FAQ

NMDFC was incorporated on 30th September, 1994 with the objective of promoting
economic and developmental activities for the benefit of ‘’backward sections’’
amongst the notified minorities with preference given to occupational groups and
women

The Government of India jointly with the respective State Governments/UT
Administrationsare the promoters of NMDFC. However initially, State Governments of
Andhra Pradesh, Bihar, Karnataka and Uttar Pradeshhave promoted NMDFC
along with the Central Government. 

I. Provision of Term Loans for income generating activities at concessional rate of
   interest, through the State Channelizing agencies.
II. Provision to meet credit requirements of Artisans, both in terms of Working Capital
    & Fixed Capital requirement under Virasat scheme.
III. Providing Micro Finance to the poorest of poor among minorities through
    SCAs/NGOs& Network of Self Help Groups (SHGs).
IV. Providing Educational Loans to persons belonging to minorities.
V. Skill Development Training for the welfare of Minority Communities under Kaushal
    se Kushalta scheme with a view to help them in wage/self-employment.
VI. Marketing Assistance to Artisan and Craft persons for sale/display of their
     products.
VII. MahilaSamridhiYojana aims to provide training to women in employment oriented
      skills. 

Target groups for NMDFC with regard to direct benefits will be persons belonging to
minority communities. At present, Minority communities as per National Minorities
Commission Act, 1992 are Muslims, Sikhs, Buddhists, Christians, Parsis. Further,
Govt. of India vide notification dated 27.01.2014 has included the Jain community
amongst Minorities in addition to already notified five communities.
Families having annual income upto Rs.98,000 in rural areas and upto Rs.1,20,000 in
urban areas are the target group of NMDFC. 

As a special initiative by NMDFC, a new annual household income eligibility limit of up
to Rs.6.00 lacs has been introduced with effect from September, 2014. This limit has
been further enhanced from Rs.6.00 lacs to Rs.8.00 lacs w.e.f. 13/11/2020. 

Because NMDFC is the joint venture of States and Central Government. 

Share of each State/UT Governments in the equity of NMDFC has been earmarked in proportion to its population of minorities. The information of earmarked share and the contribution received by 31/03/2022 is as given below:

NMDFC has two channels to reach to the ultimate beneficiaries; 

(i)    through the State Channelizing Agencies (SCAs) nominated by respective
       State/UT Government; generally each ChannelizingAgency has an office at
       district level where the beneficiary is required to make formal application.
(ii)    through the network of NGO/SHGs for micro-credit.
(iii)   through Branches of Canara Bank. Mou has been signed by NMDFC with
       Canara Bank to implement NMDFC schemes across the country and
        particularly in States/UTs where SCAs are dysfunctional. 

NMDFC has 45 State Channelizing Agencies (SCAs) in 27 States and 8 UTsfor implementation of NMDFC schemes. Out of total 45 SCAs, 39 SCAs are operational while 6 SCAs are Non-Operational. The following is the list of Operational & NonOperational SCAs nominated by their respective States/UTs:-

List of Non-operational SCAs of NMDFC

State of Telangana has not nominated the SCA for NMDFC so far.

So far, 16 States have nominated Minority Corporations to operate as State Channelising Agency (SCA) of NMDFC. The name of States who have nominated Minority Development corporations as SCA of NMDFC are as follows:-

SCAs in the following States/UTs have not availed NMDFC assistance so far;

STATES    Arunachal Pradesh, Meghalaya and Telangana. 

UTs :         Dadra & Nagar Haveli, Lakshadweep, Daman and Diu, Andaman and Nicobar. 

Out of total 39 operational SCAs, 30 SCAs are functional as they have availed funds from NMDFC during last seven years. The list of Functional SCAs are as follows:- 

Name of the Functional State Channelizing Agencies (SCAs) of NMDFC STATES

UNION TERRITORIES

Out of total 39 Operational SCAs, 9 SCAs are Non-Functional as they have not availed funds from NMDFC during last five years. The list of Non-Functional SCAs are as follows:-

Name of the Non-Functional State Channelizing Agencies (SCAs) of NMDFC

Out of total 45 SCAs, 30 SCAs are Functional, 9 are Non-Functional while following 6 SCAs are Non-Operational as the State Govts/SCAs have not completed codal formalities for availing funds from NMDFC :-

List of Non-operational SCAs of NMDFC

The concessional credit line of NMDFC is bifurcated into two streams. Following are the financial assistance schemes of NMDFC:-
Credit Line 1:- is the existing stream of concessional credit, being disbursed on the basis of annual family income limits of upto Rs.98,000 p.a. for rural areas &upto Rs.1.20 lacs in urban areas.

