The National Scheduled Castes Finance and Development Corporation (NSFDC), under the Ministry of Social Justice and Empowerment, Government of India, has launched the “Micro Credit Finance” scheme to uplift individuals from the Scheduled Caste (SC) community. This initiative provides financial assistance for income-generating activities, enabling beneficiaries to improve their socio-economic status through self-employment opportunities. By offering loans up to ₹1.25 lakhs at affordable interest rates, the scheme supports small-scale businesses such as betel leaf shops, bakeries, candle making, goat rearing, beauty parlours, and more.

Objective of NSFDC MCF Loan

The primary objective of the “Micro Credit Finance” scheme is to provide financial support to economically disadvantaged SC individuals, partnership firms, and cooperative societies for establishing or expanding income-generating ventures. The scheme focuses on promoting entrepreneurship and fostering economic empowerment among marginalized communities.

Key Benefits of the Scheme

1. Loan Amount:
   • NSFDC provides loans up to 90% of the project cost, with a maximum loan amount of ₹1.25 lakhs.
   • The scheme covers units costing up to ₹1.40 lakhs.
2. Affordable Interest Rates:
   • NSFDC charges an interest rate of 2.5% per annum from State Channelizing Agencies (SCAs)/Channelizing Agencies (CAs).
   • Beneficiaries are required to pay an interest rate of 6.5% per annum.
3. Flexible Repayment Period:
   • Loans are to be repaid in quarterly instalments within a maximum period of three years, including a 3-month moratorium period.
4. Wide Range of Eligible Activities:
   • The scheme supports diverse income-generating activities such as goat rearing, vegetable vending, incense stick making, tea shops, papad manufacturing, and other viable ventures.

Eligibility Criteria

To qualify for the benefits under this scheme, applicants must meet the following conditions:

1. Community: The applicant must belong to the Scheduled Caste community.
2. Income Limit: The annual family income should not exceed ₹3,00,000 (both in rural and urban areas).
3. Partnership Firms/Cooperative Societies:
   • All members must belong to the Scheduled Caste community.
   • The annual family income of each member should not exceed ₹3,00,000.

Note: Eligibility verification is the responsibility of the State Channelizing Agencies (SCAs)/Channelizing Agencies (CAs), but NSFDC reserves the right to re-verify.

How to Apply – Offline Process

The application process for the scheme is offline and involves coordination with State Channelizing Agencies (SCAs) or other authorized institutions. Here’s how you can apply;

1. Contact the District Office:
   Visit the District Office of the concerned State Channelizing Agency (SCA) or authorized institution such as Regional Rural Banks (RRBs), Public Sector Banks (PSBs), or NBFC-MFIs.
2. Submit Application:
   Fill out the application form in NSFDC’s prescribed format and attach necessary documents, including caste certificate, income certificate, and business details.
3. Scrutiny by SCA/CA:
   The District Office scrutinizes the application to ensure compliance with eligibility criteria.
4. Forwarding for Processing:
   Scrutinized applications are forwarded to the Head Office of the SCA/CA for further processing.
5. Project Appraisal:
   The Head Office assesses the viability of the proposed project and recommends it for sanction.
6. Approval by NSFDC:
   The Project Clearance Committee (PCC) reviews the appraisal report and issues a Letter of Intent (LOI) if approved.
7. Loan Disbursement:
   After fulfilling prudential norms, funds are disbursed by NSFDC to the SCA/CA, which then transfers the amount to the beneficiary.
8. Loan Repayment:
   Beneficiaries repay the loan in quarterly instalments as per the repayment schedule.

Important Note: Direct applications or correspondence with NSFDC are not entertained. Applicants must apply through authorized SCAs/CAs.

Necessary Documents for Application

To ensure smooth processing of your application, make sure you have the following documents ready;

• Passport-size photograph
• Aadhaar Card
• Income certificate
• Caste certificate
• Residence proof
• Bank passbook or bank account details
• Any other relevant documents as specified

Why Is This Scheme Important?

Access to affordable credit is critical for the economic empowerment of marginalized communities. For Scheduled Caste individuals, who often face barriers in accessing formal banking services, this scheme serves as a lifeline. By supporting income-generating activities, the scheme promotes entrepreneurship, reduces poverty, and fosters inclusive growth.

Frequently Asked Questions (FAQs)

Q1. What is NSFDC?
A1. NSFDC stands for National Scheduled Castes Finance and Development Corporation, a government body under the Ministry of Social Justice and Empowerment that provides financial assistance to SC individuals for income-generating activities.

Q2. What is the maximum loan amount provided under this scheme?
A2. The maximum loan amount is ₹1.25 lakhs, covering up to 90% of the project cost.

Q3. What activities are eligible for funding under the scheme?
A3. Eligible activities include betel leaf shops, bakeries, candle making, goat rearing, vegetable vending, incense stick making, tea shops, papad manufacturing, and other similar viable ventures.

Q4. What is the interest rate charged under this scheme?
A4. NSFDC charges 2.5% per annum from SCAs/CAs, while beneficiaries pay 6.5% per annum.

Q5. What is the repayment period for the loan under this scheme?
A5. The repayment period is a maximum of three years, including a 3-month moratorium period.

Q6. Who is eligible to apply for the Micro Credit Finance scheme?
A6. Individuals from the Scheduled Caste community with an annual family income of less than ₹3,00,000 are eligible.

Q7. Can partnership firms and cooperative societies apply for the loan?
A7. Yes, provided all members belong to the Scheduled Caste community and meet the income criteria.

Q8. Where can applicants apply for the loan?
A8. Applications must be submitted through State Channelizing Agencies (SCAs), Regional Rural Banks (RRBs), Public Sector Banks (PSBs), or NBFC-MFIs authorized by NSFDC.

Q9. Can applicants directly contact NSFDC for the loan?
A9. No, direct applications or correspondence with NSFDC are not entertained.

Q10. How are the loan amounts disbursed to the beneficiaries?
A10. Funds are disbursed by NSFDC to the SCA/CA, which then transfers the amount to the beneficiary.

Conclusion

The “Micro Credit Finance” scheme by NSFDC is a transformative initiative aimed at empowering Scheduled Caste individuals and promoting self-employment opportunities. By providing affordable credit and supporting income-generating activities, the scheme plays a vital role in reducing economic disparities and fostering inclusive development. If you’re an SC individual looking to start or expand a small business, don’t miss out on this opportunity to secure financial assistance.

Scheme Details & Notification

For more information, visit the official NSFDC website or contact your nearest State Channelizing Agency today!