|
|
|
North |
Other
Regions |
|
|
|
|
Eastern |
|
|
|
|
|
Region |
|
|
|
|
|
including |
|
|
|
|
|
Sikkim
& |
|
|
|
|
|
A&N
islands |
|
|
|
Slab |
Loan
Size |
For
All |
MI
DLF, LD, WLD, |
FM/Agri-clinics |
|
|
|
Purposes |
SGSY,
SHG, SC-ST |
Cold
Storage/ |
|
|
|
|
ACTION
PLAN,OF, |
Rural
godown, |
|
|
|
|
Contract
Farming |
Rural
Housing |
|
|
|
|
under
AEZ*, A & M |
NFS
and others |
|
I |
Rs.50000 |
6.00 |
6.00 |
6.00 |
|
II |
From |
6.00 |
6.75 |
6.75 |
|
|
Rs.50001 - |
|
|
|
|
|
Rs.21 lakh |
|
|
|
|
III |
Above Rs. 2 |
6.00 |
6.75 |
7.25 |
|
|
Lakh |
|
|
|
(*) AEZ not applicable for SCARDBs.
MI‑Minor
Irrigation
DLF‑Dryland
Farming
LD‑Land
Development
WLD‑Wasteland
Development
SGSY-Swamajayariti
Gram Swarozgar Yojana
SHG‑Self Help
Groups
OF‑Organic
Farming
AEZ-Agri Export Zone
A&M Aromatic
& Medicinal Plants
Production Credit
NABARD provides short
term refinance for various types of production/ marketing/procurement
activities. Some of the major activities are:
(i) Seasonal Agricultural Operations
Seasonal Agricultural Operations covers such activities as are undertaken in the process of raising carious crops and are seasonally recurring in nature. The activities include among others, ploughing and preparing land for sowing, weeding, transplantation where necessary, acquiring and applying inputs such as seeds, fertilisers etc., and labour for all operations in the fields for raising and harvesting the crops.
|
Eligible Institution State Cooperative Banks (SCBs)
and Regional Rural Banks(RRBs) Nature of accommodation Cash Credit (July‑June) Period of credit Each drawal repayable in
maximum 12 months Rate of interest# 5.5% to 7%
for SCBs ‑depending on level of dependence NABARD refinance 7%
for RRBs |
#For Cooperative Banks in NER and Sikkim, R0I 5.5% irrespective of dependence level.
NABARD provides refinance facilities to SCBs/DCCBs for financing the production/procurement/marketing
requirements of Primary Weavers' Cooperative Societies (PWCS) and Apex/Regional
Weavers' societies.
While a major chunk of refinance at present flows to weavers in the
cooperative fold, NABARD also provides refinance to Commercial Banks and Sate
Cooperative banks for financing State Handloom Development Corporations (SHDCs)
to benefit the weavers outside the Cooperative fold.
|
Purpose |
Eligible Institutions |
Rate of Interest |
|
Financing of PWCS for Production and marketing
of cloth Procurement & marketing of cloth & supply of Yarn to primaries by Apex/Regional/WCS Working capital requirements of SHDCs |
SCBs SCBs SCBs/Commercial Banks |
7%@ 7.5% 7.5% |
@ For Cooperative Banks in NER, J&K, Sikkim and H.P.,
ROI 6.5%.
(iii) Financing of
Other than Seasonal Agricultural Operations (OSAO) of RRBs
NABARD provides refinance to RRBs for financing production and marketing activities of artisans (including handloom weavers) and village/cottage/ tiny sector industries as also for financing persons belonging to weaker sections and engaged in trade /business/service.
Nature of accommodation Cash Credit (July‑June) Period of credit Each drawal repayable in maximum 12
months Rate of interest 8%
(iv) Refinance for Marketing of Crops
In order to enable the farmers
to hold on to produce with a view to having opportunity to get remunerative
price for their produce, shot‑term
refinance from NABARD is available to State Cooperative Banks on behalf of
DCCBs.
Advances permitted against pledge of agricultural produce or outright
purchase of agricultural produce of cultivators by processing/marketing
societies. Under this facility, 100% refinance is available against loans
extended to societies/cultivators by DCCBs.
Period Upto
6 months Rate of interest 7.5%
(v) Refinance for
procurement, stocking and distribution of Chemical fertilisers
NABARD provides refinance to State Cooperative banks for (i) procurement, stocking and wholesale distribution by Apex societies and (ii) retail distribution fertiliser to farmers.
Period 120
days Rate of interest 10% ‑ Wholesale 8.5% ‑ Retail distribution
Other Refinance facilities
I. Conversion Assistance in
case of natural calamity
NABARD provides Medium Term credit limits to SCBs (on behalf of DCCBs) and RRBs for conversion of ST(SAO) loans due to crop damage by nature calamity. NABARD share in base level conversion effected by Cooperatives at 60% (III tier structure)/70% (II Tier structure) and 70% in case of RRBs.
Period 3
years in general Maximum Upto 7 years ROI Applicable
SAO rate (SCBs) Applicable SAO rate (RRBs)
II.
Long term loans to State Governments
NABARD provides long term loans to State Governments for contribution the share capital of cooperative credit institutions (SCBs/DCCBs/SCARDBs/ PCARDBs/PACS/FSS/LAMPS subject to certain conditions. The objective is to strengthen share capital base of cooperative credit institutions and thereby crease their maximum borrowing power to enable them to undertake larger lending programmes.
|
Period of loan 12 Years Rate of interest 9% |
Financing of State Handicrafts Development Corporations (SHnDCs)
NABARD provides refinance facilities to SCBs/Scheduled Commercial Banks for financing the working capital requirements of SHnDCs.
|
Eligible activities Production/procurement/purchase
and/or marketing handicrafts goods directly from the artisans and/or through their
organisation Period of loan Financial year (April ‑ March) Rate of interest 7.5% |
Financing of
Industrial Cooperative Societies (other than Weavers), labour contract
& Purest labour Cooperative Societies and rural Artisan members of PACS/FSS/LAMPS.
NABARD provides refinance facilities to SCB for financing Industrial Cooperative Societies (other than Weavers), labour contract & Forest labour Cooperative Societies and rural Artisan members of PACS/FSS/LAMPS.
|
Eligible Purposes Production
and marketing activities of cottage, village and small scale primary
industrial cooperative societies Marketing, manufacturing or processing goods
and/or collection and marketing of min forest produce/ 22 approved broad
groups cottage and small scale industries Rate of interest Apex societies 7.5% Primary
societies 7% |
Medium‑term (Non‑Schematic) to SCBs and RRBs
NABARD provides
Medium Term (Non‑Schematic) credit limits to SCB (on behalf of DCCBs) and
RRBs for financing approved agricultural investment purposes.
|
Eligible Purposes 22
approved agricultural purposes not covered under Automatic Refinance Scheme
(ARF) of Schematic lending Investment credit upto Rs.50,000‑ per
borrower provided to SF/MF for all approve, agricultural investment purposes
otherwise covered under the ARF scheme of NABARD could also be covered under
MT (NS). Period of loan 3‑5 years in general Rate of Interest 7% |
Investment Credit (Medium and Long Term) Refinance Mission
Accelerated rated Private
Capital Formation to Promote
Sustainable and Equitable
Agriculture and Rural Prosperity with Refinance as Lever
Model Schemes for Various Purposes
(i) Institutions Eligible for Refinance:
·
State Co‑operative Agriculture &
Rural Development Banks (SCARDBs)
·
Regional Rural Banks (RRBs)
·
State Co‑operative Banks (SCBs)
Commercial Banks (CBs)
·
State Agricultural Development Finance
Companies (ADFCs)
·
Primary Urban Co‑operative Banks
(ii) Purposes:
·
Farm Sector:
Investment in agriculture and allied activities such as minor
irrigation, farm mechanisation, land development, soil conservation, dairy,
sheep rearing, poultry, piggery, plantation/horticulture, forestry, fishery
storage and market yards, bio‑gas and other alternate sources of energy
sericulture, apiculture, animals and animal driven carts, agro‑processing,
agro‑service centres, etc.