Credit Line 2 :- concessional credit is provided to the section of Minority population with annual family income of up to Rs.6.00 lacs, defined on the basis of “Creamy Layer” criterion of OBC by Government of India. This limit has been further enhanced from Rs.6.00 lacs to Rs.8.00 lacs w.e.f. 13/11/2020.

A.Lending Schemes

i Term Loan Scheme

This scheme is for individual beneficiaries and is implemented through the SCAs. The detail of Term Loan scheme under Credit Line -1 & Credit Line -2 is as follows:-

ii. VIRASAT SCHEME:-                                                                                                                                                                                                                                                                                                                                                                                                          This scheme has been launched with the objective to meet credit requirements of the Artisans, both in terms of Working capital requirement & Fixed capital requirement for purchase of equipment/tools/machineries. Maximum loan of upto Rs.10.00 lacs can be availed under the scheme. The detail of the scheme is as follows:-

iii 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 is available for 'technical and professional courses' of durations not exceeding five years. The detail of Education Loan scheme under Credit Line -1 & Credit Line -2 is as follows:-

iv 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. 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 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. The detail of Micro-Finance scheme under Credit Line -1 & Credit Line -2 is as follows:-

B.Promotional Schemes 

i.Kaushal Se Kushalta Scheme

The Kaushal Se Kushalta 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 skill development training in their States with the help of agencies empanelled by NSDC/ related Sector Skill Council/ State Skill Mission/ Directorate of Technical Education. Preferably be accredited through NSDC SMART portal. Further, PIAs are also being empanelled for implementing the scheme as per the approval accorded by the Board of NMDFC.                                                                                                                                                                                                                                                                                                                                                                      The SCAs are required to submit their proposals to NMDFC in the prescribed formats for approval/release of funds. Brief details of this scheme is as under:

ii) 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 exhibitions at selected locations. In these exhibitions, hand loom /handicraft products of Minority crafts-persons 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 as detailed below:-

 "HunarHaat" Exhibitions

As a remarkable initiative, the Ministry had tasked NMDFC to organise HunarHaat under the USTTAD scheme to provide marketing platform and promote the traditional Art and Cuisines of the artisans/culinary experts belonging to Minority communities. During last 5-6 years starting with 2016- 17, NMDFC has organized 19HunarHaat in different cities/locations such as IITF - 2016, 2017, 2018, 2019 and 2021PragatiMaidan; New Delhi; Baba Kharak Singh Marg; Connaught Place; New Delhi – 2017, 2018 and 2019; Gandhi Thidal Puducherry-2017 and 2018; Islam Gymkhana, Mumbai; Shilp Gram, Allahabad; BandraKurla Complex, Mumbai; Jawahar Kala Kendra, Jaipur; Sabarmati River Front in Ahmedabad; People’s Plaza, Necklace Road, Hyderabad; Jawahar Nagar, Indore and HARMU Ground, Ranchi, Maharaja College Ground, Chamarajapuram, Mysore and presently the 20th Hunar Haat is going at Veterinary College Ground,Khanapara, Guwahati                                                                                                                                                                                                   The handmade exquisite products brought by the Artisans and Traditional Food items were highly appreciated by large number of visitors and dignitaries with sale of over Rs.38.35 crs.registered during these HunarHaats including bulk orders from buyers and business houses. The stalls were provided free of cost besides TA/DA was also given to the participants. The participants were very appreciative of the initiative of the Ministry to provide them such marketing support.                                                                                                              The HunarHaat has been successful in establishing itself as Brand Equity has been acclaimed as grand success by print and electronic media, domestically as well as internationally.

iii MahilaSamridhiYojana

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 Channelizing Agencies of NMDFC. Under the MahilaSamridhiYojana, 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 lace is made available to each member of SHG, so formed at an interest rate of 7per p.a.

Yes, the funds are lent by NMDFC to:-

a). the State Channelizing Agencies against State Government Guarantee

b). while the funds are provided to NGOs against the concrete security.  

