National Minorities Development & Finance Corporation (NMDFC)

The National Minorities Development & Finance Corporation (NMDFC) was incorporated on 30th September 1994, with the objective of promoting economic activities amongst the backward sections of notified minorities. To achieve its objective, NMDFC is providing concessional finance for self-employment activities to eligible beneficiaries belonging to the minority communities, having a family income below double the poverty line. The authorised share capital of NMDFC which stood Rs.650 crore in 2004 now stands at Rs.1500 crore.

About NMDFC

The National Minorities Development & Finance Corporation (NMDFC)  is functioning under the administrative control of the Ministry of Minority Affairs, Government of India, with an objective to promote the economic & developmental activities for the benefit of the “Backward Sections’ amongst the notified Minorities, preference being given to the occupational groups & women. The NMDFC is a Public Sector Undertaking, registered under the Section 25 of the Companies Act 1956, as a “Company not for profit”.

Aims & Objectives

1. To promote economic and developmental activities for the benefit of "Backward Sections" amongst the Minorities, preference being given to the occupational groups and women;
2. 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 projects; under micro-financing scheme, group of individuals belonging to the minorities will include such groups in which pre-dominantly (75% and above) members belongs to the Minority Community. In very exceptional cases this may include those groups also where upto 60% members belong to Minority Community provided other members belong to Weaker Sections including Scheduled Castes / Scheduled Tribes, Other Backward Classes and disabled as per the EGM held on 01.11.1999 & CG approval vide letter 3/17/T-1/2000/D/8278 Dt. 09.02.2000;
3. To promote self-employment and other ventures for the benefits of Minorities;
4. 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;
5. 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;
6. To assist the up-gradation of technical and entrepreneurial skills of Minorities for proper and efficient management of production units;
7. 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;
8. 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
9. To help in furthering the Government policies and programmes for the development of Minorities.

Target Groups

The TARGET GROUPS for NMDFC with regard to direct benefit are the persons belonging to the Minority Communities . Minority Communities as per the National Minorities Commission Act, 1992 are MUSLIMS, CHRISTIANS, SIKHS, BUDDHISTS and PARSIS. Govt. of India vide notification dtd. 27.01.2014 has included the Jain community as a Minority members in addition to already notified five communities.

At present, the families having annual income up to Rs. 98,000 in Rural areas and Rs. 1,20,000 in urban areas are eligible under the NMDFC schemes. As a special initiative of NMDFC, a new annual family income eligibility limit of up to Rs. 6.00 lacs has been introduced with effect from September, 2014 by adopting the “Creamy Layer” criterion currently followed amongst the OBC community by Government of India.

The Community-wise break-up of Minority Population in India, as per 2011 census, is given below:

SNo	Community	Population (Crore)	%age of  Population
1	Muslims	17.22	14.2
2	Christians	2.78	2.3
3	Sikhs	2.08	1.7
4	Buddhists	0.84	0.7
5	Jain	0.45	0.4

Schemes and Programmes of NMDFC

Lending Schemes

Term Loan Scheme

This scheme is for individual beneficiaries and is implemented through the SCAs. Under the Term Loan Scheme, projects costing up to Rs 20.00 Lakhs are considered for financing. NMDFC provides loan to the extent of 90% of the project cost subject to a maximum of Rs 18.00 lacs. 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 rate of interest charged from the beneficiary is 6% p.a. on reducing balance method.

Assistance under Term Loan Scheme is available for any commercially viable and technically feasible venture, which for the purpose of convenience, are classified into the following sectors.

1. Agriculture & allied
2. Technical trades
3. Small business
4. Artisan and traditional occupations
5. Transport and services sector

S. No.	Parameters	Scheme Details
1	Loan Amount	Up to Rs 20.00 Lakhs
2	Rate of Interest for beneficiaries	6% p.a.
3	Rate of Interest for SCAs	3% p.a.
4	Moratorium period	6 months
5	Repayment  period for beneficiaries	5 years
6	Repayment period for the SCAs	8 years
7	Means of Financing NMDFC: SCA:Benef. contribution	90 : 5 : 5
8	Utilization Period	3 Months

Educational Loan Scheme

This scheme is also for the individual beneficiaries and is implemented through the SCAs. The NMDFC extends educational loans with an objective to facilitate job oriented education for the eligible persons belonging to Minorities. Under this scheme, loan of up to Rs 15.00 Lakhs is available at the rate Rs 3.00 lakhs p.a. for ‘technical and professional courses‘ of durations not exceeding five years. Further, for courses abroad, maximum amount of Rs 20.00 lakhs is available @ Rs 4.00 lakhs per annum for a course duration of maximum 5 years. Funds for this purpose are made available to the SCAs at an interest rate of 1 % p.a. for on-lending to the beneficiaries at 3% interest p.a. The loan is payable in maximum five years after completion of the course.