·
Non‑Farm Sector:
Investment activities of artisans, small‑scale industries, tiny
sector village and cottage industries, handicrafts, handlooms, powerlooms, etc
(iii) Loan
Period :
·
Upto a maximum of 15 years
(iv) Refinance
Windows .
1.
Automatic Refinance Facility (ARF ‑ FS
& NFS): Release of refinance without prior sanction for refinance limit
upto Rs.20,Iakh.
2. Project based lending.
(v) Criteria
for Refinance
·
Technical Feasibility of the project
·
Financial viability and bankability
·
Organisational arrangements for credit
supervision
(vi) Ultimate
Beneficiaries
Although refinance is provided to SCARDBs/SCBs/CBs/RRBs/ADFCs/PUCBs, the ultimate beneficiaries of investment finance may be individuals, proprietary/partnership concerns, companies, state‑owned corporations or cooperative societies.
(vii)
Quantum of Refinance (w.e.f.01.12.2000)
(%
of bank loan)
|
Sr.No. |
Purpose/Sector |
Financial
Institution |
|||
|
|
|
SCARDBs |
SCBs |
RRBs |
CBs |
|
I |
North
Eastern Region |
|
|
|
|
|
|
And
Sikkim |
|
|
|
|
|
|
(Arunachal Pradesh, Assam, Manipur, |
|
|
|
|
|
|
Meghalaya, Mizoram, Nagaland & Tripura |
|
|
|
|
|
|
As well as Sikkim) |
|
|
|
|
|
a. |
SC/ST Action Plan Waste land development, |
100 |
100 |
100 |
100 |
|
|
Dry land development, ARWIND, MAHIMA, |
|
|
|
|
|
|
SHG, Margin Money Scheme |
|
|
|
|
|
b. |
Non Farm Sector |
100 |
100 |
100 |
100 |
|
c. |
All other purposes |
95 |
90 |
90 |
90 |
|
II. |
Other Regions |
|
|
|
|
|
1 |
SC/ST Action Plan. ARWIND, MAHIMA, SHG |
100 |
100 |
100 |
100 |
|
2
a |
Wasteland development schemes where
individuals |
|
|
|
|
|
|
are the beneficiaries |
|
|
|
|
|
|
i)
Nursery Schemes} |
|
|
|
|
|
|
ii)
Farm Forestry} |
100 |
100 |
100 |
100 |
|
|
iii)
Tree Patta Scheme} |
|
|
|
|
|
b. |
Dryland development |
100 |
100 |
100 |
100 |
|
c. |
Forestry programmes sanctioned to corporate |
- |
- |
- |
90 |
|
|
bodies including Forest Devt. Corporations |
|
|
|
|
|
3 |
Minor Irrigation (Schematic as well as
ARF(FS)} |
95 |
95 |
95 |
95 |
|
4 |
Government sponsored programmes like SGSY including ISB component |
95 |
90 |
90 |
90 |
|
5 |
Diversified
purposes (Schematic as well as ARF) |
90 |
90 |
90 |
90 |
|
6 |
Farm Mechanisation (including power tillers) |
95/90* |
90 |
90 |
90 |
|
7 |
Work animals, animal driven carts &
bio-gas |
90 |
90 |
90 |
90 |
|
8 |
Non-farm activities(including pre-sanction |
100 |
90 |
90 |
90 |
|
|
schemes)** |
|
|
|
|
NOTE
In case of externally aided projects, the percentage of refinance as
specified relative agreements and as indicated in the sanction letter will
apply.
(viii) Margin
Money
NABARD stipulates beneficiary's contribution to the project cost in
order to ensure his/her stake in the investment. Such margin money generally
varies 5% to 25% according to the type of investment and the category of
borrowers.
(ix) Special
Focus
·
Removal of regional/sectoral imbalance
NABARD considers removal of regional and sectoral imbalance as one of the thrust areas and gives preference to the needs of less developed areas in terms of allocation of resources, quantity of refinance etc.
·
Special focus for North Eastern states
For the development of the North‑Eastern region, the Bank has been
making special efforts through refinance on liberal terms and other supportive
measures for strengthening the rural credit delivery system.
·
Hi‑tech and Export‑oriented
Projects :
NABARD issues guidelines for formulation of hi‑tech and export
oriented projects in farm and non‑farm sectors. Besides, it undertakes
consultancy work for projects including appraisal of projects even in cases
where refinance is not availed from NABARD.
·
ADFCs
Agricultural Development Finance Companies (ADFCs) for financing hi‑tech/cornmercial
ventures, with NABARD as chief promoter, holding 26% equity, have been set up
in Andhra Pradesh, Tamil Nadu and Karnataka states.
Some important investment credit
activities
·
Minor Irrigation
·
Plantataion & Horticulture
·
Land Development
·
Animal Husbandry
·
Fisheries
·
Agriculture Engineering
·
Forestry
·
Biotechnology
·
Cold Storage/Storages for Horticultural Produce
Farm
Sector
A.
Refinance
Assistance for financing farm mechanization
(i) Tractors:
(a) The
quantum of refinance in respect of financing for acquisition second tractor has
been enhanced from existing level of 40% to 90% (95% in case of SCARDB’s) of
the loan amount as in the case of first tractor.
(b) Though
the minimum land holding required for financing tractors acre perennially
irrigated land, necessary discretion has been give banks to evolve their own
area specific norms, if need be, and re such norms evolved by them to the
concerned RO of NABARD.
(c) Refinance
facility for financing purchase of second hand tractors been extended to
Gujarat in addition to Punjab, Haryana and Rajasthan.
(ii) Power
Tillers:
(a) Though
the minimum land holding required for financing power tillers is 6 acres of
perennially irrigated land, necessary discretion has been given to banks to
evolve their own area specific norms, if need be, report such norms evolved by
them to the concerned RO of NABARD.
(b) Banks have also been advised to give focused attention on financing power tillers by preparing a three year banking plan for a compact a for the benefit of the small farmers.
B.
Swarnajayanti Gram Swarozgar Yojana (SGSY)
SGSY, formed by restructuring ongoing self employment programmes, IRDP, TRYSEM, DWCRA, etc., is under implementation from 01 April 1999.The programme envisages formation of SGSY Groups and their linkage with banks. Individuals as also SGSY group members, below poverty line are assisted under the programme. For details, see Chapter 'Priority Sector Advances'.
C.
Scheme for
setting up of Agriclinic and Agribusiness centers
In pursuance of die announcement made by the Union Finance Minister the
budget speech for the year 2001‑02,
National Bank in consultation with Ministry of Agriculture, GOI and
select banks formulated scheme for financing Agriculture Graduates for setting
up Agriclinics and Agribusiness Centres. The scheme aims at supplementing the
existing Extension Network to accelerate the process of technology transfer to
agriculture and supplement the efforts of State Agencies in providing inputs
and other services to the farmers.
The
salient features of the scheme are as under:
·
The scheme is open to agriculture
graduates/graduates in subjects allied to agriculture.
·
The outer ceiling of the projected cost would
be Rs. 10 lakh for individual and Rs.50 lakh for groups.
·
Margin money assistance from NABARD's Soft Loan
Assistance Fund upto 50% of the margin prescribed by banks to meet any
shortfall in borrower’s contribution.
·
Mode of refinance will be under ARF as also
under prior sanction procedure of NABARD.
National Bank has prepared Model Project Profiles in respect of a few
activities indicating the estimated cost and income streams. The banks have the
freedom to select of the borrowers/entrepreneurs and the activity depending on
potential of the area subject to technical feasibility and financial viability
of the proposals.