NMDFC has advised that the SCAs may also seek security from the beneficiaries for the loans disbursed to them. The type of security to be taken from the beneficiaries is to be decided by the SCAs. The norms of security should be such that the poor beneficiaries are able to meet them while necessary leverage for recovery of loan is also available to the lender. In general following security provisions are advised:- a) For Loans upto 1,00,000 Self-Guarantee& Post Dated Cheques b) For Loans exceeding Rs.1,00,000 and upto Rs.5,00,000/- Guarantee of one employee of PSU/Govt./Bank or one income tax payee/ Public Representative. & Post Dated Cheques c) For loans exceeding Rs.5,00,000/- Guarantee of two employees of Govt./PSU/Bank or two income tax payee/ Public Representative or Guarantee from owner of property which is pledged as collateral. OR Collateral by way of Mortgage of landed property/Immovable Property of not less than the same value. & Post Dated Cheques 

Further, the SCAs have also been advised to become member of the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) to help beneficiaries who are not able to provide collateral security for the loan availed under NMDFC scheme. In such a case, the interest rate charged from the beneficiary would increase for payment of commission to the CGTMSE. 

NMDFC finances any viable and bankable proposal with maximum project cost of Rs.20 lac under Credit Line-1 & Rs.30.00 lacs under Credit Line-2. However, proposals could be categorised in the following sectors:-

1.AGRICULTURE & ALLIED
This includes schemes such as animal breeding, poultry farming, bee- keeping  etc.

2.TECHNICAL TRADES
These include technical trades at village/taluka level such as electrician, plumber, sheet metal, TV/Radio repair, motor mechanic, tyre puncture repair, cycle/taxi/auto rickshaw repairing and vulcanization, refrigeration mechanic etc.

3.SMALL-BUSINESS
These include small business/tea shop/pan shop, egg sale/general provision shop/laundry, popcorn/text book shop magazine shop, newspaper, vendor, photocopier service, typewriting and word processing service etc.

4.ARTISAN AND TRADITIONAL OCCUPATIONS
Occupation includes Embroidery work, wood carving, safety match boxmanufacturing, manufacturing of papad, jams, pickles, ready-made garments etc.                                                                                                                                                                                                   

5.TRANSPORT & SERVICES SECTOR
Includes plying of auto-rickshaws, cycle rickshaws, tempos, bullock and otheranimal driven carts for hire, cycle hiring service etc.

The sector-wise detail of funds Utilization is given below:-

So far since inception, NMDFC has disbursed an amount of Rs.7124.74 crs.to1995167 beneficiaries from Minority communities. State-wise disbursement of funds and the number of beneficiaries assisted up to 31.03.2022 is as given below:

Following is the Community-wise break-up of funds utilized under NMDFC schemes during the 9 years (2010-11 to 2018-19):-

The following is the ratio of fund disbursed to respective States vis-à-vis the ratio of their minority population :-

Following is the Gender-wise break-up of funds utilized under NMDFC schemes:- 

In Percentage

Following is the Rural-Urban break-up of funds utilised under NMDFC:-                                                                                                                                 

In Percentage

The Education Loan Scheme of NMDFC was started in the year 2003-04. So far, NMDFC has disbursed an amount of Rs.370.70 Crores to over 39561beneficiaries under the Education Loan scheme. The State wise utilization of Rs.205.60 crs for over 14,937 beneficiaries under Education Loan scheme during last 5 years is as follows:-

The present level of recoveries is93.36% under Term Loan Scheme and 99.17% under Micro-Finance Scheme (as on 28.02.2022).

Thetotal over dues of SCAs under NMDFC scheme is Rs. 215.52crores. The over dues in respect of major defaulting SCAs is as follows:-

NMDFC has been following with the State Channelising Agencies (SCAs) & their respective State Governments for settlement of over dues. Legal notice was also issued to SCAs with a copy to the State Government, which stands as Guarantor, for the loan by the SCAs from NMDFC.
The NMDFC has also offered One Time Settlement (OTS) to the State Channelising Agencies (SCAs) & their respective State Governments for settlement of overdues. Under the OTS scheme, NMDFC would waive penal interest/Simple Interest depending on payment terms.
During the 4 financial years i.e. form 2013-14 to 2016-17,NMDFC has realized Rs.126.84 crores under the OTS scheme by waiving penal interest of Rs.53.49crores as per following detail:-

* Rs.6.76 crs. pertaining to Uttrakhand has been removed from the overdue of UPMFDC.
After settlement of over dues under OTS, NMDFC has been able to revive the SCAs in the States of Gujarat & Haryana (during F.Y. 2015-16) and resume financing of poor Minority beneficiaries in these two States. Further, during the financial year 2016-17 NMDFC has also resumed financing in JKSCSTFDC, J&K.
SCA in UP has also started implementation of NMDFC schemes from 2019-20.