S. No.	Parameters	Scheme Details
1	Loan Amount Maximum	Loan amount / beneficiary -Up to Rs 20.00 Lakhs for ‘Courses Abroad’ with a maximum duration of 5 years @ Rs 4.00 Lakhs per annum.
2.	Rate of Interest for beneficiaries	3%p.a.
3.	Rate of Interest for SCA	1%p.a.
4.	Moratorium period	6 months after completion of the course or getting a job, whichever is earlier.
5.	Delegated authority to SCA tosanction loan	SCAs are advised to sanction/disburse loan based on ground reality.
6.	Repayment period for beneficiaries	5 years
7.	Repayment period for the SCA	5 years
8.	Means of FinancingNMDFC :  SCA :  Beneficiary contribution	90 : 5 : 5

Micro Financing Scheme

Under the Micro Financing Scheme, micro-credit is extended to the members of the Self Help Groups (SHGs), specially the minority women scattered in remote villages and urban slums who are not able to take advantage of the formal banking credit as well as the NMDFC programmes, through its SCAs. NMDFC is implementing the scheme on the pattern of Grameen Bank of Bangladesh and Rashtriya Mahila Kosh (RMK). The scheme requires that the beneficiaries are organized into Self Help Groups (SHGs) and get into habit of Thrift & credit, however small.

The scheme envisages micro-credit to the poorest among the poor through NGOs of proven track-record and their network of Self Help Groups (SHGs). It is an informal loan scheme which ensures quick delivery of loan at the door steps of the beneficiaries. Under this scheme, small loans up to a maximum of Rs 1.00 lacs per member of SHG are provided through the NGOs / SHGs. The scheme is implemented through the SCAs as well as the NGOs. Funds are given to the NGOs /SCAs at an interest rate of 1%, which further on-lend to the SHGs, at an interest rate not more than 7% p.a. The repayment period under the scheme is maximum of 36 months.

Sl.No	Parameters	Scheme Details
1.	Loan Amount	Up to Rs 1.00 lac  per member of SHG
2.	Rate of Interest for SCA	l% p.a.
3.	Rate of Interest for NGOs by SCAs	2% p.a. (Margin for SCA 1 %)
4.	Rate of Interest for SHGs by NGOs	7% p.a. (Margin for NGO 5%)
5.	Rate of Interest for SHGs by SCAs	7% p.a. (Margin for SCA 6%)
6.	Rate of Interest for Beneficiaries/SHGs	7% p.a.
7.	Rate of Interest for NGOs by NMDFC directly	1 % p.a. (Margin for NGO 6% p.a.)
8.	Moratorium period	3 months
9.	Delegated authority to SCA to sanction loan to NGOs/Federation	Limit of  Rs 25 Lakhs per NGO/Federation.
10.	Repayment period for the Beneficiaries	3 years
11.	Repayment period for the SCAs/NGOs	4 years / 3 years
12.	Utilization Period for the SCAs /NGOs	3 months / 1 month
13.	Means of Financing NMDFC : SCA : Beneficiary contribution	90 : 5 : 5

Mahila Samridhi Yojana

It is a unique scheme linking micro-credit with the training to the women members to be formed in to SHGs, in the trades such as tailoring, cutting and embroidery, etc. It is being implemented by NMDFC, through the State Channelising Agencies of NMDFC as well as NGOs. Under the Mahila Samridhi Yojana, training is given to a group of around 20 women in any suitable women friendly craft activity. The group is formed into Self Help Group during the training itself and after the training, micro-credit is provided to the members of the SHG so formed. The maximum duration of the training is of six months with maximum training expenses of Rs 1,500 p.m. per trainee. During the training a stipend of Rs 1,000 p.m. is also paid to the trainees. The training cost and stipend is met by NMDFC as grant. After the training, need based micro credit subject to a maximum of Rs 1.00 lac is made available to each member of SHG, so formed at an interest rate of 7% p.a.

