Composite Loan Scheme (Delhi)

What is the Delhi Composite Loan Scheme?

The Composite Loan Scheme, abbreviated CLS, is a self-employment credit scheme of the Delhi SC/ST/OBC/Minorities & Handicapped Finance & Development Corporation (DSFDC), a fully owned undertaking of the Government of NCT of Delhi.

According to the DSFDC scheme document, under the Composite Loan Scheme the corporation provides a need-based loan to prospective beneficiaries for pursuing income-generating activities. It is the corporation's entry-level product: smaller than Dilli Swarojgar Yojana, with a tighter income ceiling, a free application form, and a lower processing fee, and, unlike Dilli Swarojgar Yojana, it expressly includes persons with disabilities among its target groups.

DSFDC was incorporated on 29 January 1983 under the Companies Act, 1956 with an authorised share capital of Rs 100 crore, and works as the State Channelising Agency in Delhi for the national apex corporations NSFDC, NSTFDC, NSKFDC, NMDFC, NBCFDC and NHFDC. Its head office is at Ambedkar Bhawan, Rohini, and it operates through three branch offices that between them cover Delhi's 11 revenue districts.

The numbers that define the scheme

• Maximum loan for the Scheduled Caste category: Rs 3,00,000.
• Maximum loan for OBC, minority and PWD categories: Rs 1,00,000.
• Annual family income ceiling: Rs 1.20 lakh.
• Age band: 18 to 50 years.
• Processing fee: Rs 350 by demand draft. Form: free.
• Repayment: DSFDC's standard terms specify 45 plus 5 post-dated cheques for CLS cases.

Who is eligible for the Composite Loan Scheme, and who is not?

Target groups. DSFDC lists five target groups for the Composite Loan Scheme: Scheduled Caste, Scheduled Tribe, Other Backward Classes, Minorities, and Persons with Disabilities.

You can apply if:

• You are a resident of Delhi.
• Your age is between 18 and 50 years.
• Your annual family income from all sources does not exceed Rs 1.20 lakh.
• You have a proper work place for starting the proposed activity, either owned or rented.
• You have not been declared a defaulter under any scheme implemented by DSFDC.
• For the PWD category, you hold a government hospital certificate showing at least 40 percent disability.

You cannot apply, or are not eligible, if:

• You do not belong to SC, ST, OBC, a notified minority community, or the persons-with-disabilities category. General-category applicants are outside the scheme.
• Your annual family income exceeds Rs 1.20 lakh. If your household income is between Rs 1.20 lakh and Rs 2 lakh, look at Dilli Swarojgar Yojana instead, which uses the higher ceiling.
• You are under 18 or over 50 years old.
• You have no identified work place for the activity.
• You have been declared a defaulter under any DSFDC scheme, or you have an outstanding loan from a financial institution or government organisation, the non-availing affidavit is a compulsory document.
• Your proposed activity is not on the approved list and has not been cleared by the Principal Secretary (SC/ST/OBC/Minority).

What can the Composite Loan Scheme finance?

DSFDC lists 26 income-generating activities under the Composite Loan Scheme:

1. Vegetable, fruit or flowers' shop
2. Bakery or confectionery items
3. Kiryana or general store
4. Dairy products
5. Stationery, books, gifts or book binding
6. Photostat, fax, STD or PCO
7. Cyber cafe or cell phone booth
8. LPG booking office or showroom without LPG cylinders
9. Atta chakki
10. Meat, poultry and fish shop
11. Pan shop
12. Barber shop, hairdressing saloon or beauty parlour
13. Laundry, dry cleaner or ironing
14. Sweet shop or tea stall without sitting arrangements
15. Chemist shop
16. Tailoring shop
17. Optical shop
18. Electrical or electronic repair shop
19. Photo studio
20. Cable TV or DTH operations
21. Hosiery, readymade garments or cloth shop
22. ATM
23. Ration shop under the Public Distribution System of NCT of Delhi, or cycle repair shop
24. Any non-polluting permissible manufacturing activity in industrial, commercial or mixed land-use residential areas defined under the Master Plan
25. Purchase of three-wheelers or taxis
26. Any other activity found suitable and approved by the Principal Secretary (SC/ST/OBC/Minority)

The list is identical to the one used for Dilli Swarojgar Yojana, so the choice between the two schemes is driven by your income, your category and the size of the loan you need, not by the trade.

What documents are required?