D.
Scheme for financing farmers for
purchase of land for Agricultural Purposes
In response to the Hon'ble Union Finance Minister's emphasis on the need to step up priority sector lending and to examine financing farmers for purchase and for agricultural purposes, the Working Group constituted by Indian Banks Association formulated above scheme in consultation with the Govern it of India, RBI and NABARD.
1. The objective of the Scheme is to finance the farmers to purchase, develop and cultivate agricultural as well as follow and waste lands as also consider financing purchase of land for establishing or diversifying into other allied activities.
2. Eligibility (i) Small and marginal farmers i.e.. those who would own maximum of 5 acres of non‑ irrigated land or 2.5 acres of irrigated land including purchase of land under the scheme and (ii) Share croppers/Tenant farmers are eligible.
3. Margin :
Minimum of 20% or as may be prescribed by RBI from time to time.
4. Security:
The land purchased out of the bank
finance will be mortgaged to the bank as security for the loan from
borrowers.
5. Interest
Rate: As per the RBI norms issued from time to time.
6. Valuation :
Valuation of the land for fixing the quantum of finance banks to decide based
on the price indicated by the farmer
vis-ŕ-vis the last 5 years' average registration value available with
the Registrar/Sub‑Registrar of the area.
7. Quantum of
loan : Based on the land to be purchased, its valuation and also development
cost.
8. Repayment
period: 7‑10 years in half yearly / yearly instalments including a
maximum moratorium period of 24 months based on the gestation period of the project
and cash flow. .
9. Repaying
Capacity : Based on the income surpluses from the production activities on the
land being purchased and income from other sources may be considered to repay
the bank loan with interest.
10. NABARD
Refinance: Refinance will be extended under both Automatic Refinance Facility
(ARF) and pre‑sanction procedure of NABARD depending upon the project
cost and the amount of refinance involved
E. SEMFEX
II
As a follow up to the review of the scheme with the Director Gene Resettlement,
workshops are being organized at State level to create awarness about
availability of financial assistance from banks to Ex‑servicemen for
taking up self employment activities under SEMFEX II. Further, as a part of
measures to increase the flow of credit under the scheme, NABARD would extend,
on a selective basis. Margin Money Assistance under SWRTOs up to 10% of the
cost of the vehicle.
F.
Central Sector
Capital Subsidy Scheme for Investment Promotion (IPS)
A Central Sector Capital Subsidy scheme (Investment Promotion Scheme
launched by the Government of India in collaboration with NABARD development of
privately owned non‑forest wastelands in the country is un implementation
since 1998. Of the 40 schemes covering about 1500 ha sanctioned till date, the
coverage is mostly confined to the States of Tamil Nadu, Andhra Pradesh and
Maharashtra, with Tamil Nadu accounting for more than schemes. The scheme
provides for subsidy upto 25% of bank loan with a ceiling of Rs. 25 lakh for
taking up plantation and other on‑farm developments in private
wastelands.
In view of the availability of substantial area under non‑forest
wasteland all States and the need to
develop them, a nationwide awareness and publicity campaign was launched
by the Government of India in association m NABARD for popularizing the
Investment Promotion Scheme (IPS). As a par this effort, workshops are being
organized by NABARD in different Stales/ regions.
G.
Refinance Scheme for financing Farmers Service Center (FSC)
NABARD has decided to extend 100% refinance facility to banks financing
Farmers Service Centres (FSC) set up in collaboration with Mahindra Shubhlabh
Services Ltd (MSSL) for providing various extension service to farmers
including supply of agri‑inputs. FSC is intended to benefit farmers way
of higher yields and productivity through private sector participation
technology transfer and extension services.
Refinance for Rural Housing Activity
Government of India has been according considerable importance to housing
sector in rural areas. The housing sector is one of the prime engine, economic
growth, as it satisfies the social needs, generates employment , stimulates
economy with its spill‑over effects. Housing in the rural areas b of
agriculturists and non‑agriculturists, combines the business as well
dwelling needs and thereby leads to overall rural development.
With a view to supplementing the efforts of Government of India, State
Governments, National Housing Bank and Banking sector in augmenting resources
for the rural housing segment, NABARD has decided to include rural housing as
an eligible activity for extension of refinance (investment credit the eligible
banks w.e.f. 01 April 2001. The broad terms and conditions for its refinance
scheme are:
Area of Operation
Refinance will be provided to all eligible
Banks for financing extended by them to housing projects in the 'rural' areas
only. As per NABARD Act, Rural area means the area comprised in any village and
includes the area comprised in any town, the population of which does not
exceed 50000 or such other figure as the RBI may specify from time to time.
Mode of refinance
Refinance is available under Automatic
Refinance Facility (ARF) subject to a ceiling, of Rs. 5 lakh of loan amount per
housing unit. Financing banks need to obtain prior sanction in respect of group
proposals.
Eligible Borrowers
·
Individuals
·
Co‑operative
Housing Societies
·
Public Bodies
·
Housing Boards/
Housing Development Authorities/ Improvement Trusts
·
Local Bodies
·
Voluntary agencies
and NGOs
·
Housing Finance
Companies registered with NHB
Financing made under Golden Jubilee Rural
Housing Scheme and Schemes of the Govt. of India, Ministry of Rural Development
shall also be eligible for NABARD refinance.
Eligible Purposes
Construction of new as well as Repairs/
Renovation of existing houses in rural areas.
Security/Margin
As per RBI / NHB guidelines issued from time
to time.
Ceiling on the Cost
The cost of a dwelling unit may not exceed
Rs.7.5 lakh. In case land is being acquired the land cost may be reckoned as
margin money. Otherwise cost of land should not be included in the project
cost.
Quantum of bank loan for
individual (maximum)
For new houses ‑ Rs. 5 lakh
For Repairs/ Renovation ‑ Rs. 1 lakh
Quantum of
NABARD Refinance
|
No. |
Purpose/Region
|
Quantum of
refinance (% to bank loan) |
|
I II
1 2 4 III |
North Eastern Region and Sikkim Other Regions Commercial Banks and Scheduled Primary
(Urban) Cooperative Banks State Cooperative Banks Regional Rural Banks State Cooperative Agriculture and Rural
Development Banks (SCARDBs) All the Districts covered by District Rural
Industries Project (DRIP) |
100% to all Agencies 90% 90% 90% 100% 100% |
Repayment period
For new houses ‑
not more than 15 years
For Repairs/
Renovation ‑ not more than 7 years
Moratorium
Not more than 18 months from the date of disbursement of first inst
Rates of Interest on Refinance
As may be stipulated by NABARD from time to time. Interest rate at the
ultimate borrower level will be as per the RBI norms.
INFRASTRUCTURE
DEVELOPMENT FINANCE COMPANY LTD
Infrastructure Development Finance Company Ltd. (IDFC) was born the need for a specialised
financial intermediary to professionalise the of infrastructure development in
the country. Incorporated in 1997 initial paid‑up capital of Rs. 10,000
million, IDFC was conceived as an institution to facilitate the flow of private
finance to commercially viable infrastructure projects and help mitigate
commercial and structural risks contained the designing innovative products and
processes.
Mission and Strategy
The aim of IDFC is to nurture growth of private capital flow for
infrastructure on a commercially viable basis. On the one hand, IDFC will seek
to unbundle and mitigate the risks that investors face in the infrastructure
sector, and on the other, it will aim at creating efficient financial
structures both at the institutional as well as at the project level.
To achieve its mission, WC seeks to base its strategy on five elements,
viz.,
(i) operate
with a strong commercial orientation : charging rates a on products and
services that are market‑based;
(ii) introduce
new and innovative financial products in the Indian financial market place so
as to supplement the capabilities of
existing institutions in financing infrastructure projects;
(iii) rationalise
the legal and regulatory frameworks and thereby en private sector participation
in infrastructure development;
(iv) enable the creation of a
long‑term debt market; and
(v) adhere
to global best practices with respect. to corporate governance, operating
policies and risk management.
