Micro Finance Scheme

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Objective :

There is a need to target small and mid size agriculturist, self employed personnel, entrepreneur; not so much as a measure of poverty alleviation but as a measure of productivity/efficiency building mechanism to support the greater goal of overall development of the North Eastern India. From experience it has been found that the micro credit needs of these target groups can be reached much more effectively by involving the services of the intermediaries, who can understand the needs, demand and local situations.

Hence, NEDFi has been working towards developing & supporting NGOs/Voluntary Agencies (VA)s with good track record for on-lending to the "needy" for taking up any income generating activities in the rural areas. The program envisages extending financial assistance to NGOs/VAs for on-lending to the people for self-employment projects that generate income, allowing them to care for themselves and the families.
 

Eligibility Criteria of the MFIs:

Well managed MFIs such as registered NGOs/VAs/Cooperative Societies, NBFC-MFIs are eligible for submitting their pre-screening information if they fulfil the following criteria:
 

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The MFI should be in existence for at least 3 years

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The MFI should have experience in Microfinance with good performance track record and portfolio quality

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The MFI should have good credibility record

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The MFI should have proper systems and procedures

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The MFI should have adequate financial management ability with proper system of book keeping

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The MFI should have experience in developing SHG/JLGs.

Terms & Conditions

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The MFIs should utilize the fund only for the Income generation purposes of the ultimate borrowers

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NEDFi would lend the amount at Prime Lending Rate (PLR) + 0.5 % (administrative charge).

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Processing fee to the extent of maximum of 1% of loan amount will be charged

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MFI shall have to comply with RBI norms

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Repayment period by the NGO would depend on the projects. Maximum period is 5 years including a reasonable moratorium period.

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MFI shall provide collateral security in proportionate percentage of loan amount as stipulated by the sanctioning authority


Security:

  • Hypothecation of all the movable assets of the NGO.
  • Promissory note from the NGO.
  • Personal Guarantee of the chief functionaries.

Documentation:

  • Loan Agreement.
  • Deed of Hypothecation.
  • Promissory Note.