Kerala State Minorities Development Finance Corporation (KSMDFC)

The Kerala State Minorities Development Finance Corporation (KSMDFC) was Incorporated on 14th February 2013 & Registered as a Non-profit Govt Company as on 22nd March 2013.  with the main objective of promoting economic activities amongst the backward sections of notified minorities. Such as Muslims, Christians, Sikhs, Buddhists, Parsis. To achieve its objective, KSMDFC is providing concessional finance for self-employment activities to Eligible beneficiaries belonging to the minority communities. At present the families having annual income up to rupees 81000 in rural areas and rupees 103000 in urban areas are eligible under the KSMDFC schemes.  
The Authorized share capital of KSMDFC is rupees 100 cores.

Note: Many of schemes mentioned below are common/extensions of central government schemes.

(The Scheme is for individual beneficiaries and is implemented through the SCAs)
Under the Term Loan Scheme, projects costing upto Rs. 5 lacs are considered. KSMDFC provides loan to the extent of 85% of the project cost subject to a maximum of Rs. 4,25,000/-. The remaining cost of the project is met by the SCA and the beneficiary, however, the beneficiary has to contribute minimum 5% of the project cost. Rate of Interest charged from the beneficiaries is 6% p.a. on reducing balance.
Assistance under Term Loan Scheme is available for any commercially viable and technically feasible venture which for the sake of convenience has been into the following sectors:
1. Agriculture & Allied
2. Technical Trade
3. Small Business
4. Artisans & Traditional Occupation
5. Transport & Service Sector
An illustrative list of self employment projects grouped under the above referred sectors is given under the head “Illustrative List of Schemes”. The list is illustrative and not exhaustive.
(The Scheme is for individual beneficiaries and is implemented through the SCAs)
Margin Money assistance is provided to beneficiaries availing bank finance. Generally Public Sector Banks finance upto 60% of the project cost and seek 40% from the beneficiaries. Under Margin Money Loan Scheme, NMDFC provides loan to the eligible beneficiaries to meet the requirement of margin asked by the bankers. For this purpose, loan upto 25% of the project cost subject to a maximum of 1.25 lacs per unit is available. The SCA and the beneficiary are expected to contribute the remaining amount. Rate of Interest charged from the beneficiaries is 3% p.a. on reducing balance.
(The Scheme is for individual beneficiaries and is implemented through the SCAs)
NMDFC has introduced the scheme of Educational Loans with the objectives to facilitate job-oriented education amongst the weaker sections of Minorities. The scheme envisages maximum loan of Rs. 2.5 lacs i.e., Rs. 50,000/- every year for pursuing professional and technical courses of duration not exceeding 5 years. Funds for this purpose are made available to the SCAs at interest of 1% for lending to the beneficiaries at 3%. The loan is repayable maximum in 5 years after the completion of the course.
(The Scheme is for the members of the Self Help Groups and is implemented through the SCAs as well as NGOs)
NMDFC launched the scheme of Micro Financing in 1998 on the pattern of Grameen Bank of Bangladesh and Rashtriya Mahila Kosh under the Department of Women and Child Development in our own country. The scheme envisages micro credit to poorest among poor through selected NGOs of proven bonafide and their network of Self Help Groups. It is an informal loan scheme which ensures quick delivery of loan at the door steps of the beneficiaries with constant follow up. It also envisages a pre-requisite that the beneficiaries are first organized into Self Help Groups and get into the habit of effecting regular savings, however small. Under the scheme, loan upto a maximum of Rs. 25,000/- per beneficiary can be provided. The funds are made available to the NGOs at 1% interest p.a. who further lend to the SHGs at 5% interest p.a. The repayment period is maximum of 36 months.
(The Scheme is directly implemented by the NMDFC through the NGOs)
Financial assistance in the form of Interest Free Loan is provided to the NGOs for promotion of Self Help Groups (SHGs). The maximum amount of loan available is Rs. 2.15 lakhs for promotion of 50 SHGs of about 1000 members. The loan is repayable after one year and is adjusted by way of grant at the rate of 25% of the loan advanced by the SHGs and 5% on their growth of savings (provided the growth in savings is alteast 10% over the last year).
(The Scheme is implemented through NGOs as well as SCAs)