IDFC mainly operates in the areas such as energy, telecommunications
& information technology, integrated transportation, urban infrastructure
and food & agri‑business infrastructure. IDFC has been assigned lead
arranger dates in its areas of operations and in its role as policy advisor, it
is actively involved in exercises entailing rationalising policy and regulatory
frameworks govern infrastructure sectors. It is involved in identification of
best practices, drawing on the expertise of Policy Advisory Boards and
promoting policy dialogue amongst stakeholders such as Central and State
Governments, regulators investors.
In line with its objective to link projects to a sustainable flow of
funds from the capital market as also to strengthen project structures and
develop greater confidence in projects appraised and found bankable, IDFC
offers a variety of services to projects in the infrastructure sector, which
include funding by way of debt and equity support, mezzanine structures‑and
advisory services. Apart from above, IDFC encourages banks to participate in
infrastructure projects through 'take‑out' financing for a specific term
and at a preferred risk profile, with 2 taking out the obligation after a
specific period. Using risk participation facilities, IDFC also strengthens
links between financial institutions and infrastructure projects. Further,
IDFC, through guarantees structure, helps promoters : resources from
international markets. Mutual funds and
pension funds being potential sources of long‑term funds for infrastructure
projects, IDFC intends offering advisory services to these funds to facilitate
and, strengthen their connectivity with infrastructure projects.
Exposure Norms
The exposure norms, as applicable to other domestic financial
institutions, be used by IDFC as a basis to determine the prudential norms for
IDFC as ii below :
Exposure
parameter Exposure
limit
1.Exposure to any
single borrower 15
per cent of DFI portfolio
2.Exposure to any
single group 40
per cent of DFI net worth
In the case of IDFC, as the nature of the business is restricted to
infrastructure sector, the initial asset build‑up is expected to be
primarily in the power and telecommunication sectors. Over time, it is expected
that asset growth in the ports, roads and urban sectors will develop. The
prudential norms for IDFC will to factor the asset build‑up in each
sector over the medium and long‑term.
3 Network comprising an university network including IIT, Kanpur and
Ahmedabad has been established by IDFC to harness the best academic expertise
to develop and strengthen the infrastructure framework in the country.
3inetwork supports projects which cover infrastructure areas as diverse as
coastal shipping and the role of privatisation in power sector.
IDFC has created a decentralised infrastructure and new technologies
group to undertake initiatives such as identification of new technologies for
application, development of financial models with the help of a local service
partner financial initiating dialogue with donor agencies, relevant ministries
and multilateral agencies to enable and stimulate commercially viable
decentralise development.
IDFC, as on March 31, 2003 on a cumulative basis, has approved financial
assistance to 104 projects aggregating over Rs. 1,24,600 million. IDFC has also
broadened its initial focus on power, roads, ports and telecommunications to a
framework of energy, telecommunications & information technology,
integrated transportation, urban infrastructure and food & agri‑business
infrastructure. In its sectors of engagement, IDFC has been awarded lead
arranger mandate and key advisory assignments.
Key initiatives in keeping with IDFC's policy advisory mandate of providing leadership in rationalising policy and regulatory frameworks, and removing impediments to the movement of capital to infrastructure sectors, have been undertaken.
Operations in Energy Sector
Scope
Energy
Initiatives
Lead Arranger, Financier, Project Advisory
Developments
IDFC has been actively working with progressive State governments
prepare road maps for reform initiatives in respect of the policy framework
governing the power sector. IDFC played a pivotal role in the preparation of
the Report of the Government of Karnataka's "High Level Committee on
Escrow Cover to Independent Power Projects (IPPs)". On the regulatory from
IDFC has been actively interacting with and responding to documents release by
the Central Electricity Regulatory Commission (CERC) and various State
Electricity Regulatory Commissions.
IDFC believes that its multi‑pronged and focused approaches
towards reforming the power sector would ultimately translate into desired
investment opportunities.
Operation in Transportation Sector
Scope
Roads, Railways, Pipelines, Waterways, Ports and Airports
Initiatives
Lead Arranger, Financier, Project Advisory
Developments
Integrated Transportation is viewed by IDFC as an integrated logistics
chain, with parts not only complementing/ interfacing with each other, but also
competing. Roads, railways, pipelines, waterways, ports and airports are
therefore evaluated as links of a chain and not stand‑alone, independent
entities.
Operations in Telecom & IT Sector
Scope
Telecommunications, Technology backbones and Internet Service Providers
Initiatives
Financer
Developments
IDFC has been one of the foremost financiers of the Telecom & IT
infrastructure sector in the private sector in India. IDFC has provided financial
assistance to various telecom services projects in the areas of cellular
mobile, basic, national long distance, cable & broadband, and satellite
services provision. IDFC's existing clients include almost all the leading
private sector telecommunications service players operating in various telecom
circles of India.
A major part of IDFC's assistance has been on a non‑ or limited‑recourse
basis, with project sizes ranging from Rs.200 million to Rs.50,000 million and
loan tenors varying from 1 to 10 years. About 60% of IDFC's assistance has thus
far been to cellular mobile telephony service providers.
IDFC has successfully financed in the cellular mobile services sector.
It is played a key role as underwriter and anchor investor. It has participated
actively in the recent auction of the fourth cellular mobile telephony services
licenses, as provider of performance and financial guarantees and as financier.
IDFC maintains an overall positive outlook on the Indian Telecom &
IT sector, and is currently exploring opportunities in internet & IT
enabled services, international long distance telecom services, rural telephony
services, etc., besides further expanding its footprint in cellular mobile and
basic telephony services.
Operations in Urban Infrastructure Sector
Scope
Urban Infrastructure
Initiatives
Financier and Project
Advisory
Developments
IDFC is playing a key role in the "Committee for Operation and Maintenance of Rural and Urban Water Supply Schemes" constituted by the Government of Maharashtra. The committee would inter alia suggest a comprehensive package of reform measures, including a road map for private sector partition in water supply and sewerage in the State. The Committee has recommended a broad regulatory framework and contractual structure for water and wastes projects in the State.
Operations in Health Care Sector
Scope
Hospitals‑secondary, tertiary and super speciality; clinics and
support facilities related to health care.
Initiatives
Financier and Project Advisory
Developments
As social sectors constitute a key index of development, IDFC to
conscious decision to expand its business to include infrastructure develop in
areas of health, education and tourism.
IDFC believes that sectors like health also provide ample opportunity
and apply the principles of PFPI (private financing on public infrastructure)
since and extensive net work public health care institutions provide an
platform for such investments. The tax incentives announced for the sector an
acknowledgement of the growing importance of the sector. With the provision of
quality infrastructure in health care, India holds the potential to err as the
leading health care centre in South East Asia.
Operations in Food and Agri‑Business Infrastructure Sector
Scope
Food & Agri‑Business Infrastructure
Initiatives
Financier, Project Advisory
Developments
The development of high quality agri‑extension and post‑harvest
infrastructure leading to an efficient supply chain from farmer to consumer,
could lead to mitigation of several of the chronic problems besieging Indian
Agriculture such as poor availability of quality inputs and technology to
farmers, poor post‑harvest handling and transportation practices, high
wastages, low quality of produce and low value addition or export
competitiveness. IDFC's key focus areas therefore include infrastructure such
as agri‑extension centres, collection and aggregation centres, modern
warehousing, cold storage and cold transportation, auction and wholesale
markets, food parks, export terminal facilities and retail distribution
infrastructure.
IDFC is also discussing with State governments on development of
infrastructure in crucial areas such as modern integrated fishing harbours that
would meet export standards, rehabilitation and augmentation of wholesale
markets and modern bulk silo facilities for grain storage, through Public‑Private
Partnerships.
