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

SHGs may avail either Term Loan (TL) or Cash Credit Limit (CCL) or both based on their requirement.

The loans may be used by members for meeting social needs, high-cost debt swapping, construction or repair of house, construction of toilets, taking up sustainable livelihoods, or to finance any viable common activity started by the SHGs

Quantum of Loan

In case of Cash Credit:

In case of Cash credit Limit, a minimum loan of Rs.6 lakhs to each eligible SHG for a period of 3 years with a yearly Drawing Power (DP). The DP may be enhanced annually based on the repayment performance. The DP may be calculated as follows.

1st year DP: 6 times of the existing corpus or minimum of Rs.1,50,000/- whichever is higher

2nd year DP: 8 times of corpus at the time of review/ enhancement or minimum of Rs.3,00,000/-, whichever is higher

3rd Year DP: Minimum of Rs.6,00,000/-, based on the Micro Credit Plan prepared by Federation/ Support agency and the previous Credit History

DP for 4th Year onwards: Above Rs.6,00,000/- based on the Micro Credit Plan prepared by SHG and appraised by the Federation/ Support agency and the previous Credit History.

In case of Term loan: 

1st dose: 6 times of the existing corpus or minimum of Rs.1,50,000/- whichever is higher

2nd dose: 8 times of corpus or minimum of Rs.3,00,000/-, whichever is higher

3rd dose: Minimum of Rs.6,00,000/-, based on the Micro Credit Plan prepared by Federation/ Support agency and the previous Credit History.

4th dose onwards: Above Rs.6,00,000/- based on the Micro Credit Plan prepared by SHG and appraised by the Federation/ Support agency and the previous Credit History.

Maximum loan amount under the scheme is Rs.20 Lakhs.

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.

Unique code allotted for SHG in NRLM database should be available.

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

24 to 36 instalments - monthly/ quarterly for first dose.

36 to 48 instalments for second dose,

48 to 60 instalments for third dose and 60 to 84 instalments from fourth dose onwards.

Rate of Interest

Up to Rs.3.00 Lakhs - 7%

Above Rs. 3.00 lakhs up to Rs. 5.00 Lakhs - 1Y MCLR (8.85% at present)

Working capital:

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

Term loan:

Above Rs. 5.00 Lakhs - 1Y MCLR (8.85% at present) + 2.30% (spread) = 11.15% at present.

Processing Charges

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