Objective

Credit facilities can be provided for Income Generation Activities, Social Needs like Housing, Education etc., and for Debt swapping.

Nature and
Purpose of
Advance

Cash Credit based on the requirement.

Loan amount would be distributed among members based on the micro credit plan prepared by the SHGs.

Quantum of Loan

1st Linkage: 6 times of the existing savings/ corpus or minimum of Rs.1,00,000/- whichever is higher, subject to a maximum of Rs.4,00,000/-.

2nd Linkage: 8 times of savings/ corpus at the time of review/ enhancement or minimum of Rs.2,00,000/-, whichever is higher subject to a maximum of Rs.8,00,000/-

3rd Linkage: 10 times of savings/ corpus or minimum of Rs.6,00,000/-, whichever is higher, subject to a maximum of Rs.16,00,000/-

4th Linkage onwards: 10 times of savings/ corpus or above Rs.6,00,000/- subject to a maximum of Rs.20,00,000/-

In all the cases the per member limit shall not exceed Rs.1,00,000/- in a group if the loan availed is utilized for internal lending/ meeting the social needs.

If the group undertakes any economic activity as per Micro Credit plan, there is no restriction in the per member limit of Rs.1,00,000/-

Eligibility

The SHG should be in active existence at least 6 months as per the books of account of SHG and not from the date of opening of SB account.

The date of resolution on formation of SHG should be considered as date of formation of SHG.

SB account should be opened with the bank within two months of the formation of the SHG.

SHGs should be practicing panchasutras i.e., Regular meetings, Regular savings, regular inter-loaning, and timely repayment and up-to date books of accounts.

Security

For loans to SHGs up to Rs.10.00 lakhs, no collateral and no margin will be charged. No lien should be marked against Savings Bank account of SHGs and no deposits should be insisted upon while sanctioning of loans

For loans above Rs.10.00 lakhs and up to Rs.20.00 lakhs, no collateral to be obtained and no lien should be marked against Savings Bank account of SHGs as the loan will be covered under CGFMU and margin not exceeding 10% of the loan amount may be obtained.

Repayment

Monthly repayment subject to annual renewal.

Rate of Interest

Up to Rs. 3.00 Lakhs - 1Y MCLR (8.85% at present) + 1.15% (spread) = 10.00% at present.

Above Rs. 3.00 Lakhs to Rs. 5.00 Lakhs - 1Y MCLR (8.85% at present) + 1.50% (spread) = 10.35% at present.

Above Rs. 5.00 Lakhs - 1Y MCLR (8.85% at present) + 1.80% (spread) = 10.65% at present.

Processing charges

Up to Rs. 50,000/- - Nil (Per member limit up to Rs. 25000/- Nil)

Above Rs. 50,000/- - 0.25%

*Conditions apply

*For more details, please contact our nearest branch

*Click here to apply - Indian Overseas Bank (iob.in)