Operations in Structured Products Sector
Infrastructure funding requires innovative financial products largely on
account of the unique project risk profile and inadequacy of traditional
approaches in financing such projects.
Infrastructure financing needs to not only meet the capital requirements
of the project in a cost‑effective manner but also suitably allocate
risks amongst participating entities. The inability of traditional sources of
financing in achieving both these objectives requires creative structure
financing as a more viable source of funding both from a risk sharing and cost
points of view.
IDFC's product range seeks to address the specific needs of infrastructure financing.
Operations in Environment and Decentralised
Infrastructure and New Technologies Group Sector
IDFC leveraging its unique positioning and its mandate to make "infrastructure
happen", has taken a exploratory step in facilitating the development of
commercially viable distributed infrastructure through its Decentralized
Infrastructure and New Technologies group (DINT). The objective of DINT is to
facilitate infrastructure projects of smaller scale with a view to provide cost‑effective
& sustainable infrastructure service to sections of society that risk being
marginalized in the current development process. The group focus is on working
with technologists, donor and bilateral programs, entrepreneurs, policy makers
and the state in developing, testing and financing DI models and projects based
on principles of local ownership, commercial incentives, market mechanisms, and
equitable risk‑return allocation.
DINT has taken initiatives in various areas such as an active role in
the nascent climate change/ carbon trading business; public private
partnerships for improving infrastructure access for the vulnerable section in
collaboration with international bilateral and multilateral agencies; working
on pro A decentralized renewable energy systems, energy service provision and
rural distribution pilots; working with municipalities & local utilities to
explore viability of and business models for decentralized wastewater treatment
working with NGOs to create approaches for segregation and management wastes in
a decentralized manner.
Operations in Education Infrastructure Sector
There is widespread recognition of the crucial role that education the
economy and in nation building. In fact, a successful education policy the
bedrock of all fields of national development ‑ political, economic, cal,
scientific, social, and environmental."
In spite of the political framework and "social interest‑
favouring public provision of education infrastructure and services, the
realization has emerged that the private sector must be involved to a greater
extent in education both directly and through PPP frameworks. The investment
climate is therefore very favourable and the regulatory framework is not too
onerous.
There are significant contributions that can be made by private capital management in the following segments:
·
Higher education
·
Technical and vocational education
·
ICT, distance education and open learning
·
Ancillary services, including content provision
and contract
·
Student financing (demand side)
·
Early childhood care and learning
·
Primary and secondary school education
·
Building of knowledge infrastructure
IDFC and Education in India
IDFC intends to identify and develop social infrastructure in education a manner that would have a significant developmental impact, while commercially viable. The opportunity for IDFC is to enable public partnerships by leveraging the extensive education infrastructure that exists in government sector, through select private initiatives and joint venture, rather than merely adding to existing basic infrastructure for education. Additionally, IDFC desires to support private initiatives focused on future trends education in India, as well as relevant Greenfield projects. IDFC also leverage its understanding of the policy and regulatory frameworks, financing, R&D and technology options, and social and cultural issues to create opportunities for bankable education projects. Therefore, IDFC to identify, secure and consolidate advisory mandates and funding opportunities in various education segments as given in this presentation.
The developmental perspective
Commercial Developmental
Investment focussed
Operations in Tourism Sectors
Scope
Tourism Infrastructure for developing domestic and international
tourism.
Initiatives
Financier and Project Advisory
Developments
Tourism is a new area of intervention for IDFC. India has yet to realise
its ill potential from tourism. IDFC's endeavour will be to bring about
creative partnerships involving.
·
Central and State Government organisations as
well as private service providers and stakeholders
·
Investors interested in commercially viable
projects.
·
Organisations offering competencies including
project planning, technical knohow and related skill sets to enhance the visitor
experience.
IDFC would welcome inputs from the above 3 constituencies to provide an integrated platform for tourism development.
IDFC's success would be measured by its ability to stimulate local economic development, while ensuring sustainability and creating opportunities for future growth, through an integrated approach to tourism infrastructure development, leading to an improved visitor experience for existing and potential tourists.
INDUSTRIAL
INVESTMENT BANK OF INDIA LTD.
Industrial Investment Bank of India Ltd. (erstwhile Industrial
Reconstruction Bank of India) was set up in 1985 under the IRBI Act, 1984 as
the principal credit and reconstruction agency for aiding rehabilitation of
sick and closed industrial units. With a view to converting the institution
into a full‑fledged all purpose development financial institution, IRBI
was incorporated as Industrial Investment Bank of India Ltd., (IIBI) under the
Companies Act, 1956 on March.17,1997, providing it with adequate operational
flexibility and financial autonomy.
Since its reconstitution in 1997, IIBI's business strategy focusses on
improvement in asset quality and generation of profit. To create and maintain
high quality assets, IIBI placed emphasis on redeployment of manpower and
installation of modem, objective risk assessment and monitoring systems. Asset
acquisition policy has been re‑oriented by giving more importance to
investment in rated debt instruments in the primary and secondary markets. The
other programmes aimed at strategic re‑orientation of IIBI include
assessment of asset risk through formal risk scoring models, modernisation and documentation of processes and systems,
organisational restructuring, enhanced role of internal audit pursuing on‑the‑spot compliances,
proactive, and timely loan workouts/restructuring/one‑time settlements,
continuous and focused monitoring of
cost of funds and income, emphasis on spreading new skills and team‑based
approach to decision making with accountability.
IIBI provides, besides project finance, short duration non‑project asset-backed financing and working capital/other short‑term loans to companies. During 2000‑01, IIBI made efforts towards diversifying into investment in rated debentures/bonds.
NORTH‑EASTERN
DEVELOPMENT FINANCE CORPORATION LTD (NEDFI)
North Eastern Development Finance Corporation Ltd. (NEDFi) was
incorporated under the Companies Act, 1956, on August 9, 1995 with its
registered office at Guwahati, Assam, for the development of industries, infrastructure,
animal husbandry, agri‑horticulture plantation, medicinal plantation,
sericulture plantation, aquaculture, poultry and dairy in the North Eastern
States of India.
NEDFi has been promoted by All India Financial Institutions ‑Industrial
Development Bank of India, ICICI Ltd., Industrial Finance Corporation of India,
Small Industries Development Bank of India, Insurance Companies Life Insurance
Corporation of India, General Insurance Corporation and its subsidiaries,
Investment company ‑ Unit Trust of India and Bank ‑ State Bank of
India.
NEDFi is the premier financial and development institution of the North
East of India.
NEDFi aims to be a dynamic and responsive organization to catalyze the
economic growth of the North‑east. It will assist in the efficient
formation of fixed assets by identifying, financing and nurturing eco‑friendly
and commercially viable industrial, infrastructure, agro‑horticulture,
fishery and animal‑husbandry projects in the region.
Project Finance Scheme
Objective : To provide long term
finance for the establishment of new industrial, infrastructure, agri‑horticulture,
fishery and animal husbandry projects as well as expansion, diversification and
modernization of existing ones.
Types of Assistance : Term loan,
direct subscription/underwriting of equity and debt instruments, provide
financial guarantee and participate in deferred payment guarantee.
Eligibility : Industrial concerns
conforming to the definition in Section 2 (c) of the IDBI Act, Infrastructure,
Agro‑horticulture, Fishery and Animal Husbandry projects.
Project Cost : Minimum assistance: NEDFi
ordinarily finances projects with loan component of Rs.25 lakh and above.
However smaller projects in innovative fields and in the hill states are also
considered.
Maximum assistance : Normally, NEDFi can consider
up to maximum exposure of 10% of paid, up capital & reserves. However, it
can consider projects requiring higher investment in consortium with other
financial institution and banks.
Nature of
assistance : Rupee Term Loan
Promoters' contribution : 30‑40% of
the total project cost. However,
in the case of consortium financing it will be at par with the norms of All
India Financial Institutions.