The following is the detail of Recovery of SCAs from beneficiaries viz-a-viz their Repayment to NMDFC:-  

•  NMDFC has directed its SCAs to use AADHAR numbers while identifying the beneficiaries and link their loan accounts with their AADHAR numbers.                                                                                                                                                                                                                                                                           
•  Wherever the facility of AADHAR is not available, the SCAs have also been advised to use any other bio-metric feature of the beneficiary, to avoid duplication / impersonation and for ensuring greater transparency.                                                                                                                                                                       
•  Most of the SCAs have started AADHAR linked financing.                                                                                                                                                                                                                                                                                                                                                                                                                          
• Linking of AADHAR numbers for extending benefits to the notified Minority beneficiaries has been introduced from 01.01.2015.  

• SCAs have been advised to open Bank Account of beneficiaries under the Jan DhanYojana& link these accounts with AADHAR number or KYC of beneficiaries.                                                                                                                                                                                                                                                 
• Transfer of loan through RTGS/NEFT directly in bank accounts of beneficiaries has been made mandatory under the lending policy of NMDFC, for quick delivery of benefits to the loanee.                                                                                                                                                                                                     
• SCAs have been directed to ensure DBT from 1st April, 2016.  

For safety of the loanees& their family members in the event of any mishap, insurance of beneficiaries & their assets has been made mandatory part of lending policy of NMDFC. The SCAs have been directed to undertake the following:-

• Insurance of beneficiaries against death/disabilities and the assets at the time of financing. For this purpose, the SCA should enter into an understanding with an insurance company for insuring the beneficiaries and their assets. The SCA should be made nominee of the insurance claim to the extent of the loan outstanding and the balance claim amount be given to the nominee of the beneficiary, in the event of any untoward incident.                                                                                                                                                                                                                                                                                                                          
•  Beneficiary may also be motivated to subscribe to PradhanMantriSurakshaBimaYojna (PMSBY) &PradhanMantriJeevanJyotiBimaYojna (PMJJBY) linked with their bank account at the time of loaning.                                                                                                                                                                                    
•  Beneficiaries should also be persuaded to subscribe to Atal Pension Yojana (APY) as there is guaranteed minimum monthly pension for the subscribers ranging between Rs.1000 and Rs.5000 per month. 

•  NMDFC conducts “beneficiary verification” and “impact assessment study” through independent third party organizations / agencies to assess the impact of NMDFC financing and also to check the mis-utilization, duplicity & diversion of funds.                                                                                                                                                          
•  NMDFC gets verification of beneficiaries every year of at least 10 beneficiaries financed by it, two years ago.                                                                                                 
• The study has been conducted through National Institute of Entrepreneurship & Small Business  Development (NIESBUD), NOIDA under Ministry of Small Medium &Micro Enterprises & Centre for  Market Research & Social Development, New Delhi –an agency empanelled with Ministry of Minority Affairs.  Independent empanelled monitors , mostly retired government officers were also  engaged for undertaking beneficiary work by NMDFC                                                      
• The detail of impact assessment studies and the beneficiary verification works carried-out by  NMDFC is given below:-

The total Minority Population of the country as per 2011 census is 23.47 crores. As per the poverty line data for the country, it is expected that 22% of the population is below the poverty line however, the annual family income criterion under NMDFC loaning is upto Rs.98,000 for rural areas &upto Rs.1.20 lacs in urban areas. Thus, it is assumed that about 35% of the minority population fall within the target

Income criterion of NMDFC. By the above logic, it works out that 8.20 crores persons amongst the minority population is within the annual income target group of NMDFC. If the average size of the family comprise of 5 persons, then there are 1.76 croresmembers which can be considered as target group of NMDFC. So far, NMDFC has been able to extend credit to over 19.78lacs beneficiaries (as on 28.02.2022) under its financing program.

