What is Agriculture Infrastructure Fund?

It is a loan given to SHGs in the form of Term Loan (TL) or a Cash Credit Limit (CCL) for taking up sustainable livelihood activity and improving the quality of life through a micro credit plan developed by its members.

Are SHGs government or private?

SHGs are small homogeneous groups of people having a desire to collectively perform activities. These groups can be formal (registered) or informal (unregistered).

When can SHG open bank account?

Self Help Groups can open saving bank account immediately after the formation of the group or by applying on the website.

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Financing Under Self Help Groups (SHGs)

Q: What is the limit of SHG loan?

For SHG Loans under DAY NRLM Scheme Loan Limit for Cash Credit: Minimum loan: Rs. 6 lakhs to each eligible SHGs for a period of 3 years with a yearly drawing power (DP). Maximum loan: No upper ceiling limit The drawing power changes after a couple of years, read on to know

Benefits
Features
Eligibility Criteria
Document Required
Fees & Charges
Most Important Terms and Conditions (MITC)

Financing Under Self Help Groups (SHGs) : Benefits

Collateral free advances up to Rs. 20.00 lakhs to SHGs #
Nil Margin for advances up to Rs. 10.00 lakhs to SHGs
No loan processing fee/ Documentation Charges/Inspection charges for loans up to Rs. 6 Lakhs.
Concessional Rate of Interest for all women SHGs under DAY-NRLM
# For loans to SHGs above Rs 10.00 Lakhs and upto Rs 20.00 Lakhs under DAY NRLM Scheme, collateral free loans are available under Credit Guarantee Fund for Micro Units (CGFMU).

Financing Under Self Help Groups (SHGs) : Features

Purpose of Loan

Small loans for small periods for needy people.
To raise/manage resources for benefit of group members.
The purpose of the loan should be left to the common wisdom of the group. It is advisable that the group prepares a credit plan for its members and aggregate of that may be submitted to the Bank. The group will discuss and decide about the purpose for which the loan amount is disbursed among its individual members.
Loan may be granted by the SHG for various purposes like emergency needs, livelihood development, high cost debt swapping, acquisition of asset and taking up various income generating Agricultural, Agri-allied and other Non-Agriculture activities.

Financing Under Self Help Groups (SHGs) : Eligibility Criteria

SHG should be in active existence for the last 6 months as per their books of account and not from the date of opening of their S/B account
SHG should be practicing ‘Panchasutras’ i.e. Regular meetings, Regular savings, Regular inter-loaning, Timely repayment and Up-to-date books of accounts
SHG should qualify as per grading norms fixed by NABARD.
The defunct SHGs are also eligible for credit if they are revived and continue to be active for a minimum period of 3 months.
The SHG should not be having any existing loan from other financial institutions and the members should be involved in livelihood promotion activities.

Financing Under Self Help Groups (SHGs) : Document Required

Application Form along with KYC documents of office bearers of the SHG
Resolution of the SHG for availing Bank Loan and authority to office bearers to open and operate the account
Letter of Sponsorship from the Sponsoring agency

Financing Under Self Help Groups (SHGs) : Fees & Charges

Unified Processing Charges (i.e Processing, Inspection, Documentation, Ledger Folio charges etc.) for agriculture segment

Loan Limit	Amount of Charges
Upto Rs 6 Lakhs	-NIL
Above Rs 6 lakh and upto Rs 10 Lakhs	Rs 250/- per lakh or part thereof.
Above Rs 10 lakh	Rs 350/- per lakh or part thereof

Financing Under Self Help Groups (SHGs) : Most Important Terms and Conditions (MITC)

Financing to SHG

Financing under SHG under DAY-NRLM Scheme

Quantum of Loan

Corpus fund of SHG form the basis to determine the quantum of loan which can be financed to the SHG.
SHG may be sanctioned saving linked loan by Banks (varying from a corpus to loan ratio of 1:1 to 1:4 )

Minimum loan of Rs. 6 Lakhs to each eligible SHGs for a period of 3 years with a yearly drawing power (DP).
Maximum Loan: No upper ceiling Limit

DP for 1st Year: 6 times of the existing corpus or minimum of Rs 1.50 lakh, whichever is higher.
DP for 2nd Year: 8 times of the corpus at the time of review/enhancement or minimum of Rs 3 lakh, whichever is higher.
DP for 3rd Year: Minimum of Rs 6 lakh based on the Micro Credit Plan (MCP) prepared by SHG and appraised by the federations/support agency and the previous credit history.
DP for 4th Year onwards: Above Rs 6 lakh, based on the MCP prepared by SHG and appraised by the federations/ support agency and the previous credit history.