Debt Equity Ratio : Ordinarily 1.5
: 1
Interest Rate : Based on Prime Lending Rate
fixed from time to time. Actual rate within the prevailing rate band depends
upon creditworthiness of borrower and risk perception. There is provision for 1
% rebate on interest rate for timely repayment on due dates.
Up‑front fee : 1 % of the loan amount sanctioned
Security : First charge
on movable and immovable fixed assets.
Documentation:
1. Loan
Agreement.
2. Deed
of hypothecation.
3. Personal
guarantee from main promoters, wherever required.
4. Undertaking
from the promoters for
·
Meeting overrun/shortfall in the project
cost/means of financing
·
Non‑disposal of shareholdings by the
promoters
5. Undertaking from MD for non‑receipt of commission, if company is in default to NEDFi.
6. Resolution under Section 293 (1)(a) and
293(1)(d) of the Companies Act.
Objective : The NEEF has been created
to help first generation entrepreneurs who are short of equity and are unable
to meet the conditions of banks/financial institutions. Special focus is given
on agricultural and horticultural activities and activities with local raw
material.
Eligibility : New projects in tiny &
SSI sectors, expansion, modernization and diversification of existing units
etc. Benefits can be extended Proprietorship & Partnership Concerns and
Companies. Technical qualification of the promoter in the relevant field is a
pre‑requisite.
Nature of assistance : Quasi Equity.
Project Cost: Maximum of Rs. 25 lakh.
Extent of Assistance: Up to 25% of the project
cost, subject to a maximum of Rs.3.75 lakh. NEEF assistance may be supplemented
with normal NEDFi loan component together with one cycle of working capital in
deserving cases.
Promoters' Contribution: Minimum 15%.
Interest rate : Service charge
of 1.5 % per annum.
Repayment Period : Maximum 7 years (including moratorium upto 3 years).
Security : Pari‑passu
charge with Banks/SFCs/ SIDCs on the assets on the concern/company; collateral
guarantee if needed but not, insisted for deserving cases; personal guarantee
from the promoters.
Working Capital Term Loan
Objective : This
scheme is aimed for those units currently facing problem due to lack of working
capital support from commercial banks,,
but can be made viable with the infusion of fresh funds by way of one
time core working capital assistance.
Eligibility:
1. The scheme is meant for
limited companies which are industrial concerns as defined in IDBI Act.
2. Those limited companies
which have not got any working capital:
a. They are defaulter in banks, but not willful defaulter.
b. They were under financed & hence
running in lower capacity.
c. There
is market for the product.
d. The
promoters are competent and persons of integrity.
e. Technology
is not outdated.
3. The Company and the unit must be
potentially viable.
Quantum of Assistance : 75% of the
working capital requirement of business
for one cycle of operation.
Promoters' Contribution: 25 %
Interest rate: PLR + weightage of risk.
Repayment Period: Maximum 3 years
The borrower shall approach commercial banks for meeting its normal
working capital requirement at any time during currency of the loan. As and
when the assistance is sanctioned by the bank, the working capital loan from,
NEDFi should be repaid out of the proceeds of the loan sanctioned by the bank.
NEDFi in turn shall release its charge on current assets and also concede and
charge on fixed assets if so insisted by the bank.
Security:
(i) First charge by way of
hypothecation of current assets.
(ii) Charge on fixed assets
of the unit.
(iii) Personal Guarantee of Promoter
Director/Corporate Guarantee
(iv) First pari‑passu
charge on the fixed assets of the unit, if the assets are mortgaged to other
institutions/ Bank
(v) Adequate collateral security
Upfrontfee: 1.00% of
the loan amount.
Equipment Finance
Objective: For
acquiring specific machinery/equipment
Eligibility :
·
Financially sound companies
·
Should be in the operation for a period of 5 years, should be making profit for the
last three years.
·
Must have a good track record.
Exclusion : Assistance under
the scheme will not be available for the following:
·
Acquisition of second hand equipment/machinery
·
In‑house fabrication of equipment/ machinery
·
Reimbursement of the cost of equipment/
machinery purchased more than 90 days prior to the date of application.
·
Grass root projects or major/ expansion/
diversification, which call for detailed appraisal.
Nature of assistance: Rupee Term Loan
Extent of Assistance: 70% of cost of equipment
plus taxes/duties, transportation and installation charges. Minimum: Rs.25 lakh Maximum: 10 Crore.
Promoters' contribution: 30%
Debt Equity
Ratio: 1.5:1
Current ratio: 1.33: 1
Interest coverage: 2:1
Interest rate:
Based on Prime Lending Rate fixed from time to time.
Actual rate within the prevailing rate band
depends upon creditworthiness of borrower and risk perception.
Upfront fee: 1 % of loan amount sanctioned
Repayment period: 3 to 6 years
Security: Extension
of first charge or hypothecation of assets financed Personal guarantee/
Corporate guarantee.
Documentation:
• Loan Agreement
• Deed of hypothecation
• Demand promissory note
NEDFi offers a wide
variety of financial products to finance viable, industrial, infrastructure,
agro‑horticulture, fishery and animal husbandry projects in the North
East of India.
In order to be
eligible for NEDFi financing, a project must meet a nun of NEDFi criteria:
·
The project must be located in the North East
of India.
·
It must be financially and economically viable.
·
It must be technically sound.
·
It must benefit the local economy.
·
It must be environmentally and socially sound.
A company or entrepreneur, seeking to establish a new venture or expand
existing enterprise can approach NEDFi by submitting a Preliminary Project
Proposal. After this initial contact and a preliminary review, NEDFi may
proceed by requesting a Detailed Techno‑Economic Feasibility Report
Business Plan to determine whether or not to appraise the project.
The proposal can be submitted to NEDFi's Branch Offices nearest to
project location at the respective states or to NEDFi's offices in Guwahati.
NEDFi provides a wide variety of financial products and services to its
clients and can offer a mix of financing and advice that is tailored to meet
needs of each project.
Like other private sector investors and commercial lenders, NEDFi:
·
Invests in commercially viable projects.
·
Seeks profitable returns.
·
Prices its Interest rates with the market.
NATIONAL SCHEDULED CASTES FINANCEAND DEVELOPMENT CORPORATION
National Scheduled
Castes Finance and Development Corporation Govt. of India undertaking under the
Ministry of Social Justice & Empowerment. It was incorporated on 8th
Feb, 1989 under Section 25 of the Companies act,1956.
NSFDC is an apex institution for financing, facilitating and promoting the economic development activities of SCs. It is providing various types of, financial assistance to SCs people at a very low rate of interest. It sanctions viable economic schemes in various areas i.e.
• Agriculture
• Transport
• Service
• Horticulture,
Small Industries etc.
NSFDC is providing various types of Financial Assistance:
• Term Loan
• Seed
Capital
• Bridge Loan
• Working
Capital Loan
• Micro
Credit Finance
In addition to the Financial Assistance, NSFDC provides Grants for Skill
and Enterprenurial Development Programmes for targeted beneficiaries (i.e.
eligible SCs).
·
The beneficiary should be from Scheduled Castes
Community
·
Annual family income of the
beneficiary(ies)/member(s) of Cooperative Society or any other form of
Association should not exceed double the poverty line (DPL) limit (presently
Rs.40,000/‑p.a. in rural areas and Rs.55,000/‑ p.a. in urban
areas).
·
Individual, Partnership Firm/Co‑operative
societies/any other Form of Legal Association are eligible to undertake income
generating activities. However, proposals submitted by Partnership Firms,
Cooperative societies and any other Forms of Legal Associations shall be
considered subject to the following:
- All the members should belong to Scheduled Castes community.
- Annual family income of each member/applicant should be below double the poverty line (DPL) limit.