Under Mahila Smaridhi Yojna, training is given to a group of around 20 women in any suitable craft activity. The group is formed into Self Help Group during the training itself and after the training, micro-credit is provided to the members of the SHGs formed. The maximum duration of the training is of 6 months with maximum training expenses of Rs. 500/- p.m. per trainee. During the training, a stipend of Rs. 250/- p.m. is also paid to the trainees. The training cost and stipend is met by NMDFC as grant. After the training, need based micro-credit (subject to maximum of Rs. 25,000/-) is made available to each member of the self help group so formed at interest rate of 4%.
(The Scheme is for individual beneficiaries and is implemented only through the SCAs)
NMDFC has introduced a scheme of vocational training for persons belonging to the Minority communities to develop their skills and knowledge with a view to make them competent for wage employment or self employment. Under this scheme, SCAs organize need based vocational training programmes in their States with the help of local recognized training institutions. Such programmes aregenerally of duration around six months. 85% of the cost of the training is met by NMDFC as grant while remaining 15% of the cost is borne by the SCA. The SCAs are required to pose their proposal to NMDFC on prescribed format for approval and sanction of funds.
(The Scheme is for individual craft persons as well as Self Help Groups and is implemented through both SCAs as well as NGOs)
With a view to support the craft persons in market promotion and sale of their products at remunerative price,NMDFC welcomes proposals from SCAs as well as NGOs for organizing exhibition at selected locations. In these exhibitions, handloom / handicraft precuts of Minority craft persons are exhibited and sold. Such exhibitions also serve the purpose of “Buyer Seller Meet” which is considered very useful for product development and market promotion for domestic consumption as well as exports. NMDFC provides grant for organizing exhibitions after due appraisal of the proposals.
(The Scheme is for the members of the Self Help Groups and is implemented through the SCAs as well as NGOs)
In this fast changing world, the people’s perception, likings and tastes are changing rapidly. Therefore, the handloom and handicraft items made by craft persons have to be latest in terms of design and aesthetics and competitive in terms of cost. Craft persons may require exposure to new designs and training to upgrade their skills to meet this challenge. NMDFC welcomes proposal from SCAs as well as NGOs for organizing design development / skill development training programme for the craft persons of Minority communities. After due appraisal, depending upon the merit of the proposals, NMDFC provides grant for organizing such programmes.
Term Loan
Scheme Details
It is the main activity of NMDFC, which is undertaken through the SCAs.Loans to individual beneficiaries are provided for projects with a maximum unit cost of Rs.5.0 Lakhs. The pattern of funding envisages 85% NMDFC share and the SCA and beneficiary contribute the remaining 15% with minimum 5% share from the beneficiary. NMDFC provides loans to the SCA at 3% rate ofinterest and in turn the SCA charge 6% interest per annum from the beneficiary.
Scheme Guidelines
The steps for provision of term loan like collecting applications from the perspective beneficiaries , short-listing the applications through desk scrutiny and physical verification, interviewing the short-listed applicants the Selection Committee( as per the existing procedure), ion of beneficiaries,sanction of loan and disbursement of loan taken up through the campaign approach.
Targets Set:
For 2011-12 —– Financial = Rs. 220 crores, Physical= 78000 beneficiaries
Micro Financing
Scheme Details
NMDFC took the lead to start a parallel channel of micro financing w.e.f.1/4/1998.This initiative was taken in order to reach the poorest among the target group,especially the minority women scattered in remote villages and urban slums who are not able to take advantage of the formal banking credit as well as NMDFC programme through its SCA. Under this scheme small loans up to a maximum of Rs. 25,000 per beneficiary are provided through the network of NGOs and SHGs.Funds are given to the NGOs at an interest rate of 1%, which further do the lending to the beneficiaries directly or through the SHGs at an interest rate of 5%.
Scheme Guidelines
The eligibility conditions for the Minority members, Self Help groups,NGOs,loan amount,interest rate etc. would be as per the scheme of Micro financing of NMDFC.
Targets Set:
For 2011-12 —– Financial = Rs. 220 crores, Physical= 78000 beneficiaries



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