In case of Term Loan:

First dose: 6 times of the existing corpus or minimum of ₹1.5 lakh, whichever is higher
Second dose: 8 times of the existing corpus or minimum of ₹3 lakh, whichever is higher
Third dose: Minimum of ₹6 lakh, based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history.
Fourth dose onwards: Above ₹6 lakh, based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history

Nature of Facility

Cash Credit and Term/ Demand Loan and Over Draft (TL/DL, CC & OD)

Repayment Period

For Cash Credit or Over Draft: 12 months subject to annual review For Demand/ Term Loans: As per credit plan and term of sanction which may vary from 24 to 84 months or as per the norms of respective scheme/ project

Security

Collateral free advances up to Rs 10.00 Lakhs to SHGs

Collateral free loans to SHGs upto Rs 20.00 Lakhs under DAY NRLM Scheme.
For loans to SHGs above Rs 10.00 Lakhs and upto Rs 20.00 Lakhs under DAY NRLM Scheme, collateral free loans are available under Credit Guarantee Fund for Micro Units (CGFMU).

Margin

No Margin should be stipulated for advances up to Rs. 10.00 lakhs to SHGs

Rate of Interest

Finance to SHGs	Applicable Rate of Interest
Loan up to Rs.3 Lakhs	One Year MCLR+ SP+1.00%
Loan above Rs.3 Lakhs	One Year MCLR+ SP+1.50%

Finance to SHGs	Applicable Rate of Interest
Loan up to Rs.3 Lakhs	7%
Loan above Rs.3 Lakhs and Upto Rs.5 Lakhs	One year MCLR
Loan above Rs.5 Lakhs	One Year MCLR+ SP+1.50%

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What is Agriculture Infrastructure Fund?

It is a loan given to SHGs in the form of Term Loan (TL) or a Cash Credit Limit (CCL) for taking up sustainable livelihood activity and improving the quality of life through a micro credit plan developed by its members.
What is the limit of SHG loan?
For SHG Loans under DAY NRLM Scheme

Loan Limit for Cash Credit:

Minimum loan: Rs. 6 lakhs to each eligible SHGs for a period of 3 years with a yearly drawing power (DP).

Maximum loan: No upper ceiling limit

The drawing power changes after a couple of years, read on to know more:

DP for 1st year: 6 times of the existing corpus or minimum of Rs 1.50 lakh, whichever is higher.

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

DP for 3rd year: Minimum of Rs. 6 lakhs based on the Micro Credit Plan (MCP) prepared by SHG and appraised by the federations/support agency and the previous credit history.

DP for 4th Year onwards: Above Rs 6 lakh, based on the MCP prepared by SHG and appraised by the federations/ support agency and the previous credit history.

Loan Limit for Term Loan:

First dose: 6 times of the existing corpus or minimum of Rs.1.5 lakh, whichever is higher.

Second dose: 8 times of the existing corpus or minimum of Rs. 3 lakhs, whichever is higher.

Third dose: Minimum of Rs. 6 lakhs, based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history.

Fourth dose onwards: Above Rs. 6 lakhs, based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history.

For SHG Loans other than DAY NRLM Scheme:

SHG may be sanctioned saving linked loans by banks (varying from a corpus to loan ratio of 1:1 to 1:4)
Are SHGs government or private?

SHGs are small homogeneous groups of people having a desire to collectively perform activities. These groups can be formal (registered) or informal (unregistered).
When can SHG open bank account?

Self Help Groups can open saving bank account immediately after the formation of the group or by applying on the website.