Financing Programmes
Unit
Cost: NSFDC provides term loan for project (s)/ unit
(s) costing upto Rs.30.00 lakhs
Quantum
of Assistance : NSFDC may provide
term loan upto 90% of subject, subject to the condition that State/ UT level
channelising agencies contribute their share of assistance as per their schemes
and also provide the required subsidy besides tying up of the financial
resources from other sources, if any, available.
Promoter's Contribution :
|
Project /Unit Cost Promoter's
Contribution of Project Cost |
|
Upto Rs.1
Lakh
Not to be Insisted Above Rs. 1 Lakh
and upto Rs. 2.50 Lakhs 2% Above Rs. 2.50
Lakhs and upto Rs.5.00 Lakhs 3% Above Rs. 5.00
Lakhs
5% |
Interest Rates
|
Interest
per Annum Chargeable to
Beneficiaries
SCA’s |
|
Upto Rs. 5.00 Lakhs 3% 6% Above Rs. 5.00 Lakhs
5%
8% |
** The above rates of interest are
not on slab basis.
Repayment Period : Term Loan
is to be repaid in quarterly/half yearly instalments as the case may be within
a maximum period of 10 years including suitable moratorium period. Repayment
period for each scheme is specified the time of sanction.
Unit Cost:
Seed Capital Assistance shall be available for
projects costing upto Rs.50.00 Lakhs per unit/profit centre.
Quantum of Assistance : NSFDC may
provide Seed Capital Assistance bridge the gap in the equity required, as per
normal Debt‑Equity ratio norms term lending institutions, subject to
maximum of 80% of such equity required or Rs. 10.00 Lakhs per unit/profit
centre, whichever is less.
Service Charges : Seed Capital
Assistance will attract service charges @2% per annum from the beneficiaries
and channelising agencies shall pay @ 1 % per annum to NSFDC.
Repayment Period1Conversion into Term Loan : Seed Capital
Assistance is to be repaid within a maximum period of 5 years from the date of
first disbursement. Repayment would start after a moratrium period of 2 years
from the date of first disbursement/each disbursement as the case may be. In
cases where Seed Capital Assistance remains unpaid beyond 5 years, the same
shall be converted into term loan at the expiry of 5th year at an interest rate
applicable to NSFDC term loan and shall be repaid within a period of 5 years
quarterly/half yearly instalments from the date of its conversion into term
loan. Quantum of Seed Capital Assistance sanctioned shall be the basis of
determining the interest rates.
Project considered for Seed Capital Assistance shall not be eligible for
any other Financial Assistance from NSFDC.
Unit Cost : Bridge Loan may be provided against investment subsidy or any other type
of assistance sanctioned by any recognised agencies for projects sting upto
Rs.30.00 Lakhs, but not disbursable within implementation period of the project
Interest Rates : Interest rate on bridge loan
are at par with interest rates charged on term loan assistance.
Repayment Period : The agency sanctioning
investment subsidy/other assistance should ensure to release the funds directly
to State Level Channelising Agencies or NSFDC, within a maximum period of 2
years from the date of first time release of Bridge Loan by NSFDC.
Unit Cost:
(a) For projects
/units costing upto Rs.3.00 lakhs, the entire Working Capital may be taken as
part of cost of project.
(b) For Projects /Units with cost exceeding Rs 3.00 lakhs and upto Rs.30.00
lakhs, margin for working capital alone would be considered as part of project
cost.
Quantum of Assistance: NSFDC may consider to provide Working Capital loan on specific request
subject to a maximum of 70% of total Working Capital loan requirement or Rs
7.00 lakhs/unit whichever is less.
Interest
Rate : State Channelising Agencies shall charge interest @10% p.a. interested from
the beneficaries and pay @ 8% p.a. to NSFDC
Repayment Period : Channelising Agencies
and promoters shall ensure the Working Capital loan to be taken over by banks/financial institutions/ other
sources within 3 years. from the date
of first disbursement of Working Capital. loan by NSFDC. All dues on,
this account should be paid back to NSFDC within the last quarter of the 3rd
year.
Working Capital Loan would be considered only for Projects availing term loan from NSFDC.
Unit cost: NSFDC
provides Micro Credit Finance for units costing upto 25,000/-
Quantum of Assistance: NSFDC provides loans upto Rs. 25,000/-. However, under the Central‑Sector
Scheme of Special Central Assistance to the Special Component Plans, the below
Poverty Line Beneficiaries are eligible for subsidy Rs. 10,000/‑ or 50%
of the unit cost, whichever is less.
Interest Rates: The NSFDC shall charge interest
@ 2% from the SCAs which in turn, shall charge 5% from beneficiaries.
Repayment
Period : Micro‑Credit Finance is to be repaid in quarterly instalments
within three years (including the moratorium period of 90 days for fund
utilisation).
On repayment of loans under Micro‑Credit, the eligible
beneficiaries can avail any loan from the NSFDC
VI. Computerisation of Database of SCA' s
NSFDC may provide grant upto Rs.5 Lakhs per Chennelising Agency for
Computerisation of their database.
VII. Grant for Skill &
Enterpreneural Development Programmes
(i) Financial
Assistance in the form of grant is provided through the channelising agencies
for imparting skills and enterpreneurial development training to SCs so as to
create opportunities for employment/self‑employment.
(ii) Upto 85% of
the recurring expenditure of the training programme extended as grant by NSFDC.
Procedure for Availing Assistance
(A) Loan for Income
Generating Activities
(i) NSFDC has devised three
different formats as below:
(a) Format
of application for financial assistance for Non‑farming Other Activities.
(b) Format
of application for financial assistance for Farming Activities.
(c) Format
of application for financial assistance for Transport Sector. These formats
cover detailed check list points to be
covered while submitting the proposal to NSFDC.
(ii) Eligible
applicants may submit project report in line with NSFDC application formats as
may be applicable to the State Channelising Agencies (SCAs). SCAs may also if
they so desire as per the needs demands formulate the scheme and submit project
reports for scheme. NSFDC formats for furnishing project details are available
with State Channelising Agencies and NSFDC Representative Offices.
(iii) State Channeling Agencies (SCAs) may recommend the proposals NSFDC subject to satisfying the eligibility criteria for beneficiaries as well as viability of projects. The channelising agencies have to provide the following information for sanction of project:
(a) Implement the schemes
sanctioned by NSFDC.
(b) Provide
their share of financial assistance and subsidy as applicable.
(c) Monitor the project
implementation and repay the loan.
(d) Provide State Government
Guarantee/Bank Guarantee for covering the assistance sought from NSFDC.
N0TE: Copies of Income and Caste Certificate of the
applicants (duly attested) are to be sent alongwith the report, for projects
submitted by individuals.
(B) Grant for Skills& Enterpreneurial
Development Programmes
(i) SCAs while
recommending the training programme shall commit to finance the project
proposals of trained candidates who are willing to take up self‑employment
activities. Accordingly, the concerned training institute should also submit a
tentative project proposal of self‑employment through concerned SCA as
per NSFDC's prescribed format for income generating activities.
(ii) The
proposal should envisage 15% share of the recurring cost of programme either by
Co‑sponsoring organisation or the respective SCA.
(iii) Concerned
training institute shall submit all the documents/ information regarding
training course i.e. syllabus, candidates age group and their educational level
and relevant details of institute's main activities, training programmes
already conducted, copies of their Bye‑laws and Registration Certificate
and Annual Reports (last 3 years)
(iv) After
approval of the proposal, the amount sanctioned by NSFDC shall generally be
released in two instalments i.e. 50% after receipt of the Minutes of the
Meeting of Selection Committee including list of selected candidates and copies
of advertisement. The second instalment is generally released after the
completion of the course, subject to implementation of programme as per terms
and conditions of sanction.
