Credit Based Schemes For SC – Term Loan (TL)

Credit Based Schemes for SC - Term Loan (TL)

The Credit Based Schemes for Scheduled Castes (SC) - Term Loan (TL) initiative is an empowering program launched by the Ministry of Social Justice and Empowerment. This scheme is designed specifically for entrepreneurs belonging to the Scheduled Caste category, providing them with essential financial support to promote business development and entrepreneurship.

Overview of the Scheme

This financial assistance program allows entrepreneurs from the Scheduled Caste community to access substantial loans to facilitate their business ventures. The National Scheduled Castes Finance and Development Corporation (NSFDC) administers this scheme, ensuring that eligible beneficiaries receive the assistance they require to establish and grow their businesses.

Quantum of Assistance

Under this scheme, NSFDC offers term loans covering up to 95% of the total project cost. However, it is essential for State Channelizing Agencies (SCAs) to contribute their share of assistance in accordance with their respective schemes while also providing necessary subsidies and securing financial resources from additional sources.

• For beneficiaries with an annual family income of up to ₹1.50 lakh, at least 50% of the funding is allocated.
• For beneficiaries whose annual family income ranges from ₹1.50 lakh to ₹3.00 lakh, the remaining 50% financing is made available.

Benefits of the Scheme

Eligible entrepreneurs can avail themselves of various benefits, including:

• Term loan up to ₹5.00 lakh at an interest rate of 6%.
• Term loan exceeding ₹5.00 lakh but not exceeding ₹10.00 lakh at an interest rate of 8%.
• Term loan ranging from above ₹10.00 lakh to ₹50.00 lakh at an interest rate of 9%.

Repayment Terms

The repayment of the term loan is structured to be made in quarterly, half-yearly, or yearly installments, with a maximum repayment period of up to 10 years.

Moratorium Period

The moratorium period granted can range from 6 to 12 months, contingent upon the specific nature of the business activity undertaken by the entrepreneur.

Eligibility Criteria

This scheme is exclusively for entrepreneurs belonging to the Scheduled Caste category.

Exclusions

Specific exclusions apply as per the terms defined by NSFDC and SCAs.

Application Process

To apply for this scheme, interested and eligible individuals should follow these steps:

• Contact the nearest Channeling Agency. A list of agencies can be found at NSFDC Channeling Partners.
• Submit the loan application to the District Offices of the State Channelizing Agencies (SCAs), particularly for Scheduled Caste individuals with an annual family income of up to ₹3.00 lakh.
• District Offices will review and forward these applications to their respective Head Offices.
• The SCAs will assess the viability of project proposals and will send the feasible projects to NSFDC along with their recommendations.
• Eligible applicants can also approach other Channelizing Agencies of NSFDC such as Regional Rural Banks, Public Sector Banks, and NBFC-MFIs that have entered into Memoranda of Agreements with NSFDC.
• Project proposals will undergo appraisal by the Project and Banking Desk, followed by submission to the Project Clearance Committee (PCC) for approval.
• Upon approval, Sanction Letters referred to as Letters of Intent (LOIs) will be issued to the SCAs, RRBs, Public Sector Banks, or NBFC-MFIs.
• After acceptance of the terms and conditions, along with the fulfillment of applicable Prudential Norms, funds will be disbursed to the respective agencies for onward distribution to beneficiaries.
• Disbursement of funds will occur upon receipt of demand from the respective agencies, and beneficiaries are required to adhere to the repayment schedule established by SCAs or Channelizing Agencies.

Official Source

For more information, visit myScheme.gov.in.