Scheme for Financing Self Help Groups (SHGs)
Key Features
Homogeneous groups of members having same social, economic and financial background to ensure easier and free interaction among them. Voluntarily formed to save and mutually contribute to a common fund to be lent to its needy members for consumption and investment purposes. These funds may be supplemented by funds accessed from external institutions.
Nature of facility - Term Loan /Cash Credit/Demand Loan
Eligible limit - Maximum loan per SHG member is Rs. 2,00,000/-
Period - Maximum 84 months
Quantum of finance - Need based loans supported by Micro Credit Plan
Security - Primary: Hypothecation of assets wherever created.
Guarantor/ Co-obligants - Nil
Turn Around Time - Max 30 Days subject to satisfaction of internal lending guidelines
Purpose
- Consumption purpose - Emergency needs like illness in family, marriage etc.
- Investment or buying of assets for income generation or any income generating programme in the nature of short gestation period and can provide immediate and perennial income.
- Renovation, repairs, extension of house etc.
- Debt swapping
- Bank loan shall not be utilized by the SHG for financing a defaulter member.
Eligibility
- Group of 10-20 members in active existence for at least a period of six months and successfully undertaken savings and credit operations out of its own resources.
- From one family only one member
- Group need not be registered
Rate of interest
As mutually decided by bank and SHG Promoting Institution
Processing Fee & Other Charges
Processing Fee
- Up to Rs.50000/- (per SHG member): Nil
- Above Rs.50000/- (per SHG member): As mutually decided by bank and SHG Promoting Institution
Other Charges
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