• The GIA scheme was started in the year 2007-08.
• The objective of the Grant-In-Aid scheme is to strengthen the infrastructure of the SCAs in order to improve their operations including recovery of loans.
• The scheme is implemented by the Ministry of Minority Affairs through NMDFC.
• The scheme is available for all performing SCAs of NMDFC.
• Assistance is available for following activities:-
  • a. Awareness Campaign
  • b. Improvement in Delivery System of SCAs
  • c. Loan Recovery
  • d. TA/DA for staff /officers of SCA limited to 5% of total GIA sanctioned in a year.
• No Capital Assets or permanent liability can be created under the scheme.

• So far since inception of the GIA scheme in 2008-09, an amount of Rs.28.81crores has been released to SCAs.
  • State wise cumulative funds disbursed by NMDFC to its State Channelising Agencies (SCAs) under the Grant-In-Aid scheme of Ministry of Minority Affairs is given below:-

NMDFC’s Lending Policy emphasizes on NEED BASED FINANCING i.e. financing as per the need of the beneficiaries (nature of project, quantum of funds) and need of the area (number of units). To achieve this objective, SCAs have been delegated with powers and required freedom and flexibility in working, as given below:-

a). For wider coverage of beneficiaries under the financing schemes of NMDFC, the SCAs may consider to extend mostly small quantum of loans. Out of total disbursement of credit by an SCA,

• i). 70 percentage of the loans financed must be for loans not exceeding Rs.5.00 lacs per beneficiary,
• ii). 20 percentage of the loans financed may be greater than Rs.5.00 lacs but less than Rs.10.00 lacs and
• iii). Only 10 percentage of total loan financed could be for projects with loans greater than Rs.10.00 lacs.

b). Number of units to be financed under any scheme at any location will be decided by the SCA.
c). Loan upto Rs.5.00 lacs may be treated as composite loan while for loan beyond Rs.5.00 lacs, the working capital component must not exceed 40 percentage of total loan amount.
d). Education loan is part of Term Loan & must not exceed beyond 20 percentage of the Term Loan extended by the SCA during a year. Out of this, 10 percentage should be for fresh Education Loan cases & balance 10 percentage for old cases.
e). Preference should be given for Education Loan to students who have secured admission to Government Institutions. Education Loan should be extended only for courses with good employment prospects. Out of total Education Loan cases financed by an SCA in a year, 90 percentage cases should be for domestic courses only. Preference should be given to short duration course with high employment potential.
f). Loans of more than Rs.5.00 lacs should be disbursed in 2 installments. After disbursement of first 50 percentage of the sanctioned loan, verification of its utilization should be conducted by the SCAs before release of further funds to the beneficiaries. Details of all such cases should be uploaded on the website of SCAs before disbursement of loan to the beneficiaries.
g). Beneficiary selection will be the sole-responsibility of the SCAs who fulfill the basic eligibility criteria and are found suitable for their chosen project as well as from socio economic angle through well laid-out selection procedures. The SCAs will also evaluate the techno-economic viability of the project submitted by the beneficiary for final selection of the beneficiary.
h). Follow up with the beneficiaries to check up whether the assets as per the sanctioned scheme have been purchased and are being used for the purpose sanctioned.
i). Effecting recoveries from the beneficiaries for the disbursed amount and making repayments to NMDFC on Quarterly basis.
j). Providing to NMDFC report on the utilization of funds along with the list of beneficiaries from time to time, quarterly report on actual recoveries from the beneficiaries etc.

So far, NMDFC has sanctioned vocational training program involving outlay of Rs.14.05 crores for over 23,723 trainees. The State-wise detail of sanction accorded by NMDFC is as follows:-

So far, NMDFC has sanctioned Kaushal se Kushalta training program involving outlay of Rs.95.63 lacs for 720 candidates. The State-wise detail of sanction accorded by NMDFC is as follows:-

Note: * :Training yet to be commenced.

So far,NMDFC has sanctioned exhibitions under the Marketing Assistance scheme involving outlay of Rs.1091.63lacs for over 37,438artisans/SHG members. The State-wise detail of sanction accorded by NMDFC is as follows:-

So far, NMDFC has sanctioned training programs under MahilaSamridhiYojana (MSY) involving cumulative outlay of Rs.249.41 lacsfor 2804 women from Self Help Groups members. The scheme is implemented through the SCAs & NGOs. The MSY has been revised in the year 2013-14 by increasing the training cost, cost of raw material & stipend for trainees. The implementing agencies are being pursued to take up implementation of the MSY scheme. The State-wise detail of sanction accorded by NMDFC is as follows:

                                                                                                                                                                       Amt in Rs.