The credit-based schemes for Scheduled Castes (SC) offer opportunities for financial assistance through microcredit finance. These schemes aim to empower SC individuals by providing access to credit for various income-generating activities.
Details on Micro Credit Finance
Microcredit is a small loan given to people with low income, usually in less developed countries, to help them start their own businesses or grow their existing businesses. It is often referred to as microlending or microloan. This practice began in Bangladesh and is popular in many parts of the developing world. Microcredit schemes often use a group borrowing model, pioneered by Nobel Prize winner Muhammad Yunus and his Grameen Bank. Lets a have a look at Credit Based Schemes For SC.
Unit Cost
| Criteria | Values |
| Unit Cost | Up to ₹ 1,40,000/- |
| Quantum of Assistance | Up to 90% of the Project Cost |
| Interest Rate per annum | SCAs – 2%<br>Beneficiaries – 5% |
Tips and Best Practices
Selecting a Micro Credit Scheme
| Consideration | Description |
| Interest Rates | Compare the interest rates of different schemes. Choose one with the lowest rate to save money. |
| Loan Amount | Check how much money you can borrow. Make sure it’s enough for what you need. |
| Repayment Terms | Look at how long you have to pay back the loan, and if there are options that make it easier for you. |
| Reviews | Read what other people say about the scheme. It helps to know if they had a good experience. |
| Support | Check if the scheme offers help or advice on how to use the loan effectively. |
Managing Loan Repayments
- Make a budget: Know how much you can afford to pay back each month.
- Save regularly: Put aside a little money regularly to ensure you can make the repayments.
- Communicate: If you are struggling to make repayments, talk to the lender. They might be able to help.
Utilising Funds Efficiently
- Have a plan: Know what you are going to use the money for before you get the loan.
- Avoid unnecessary expenses: Don’t spend the money on things you don’t really need.
- Track spending: Keep an eye on where the money is going, so you know it’s being used wisely.
Future Prospects
Trends and Innovations
Micro-credits are changing with time. People are coming up with new ideas to make it better. For example, now you can apply for micro-credits through mobile apps! Keep an eye on these trends, as they can make the process easier or offer better terms.
Scaling and Expansion
As your small business or project grows, you might need more support. Micro-credits can sometimes be increased if you show that you are doing good with the money. This means you can grow your business or project without having to worry about finding more funds elsewhere.
Resources
Links to Government Schemes
The government sometimes offers special micro-credit plans. They often have better terms than regular ones. Check government websites or ask at local government offices to find out what options are available. It’s like asking your community leaders for advice on getting a loan.
NGOs and Non-profit Organisations
There are groups called NGOs (Non-Governmental Organisations) that help people, too. They sometimes offer micro-credits, especially to people who want to make a positive change in their community. They are like community helpers who don’t work for the government.
Tools and Calculators
Before you take a micro-credit, it’s good to know exactly what you’re getting into. There are tools and calculators online that can help you understand how much you will have to pay back. It’s like doing the maths before spending your money, so you know you can afford it.
Benefits
Financial Assistance
Small income-generating activities can receive financial assistance of up to 90% of the project cost, with a maximum amount of ₹1,40,000.
The interest rate applicable for this assistance is 5%.
Repayment Period:
- The loan must be repaid within 3 and a half years
- Repayment is done in quarterly instalments starting from the date of each disbursement, including the moratorium period.
Moratorium Period:
A moratorium period of 3 months is provided before the repayment of the loan begins.
Note:
Once the loans under the Micro-Credit scheme are repaid through the relevant SCAs (State Channelising Agencies), eligible beneficiaries can avail of any loan under the NSFDC (National Scheduled Castes Finance and Development Corporation) scheme
Eligibility
The programme is intended for business owners from the Scheduled Caste Category.
Application Process
Interested eligible individuals should approach the nearest Channelling Agency for more information.
- Loan applications should be submitted by Scheduled Castes individuals with an annual family income up to ₹3.00 lakhs to the District Offices of State Channelizing Agencies (SCAs).
- SCAs review and forward viable project proposals to NSFDC (National Scheduled Castes Finance and Development Corporation) for sanction.
- Eligible individuals can also submit their loan applications to other Channelizing Agencies partnered with NSFDC, such as Regional Rural Banks, Public Sector Banks, and NBFC-MFIs.
- Project proposals are appraised by the Project and Banking Desk and reviewed by the Project Clearance Committee (PCC).
- Approved proposals are recommended for sanction, and Sanction Letters (LOIs) with Terms & Conditions are issued to the respective agencies.
- After accepting the terms and conditions and fulfilling Prudential Norms, funds are disbursed to the agencies for onward disbursement to beneficiaries.
- Disbursement of funds is made by NSFDC upon demand from the agencies.
- Beneficiaries repay the loans as per the repayment schedule provided by the SCAs.
Documents Required
- Aadhaar Card
- Income certificate
- Caste certificate
- Bank account statement
FAQs
What is the moratorium period?
The moratorium period is a specified time during which borrowers are not required to make loan repayments.
Does the scheme provide loans to all Scheduled Castes persons?
Yes, the scheme provides loans to Scheduled Castes persons meeting the eligibility criteria, which says, the families that earn up to 3 lakhs are only eligible.
How does the scheme provide assistance?
The scheme provides assistance through financial loans for various purposes, such as business expansion or asset creation.
With what type of projects can I avail this scheme?
You can avail of this scheme for a wide range of projects, including small income-generating activities and business ventures.
