Financing growth & transforming rural India.
Bank of Baroda, for rural India, with rural India.
Financing Under Self Help Groups (SHGs)
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Benefits
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Features
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Eligibility Criteria
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Document Required
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Fees & Charges
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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 |
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| 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 | |||||||||||||||
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| 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
In case of Term Loan:
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| 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). |
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| Margin | No Margin should be stipulated for advances up to Rs. 10.00 lakhs to SHGs | |||||||||||||||
| Rate of Interest |
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