biogas plants can be used for cooking, and high-quality compost manure can also be obtained as a byproduct.

The grant for establishing biogas plants is payable as follows:

1 cubic meter – ₹17,000/-
2–4 cubic meters – ₹22,000/-
6 cubic meters – ₹29,250/-
8–10 cubic meters – ₹34,500/-
15 cubic meters – ₹63,250/-
20–25 cubic meters – ₹70,400/-

The estimated cost of a small biogas plant is approximately ₹40,000/-, and the department provides a grant of ₹22,000/-.

Sources and references

Guidelines (Page No. 174)

Eligibility Criteria

The scheme is for Self Help Groups (SHGs) or Thrift and Credit Groups (TCGs) whose members are from minority communities.
At least 75% of the group members must belong to notified minority communities. Up to 25% can be from weaker sections like Scheduled Castes, Scheduled Tribes, Other Backward Classes, or Persons with Disabilities.
Groups with a minimum of 60% minority members might be considered in special cases.
Individual beneficiaries must have an annual family income not exceeding Rs. 3.00 lakh for Credit Line–1 and Rs. 8.00 lakh for Credit Line–2.
The SHG must have a good track record of saving and borrowing for at least six months.
Beneficiaries should not have any outstanding loans from other schemes.
Loans must be used for income-generating activities like small businesses, handicrafts, food processing, or services.
Preference is given to women's groups and those located in rural or minority-concentrated areas.

How To Apply

The application process is typically managed through the Self Help Groups (SHGs). Interested SHGs need to submit their loan applications along with all required documents to the relevant NMDFC office or its implementing agencies. For specific application links or offline submission details, please refer to the official NMDFC website.

Official Address for NMDFC:

National Minorities Development & Finance Corporation,
8th Floor, Conference Hall,
Further Extension Building,
New Delhi – 110001

Official Website: https://www.nmdfc.org/

Documents Required

A formal resolution from the group approving the loan from NMDFC.
A list of all group members, including their minority status and Aadhaar numbers.
Recent photographs of all group members.
A minority certificate or self-declaration for each member belonging to a minority community.
Income certificate for each member, issued by the appropriate authority.
Proof of identity and address: Aadhaar card, Voter ID, or Ration Card.
Bank account details: Proof of the SHG's group account (linked with Aadhaar) and individual bank passbooks.
Evidence of saving and credit activities maintained by the group for at least six months.
The group's Meeting Register, Savings Ledger, and Loan Ledger.
A plan or list detailing the proposed income-generating activities.
An affidavit or self-declaration confirming that the group is not receiving similar financial assistance from any other microfinance source.

FAQ’s

What is the maximum loan amount a group can get?

Under Credit Line–1, an SHG can receive up to Rs. 1.00 lakh per member, meaning a group of 20 members can get up to Rs. 20.00 lakh. For Credit Line–2, each member can get up to Rs. 1.50 lakh, allowing a group of 20 members to avail up to Rs. 30.00 lakh.

What is the interest rate and how long do I have to repay the loan?

For Credit Line–1, the interest rate is 7% per year. For Credit Line–2, it's 10% for men and 8% for women. You generally have three years to repay the loan, with an initial three-month period of no repayment (moratorium).

Can I apply if I am not from a minority community?

Yes, the scheme primarily targets minority communities, but up to 25% of group members can belong to other weaker sections like Scheduled Castes, Scheduled Tribes, Other Backward Classes, or Persons with Disabilities. In certain cases, groups with at least 60% minority members may also be considered.

What kind of activities can the loan be used for?

The loan is meant for income-generating activities. This includes starting or expanding businesses like petty trading, handicrafts, food processing, or various service enterprises.

How long does an SHG need to have been active before applying?

Your Self Help Group (SHG) should have a satisfactory track record of saving and credit activities for at least six months before you can apply for a loan under this scheme.

Is there an income limit to be eligible for this loan?

Yes, there is. For Credit Line–1, your annual family income should not exceed Rs. 3.00 lakh. For Credit Line–2, the limit is Rs. 8.00 lakh per year for the family.

What proof do I need to show for my minority status?

You will need to provide a minority certificate issued by a competent authority or a self-declaration for each member belonging to a minority community. The group also needs to provide a list of members with their minority status confirmed.

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