Target Group

Individual and Joint Liability Groups (JLGs) belonging to Vulnerable Occupational Groups (VOGs) will be facilitated with subsidized bank credit. The 6 VOGs are as under:

1. Transport workers 2. Domestic workers 3. Gig workers 4. Waste workers 5. Construction workers 6. Care workers.

Purpose

Need based collateral free Term Loan (TL)/Cash Credit (CC) loan/Composite Loan/Working Capital Demand Loan to eligible borrowers for working capital/marketing related requirements.

Eligibility

1. The Minimum age of the beneficiaries should be 18 years and maximum 60 years on the date of registration.

2. The beneficiary should be engaged in the mentioned six VOGs viz. transport workers, domestic workers, gig workers, waste workers, construction workers and care workers.

3. The beneficiary should not be defaulter to any bank or financial institutions. (Based on CIC report).

4. The beneficiary should not have availed the loans under similar credit-based schemes of Central/State Government for setting up their own enterprise, viz. PM Vishwakarma, MUDRA, etc. However, the beneficiaries of PM Vishwakarma and MUDRA who have fully repaid their loan, will be eligible.

Type of Facility

Collateral free Term Loan (TL)/Cash Credit (CC) loan/Composite Loan/Working Capital Demand Loan

Identification of VOG members

The ULB will conduct socio-economic profiling of urban poor households to identify individuals engaged in vulnerable occupations. Subsequently, each individual VOG member and their family will receive a unique identification number. The unique identification number will also act as an identifier for lending institutions to facilitate recognition and ease of lending.

Quantum of Finance

The loan amount for an individual will range from INR 50,000 to INR 4,00,000, depending on the category of VOGs they belong to. Joint Liability Groups (JLGs) will be eligible for credit support of up to INR  20 lakh, which will be extended strictly through the group mechanism.

Margin Norms

For loans up to INR 50,000: NIL

For loan amount above INR 50,000: Margin/promoter's contribution should be 10% of the project cost, both for individual and JLG loans.

Repayment

3-7 years after initial moratorium period of 3-6 months as per requirement for all types of loans.

Loan Amount of up to INR  50,000: up to 3 years after initial moratorium period of 3-6 months.

Loan Amount above INR  50,000: up to 7 years after initial moratorium period of 3-6 months.

Sanctioning authority has the discretion to determine the repayment period based on the quantum of loan, nature of the project, projected cash flows, and technical viability as outlined in the Detailed Project Report (DPR).

No prepayment penalty will be charged from the beneficiaries for repayment before the scheduled date.

Security

Prime: Charge on assets created out of bank finance.

Collateral: Nil

Interest subvention

Beneficiaries availing loans under the scheme will be eligible for interest subvention. The interest subvention by Government of India will be payable over and above 5% rate of interest for male beneficiaries and 4% for female/transgender/PWD beneficiaries subject to the upper cap of 8% and 9% on interest subvention for male and female/ transgender/PWD respectively. Further, for mixed groups under JLGs, interest subvention eligibility will be determined by the gender with the highest representation. In case of equal proportion, the interest subvention by Government of India will be payable over and above 5% rate of interest

Interest Rate

Male Borrowers: RLLR plus 4.65%

Female/transgender/PWD borrowers: RLLR plus 3.65%