NATIONAL MINORITIES DEVELOPMENT & FINANCE CORPORATION
National Minorities Development and Finance Corporation (NSDFC) was incorporated under the aegis of Ministry of Social Justice & Empowerment, Govt. of India on the 30th September 1994 under Section 25 of the Companies Act, 1956 with the main objective to promote economic development of the poorer section of Minorities.
The
aims & objective of NSDFC are given below:
·
To promote economic and developmental
activities for the benefit of "Backward Sections" amongst the
Minorities, preference being given to the occupational groups and women;
·
To assist, subject to such income and/or
economic criteria as may be prescribed by the Government from time to time,
individuals or groups of individuals belonging to the Minorities by way of
loans and advances for economically and financially viable schemes and
·
To promote self‑employment and other
ventures for the benefits of Minorities;
·
To grant loans and advances at such rates of
interest as may be determined from time to time in accordance with the
guidelines or schemes prescribed by the Central Government or by the Reserve
Bank of India;
·
To extend loans and advances to the eligible
members belonging to the Minorities for pursuing general/professional/technical
education or training at graduate and higher level;
·
To assist the up‑gradation of technical
and entrepreneurial skills of Minorities for proper and efficient management of
production units To assist the State level organisations dealing with the development
of the Minorities by way of providing financial assistance or equity
contribution and in obtaining commercial funding or by way of refinancing;
·
To work as an apex institution for co‑ordinating
and monitoring the work of all corporations/boards/other bodies set up by the
State Government/Union Territory Administrations for, or given the
responsibility of assisting the minorities for their economic development; and
·
To help in furthering the Government policies
and programmes for the development of Minorities.
NMDFC has two channels to reach the ultimate beneficiaries; one through
State Channelising Agency (SCA) nominated by respective State/UT Government and
another through the Non‑Governmental Organization (NGO). Accordingly,
Financial Assistance Programmes of NMDFC are of two type one through the SCAs
and another through the NGOs. Details of loaning schemes under SCA programme
are as given below:
Under the Term Loan Scheme, projects costing upto Rs. 5 lacs are
considered. NMDFC provides loan to the extent of 85% of the project cost
subject to a maximum of Rs. 4,25,000/-. The remaining cost of project is met by
the SCA and the beneficiary, however the beneficiary has to contribute minimum
of 5% of the project cost.
The statement of rate of interest of Term Loan Scheme is as given
below:-
|
Loan Limit Rate of Interest |
|
Upto
Rs. 2.00 Lacs
7% Above
Rs. 2.00 Lacs
10% |
The Loan is required to be repaid by the Beneficiaries over a period of
5 years.
Assistance under Term Loan Scheme is available for commercially viable
& technically feasible ventures which for sake of convenience are
classified into following sectors :
(a) Agriculture
& Allied.
(b) Technical
Trade.
(c) Small
Business.
(d) Artisan
& Traditional Occupations.
(e) Transport
& Service Sector.
Margin Money assistance is provided to beneficiaries availing Bank
Finance. Generally Public Sector Bank finance for 60% of the project cost and
seek 40% margin from the beneficiaries. Under Margin Money Loan Scheme NMDFC provides
the eligible beneficiaries loan to meet the requirement of the margin asked by
the bankers. For this purpose, loan upto 25% of the project cost subject to the
maximum of Rs. 1.25 lacs per unit is made available. The SCA and the
beneficiary are expected to contribute the remaining amount.
Recently, NMDFC has also introduced the provision of refinance in the
operation of Margin Money Loan Scheme with a view to provide time assistance to
beneficiaries seeking bank finance.
|
Loan Limit Rate of Interest |
|
Upto
Rs. 40,000/‑ 3% Above
Rs. 40,000/‑ and upto Rs. 1,25,000/‑ 4% |
The Loan is required
to be repaid by the Beneficiaries over a period of 5 years
Procedure for availing Financial Assistance
Under SCAs programme, persons amongst the targeted groups interest in
availing NMDFC loan have to apply to the Channelising Agencies of the State. Generally,
each Channelising Agency has an office at the District Level Information about
the same can be obtained from the office of the District Collector/Deputy
Commissioner. It will be appropriate to apply to the District Level Office. The
selected beneficiaries are required to execute loan agreement deed, mortgage
deed for the fixed assets with the SCA and whenever necessary provide for
security of the loan. On completion of these formalities, the loan provided to
the beneficiaries either directly by the SCA or through its District office.
TOURISM FINANCE
CORPORATION OF INDIA LTD.
The Tourism Finance Corporation of India Ltd, (TFCI) promoted by IFCI
alongwith all‑India financial institutions and leading commercial banks,
as a financing institution catering to the needs of tourism industry. TFCI
provides assistance in the form of rupee loans, underwriting/direct
subscription to shares/ debentures, equipment leasing and foreign loan
guarantee for setting up and/or development of tourism‑related activities,
facilities and services Apart from the conventional tourism projects in the
accommodation hospitality segments, TFCI also sanctions assistance to non‑conventional
tourism projects like restaurants, highway facilities, travel agencies,
amusement parks, dolphinarium, multiplex complexes, ropeways, car rental
services, ferries for inland water transport, airport facilitation centre, air
taxi and training institute for hotel personnel.
Life Insurance Corporation was established in 1956 by amalgamation
insurance companies operating in the country at that time. The main business of
the Corporation is to provide life insurance. Till now, LIC had monopoly in
life insurance in India but with the private sector stepping in, the life insurance
business will be shared according to the emerging competition. Section 27(A) of
LIC Act regulates the investment policy of LIC and 10% of the investable funds
can be invested in private corporate sector. The investment could be in the
shape of term loans or investment in the shares and debenture these
investments, LIC is generally guided by the appraisal undertaken by the all
India financial institutions and participates in term loans in consortium with
those institutions. The role of LIC is practically to provide funds for
investment and it normally participates in normal project financing schemes
barring higher rates of interest.
Unit Trust of India
was floated in 1964 in the public sector to harness savings from small and medium
income groups with an objective to investment in equity shares and other
securities of corporate sector. UTI made investment in equity shares and as
well as in fixed income bearing securities.
Participation in
project financing by UTI was based on detailed carried by financial
institutions on the same lines as by Life Insurance Corporation of India. With
the repeal of UTI Act, the UTI has been bifurcated into UTIMutual Fund
(governed under Mutual Fund Regulations) and Specified Undertaking of the Unit
Trust of India (which comprises of assured income schemes and is presently
mainly concerned with its restructuring as it suffered huge losses in the past
years).
GENERAL INSURANCE CORPORATION OF INDIA
General insurance business in the country was nationalised in 1974 which
culminated in formation of General Insurance Corporation of India and its
following four subsidiaries :
1. National Insurance
Company Limited
2. New India Assurance
Company Limited
3. Oriental Insurance
Company Limited
4. United India Insurance
Company Limited
30% of fresh accrual of funds by these insurance companies can be
invested in private corporate sector through equity/preference shares,
debentures and term loans. General Insurance Corporation of India coordinates
with all India financial institutions on its own behalf and on behalf of its
four subsidiaries and participation in term loans is based on the detailed
appraisal carried by those institutions. GIC and its subsidiaries also play the
role of investment institutions in the same manner as played by Life Insurance
Corporation Unit Trust of India.
NATIONAL WASTELANDS DEVELOPMENT BOARD
National Wastelands Development Board, Ministry of Environment & Forests,
Government of India have formulated a Central Sector Scheme providing margin
money assistance for promoting of development of wastelands. The main objective
of the 'Margin Money Assistance' scheme improve the productivity of the wastelands and to promote plantation on
wastelands for producing fuel wood, fodder, small timber and commercial
timber. The assistance under the scheme
available to public bodies Govt. Corporations, Municipalities, Urban
Development Authorities and autonomous or Semi Government bodies interested in
developing waste 25% of the project cost will be given as margin money for all
bankable projects taken up by financial institutions/banks for extending
assistance to a minimum of 50% of the cost of the project.