Promotional Schemes

Vocational Training Scheme

The Vocational Training Scheme of NMDFC aims at imparting skills to the targeted individual beneficiaries leading to self/wage employment. The scheme is implemented through the State Channelising Agencies, which organize need based vocational training programmes in their States with the help of local Government owned / recognized training institutes in trades having potential for self/wage employment. The cost of the training programme is upto Rs.2000 per candidate per month for courses of maximum duration of 6 months. Stipend @ Rs.1000 per month per trainee is also offered during the training. As per the scheme 90% of the training cost is met by NMDFC as a grant while the remaining 10% is borne by the SCA. The SCAs are required to submit their proposals to NMDFC in the prescribed formats for approval / release of funds.

Marketing Assistance Scheme

The Marketing Assistance Scheme is meant for individual crafts-persons, beneficiaries of NMDFC as well as SHGs and is implemented through both SCAs as well as NGOs. With a view to support the crafts-persons to promote marketing & sale of their products at remunerative prices, NMDFC assists the SCAs and NGOs in organizing State / District level exhibition at selected locations. In these exhibitions, handloom / handicraft products of Minority crafts-person are exhibited and sold. Such exhibitions also serve the purpose of organizing “buyer seller meet”, which is considered very useful for product development and market promotion, for domestic market as well as for exports. NMDFC provides grants for organizing exhibitions, as per the specific guidelines of the scheme, after due appraisal of the proposals.

Assistance for Design Development/Skill Up-gradation

In this fast changing world people’s perception, likings and tastes are changing rapidly. Therefore the handloom & handicraft items, produced by the crafts-person have to be in line with the latest designs and aesthetics as well as competitive in terms of cost. Crafts-person may require exposure to new designs and training to upgrade their skills to meet this challenge. NMDFC considers proposals furnished by the SCAs as well as NGOs for organizing design development / skill development training programmes for the benefit of crafts-persons belonging to the Minority Communities. After due appraisal, depending upon the merits of the proposals, NMDFC provides grant for organizing such programmes.

Illustrative List of Schemes

AGRICULTURAL & ALLIED SECTOR
Pump set with Shallow	Bullock driven Cart
Tubewell	Dairy Unit
Jasmine cultivation	Mushroom Cultivation
Poultry (Broiler)	Power Tiler
ARTISANS SECTOR
Barber Shop (Rural/Urban)	Carpentry
Cotton Weaving	Laundry Unit (Dhobi)
Powerloom Project	Wood Carving
Handloom Weavers Silk	Embroidery Works
SMALL BUSINESS SECTOR
Bakery Shop	Book Shop
Cycle Rickshaw Repair	Dhaba Unit
Cable T.V./Dish-antenna	Electric/Electronic Shop
Electric/Manual Typewriter	Fast Food Restaurant
Foot Wear Shop	Fruit & Vegetable Shop
Fruit/Veg. Vendor (mobile)	General Store
Juice and Cold Corner	Meat Shop
Pan Shop	Pest./Fertilizer/Seed Shop
Photocopy Center	Ready made Garments
Reksin Works	Small Business
Bangle Shop	Book Binding
STD/ISD/PCO Shop	Sweet/Namkeen Shop
Tea Shop	Tyre Repairing Shop
Hardware Store
TECHNICAL TRADE SECTOR
Advertising Agency	Aluminum Fabrication
Arc Welding	Architect Consultancy
Audio/Video Servicing	Auto Repair (2 Wheeler)
Autoelectric Workshop	Automobile Repair (LMV)
Automobile Repair (HMV)	Babui/Jute Rope Mfg.
Battery Servicing	Videography
Beauty Parlour	Bicycle Hiring and Repair
Civil Engg. Consultancy	Dental Clinic
DTP Unit	Electric Motor Rewinding
Small Restaurants	Stationery Shop
Electric Repair Shop	Electronic Repair Shop
Flour Mill	Foot Wear Manufacturing
Gas Welding	Fabrication Unit
Lathe Machine	Laundry Unit (Modern)
Medical Shop	Oil Expeller
Photography	Plumber Shop
Printing Press	Spray Painting Unit
Tailoring Shop	Tailoring cum Readymade Garments
Videography
TRANSPORT SECTOR
Autorickshaw Diesel	Autorickshaw Petrol
Car Texi/Maruti Van	Jeep Taxi
Loading Autorickshawuse

Related Resources

1. List of State Channelising Agency
2. Guidelines for Implementation of Micro Financing Schemes of NMDFC

Source: NMDFC