DSFDC's Composite Loan Scheme document lists the following:

• Duly filled loan application form: free of cost; from any branch office or the Rohini head office, or downloaded from the website.
• Aadhaar card as proof of identity and residence.
• Caste certificate issued by the Government of Delhi, or an affidavit for a minority applicant, or a government hospital PWD certificate showing minimum 40 percent disability.
• Age proof: birth certificate, school-leaving certificate or affidavit.
• Income certificate in the form of an affidavit.
• Affidavit about non-availing of a loan from any financial institution or government organisation.
• Estimate of the items or machines to be procured for the proposed activity.
• Ownership proof of the work place; electricity bill, water bill, MTNL telephone bill or another property document.
• Rent agreement and the owner's ID proof if the work place is rented; an affidavit of no objection if the work place is owned by a blood relative.
• Affidavit of personal guarantee.
• ECS mandate with 5 blank CTS post-dated cheques in favour of DSFDC and one blank cancelled cheque for RTGS.
• Five blank post-dated cheques of the guarantor if the loan is above Rs 2 lakh.
• Affidavit of the legal heir of the applicant, and the legal heir's ID proof with a passport-size photo.
• Copy of the insurance receipt under Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana.
• Two witnesses with their ID proof, present in person.
• Group photograph showing the applicant, the guarantor, the two witnesses, the branch in-charge and the dealing assistant.
• Demand draft of Rs 350 in favour of DSFDC towards the processing fee.

Guarantor's documents: original pay slip, copy of the office identity card, Aadhaar as residence proof, affidavit and undertaking in the prescribed format, date-of-birth proof, and five passport-size photographs. For loans above Rs 2 lakh, five blank cheques from the guarantor: or, in place of a guarantor, the original property document with an NOC from the owner and the complete chain of documents, or original NSC, KVP or FDR with a letter of lien in favour of DSFDC.

The small-loan concession. For a loan of up to Rs 50,000, no guarantor or collateral security is required, though DSFDC says this remains discretionary. In that case the applicant must produce the names of two reference persons — prominent persons who are permanent residents of Delhi and live in the applicant's own area.

How to apply for the Composite Loan Scheme

1. Check the three hard limits before anything else, category, age 18 to 50, and annual family income up to Rs 1.20 lakh. If your income is above Rs 1.20 lakh, apply under Dilli Swarojgar Yojana instead of wasting a cycle here.
2. Collect the free application form from the DSFDC head office, Ambedkar Bhawan, Institutional Area, Sector-16, Rohini, Delhi-110085, or from the Rajpur Road, Mangolpuri or Nand Nagri branch office, or download it from the corporation's website.
3. Assemble the category proof. A caste certificate must be one issued by the Government of Delhi. Minority applicants file the prescribed affidavit. PWD applicants need the 40 percent government hospital certificate.
4. Sort out the work place. Get the electricity, water or MTNL bill in the owner's name, plus the rent agreement and the owner's ID if rented, or the no-objection affidavit if the premises belong to a blood relative.
5. Prepare a costing of the equipment you intend to buy. For CLS cases DSFDC asks for details of the proposed project rather than the full five-year project report used for Dilli Swarojgar Yojana.
6. Decide your security route. Under Rs 50,000, two local reference names may be enough. Above that, arrange a serving government or PSU guarantor, or property, NSC, KVP or FDR as collateral.
7. Buy a demand draft of Rs 350 in favour of DSFDC and take the PMSBY and PMJJBY insurance receipts.
8. Submit the file at the branch office covering your district and keep the acknowledgement. Central Zone, 2-Battery Lane, Rajpur Road, covers Central, North, New Delhi, South and South-East. The Mangolpuri branch at Ambedkar Bhawan, Rohini covers West, North-West and South-West. The Nand Nagri branch at A-Block, Bunkar Vihar, opposite Gagan Cinema covers East, North-East and Shahdara.
9. Complete the post-sanction steps in person. Sign the loan agreement, execute the hypothecation deed, hand over the ECS mandate and the post-dated cheques, bring the guarantor and the two witnesses, and sit for the group photograph DSFDC keeps on file.

How do you check the status of your application?

The Composite Loan Scheme is processed manually at branch level, so there is no online status tracker.

• Ask the branch that holds your file, quoting the acknowledgement number and date. Central Zone: 011-23979068, 011-23925477. Mangolpuri: 011-23925477, 011-27574321. Nand Nagri: 011-22137953, 011-22130159.
• Head office, Ambedkar Bhawan, Rohini: 011-27574377, 011-27574321, email dsfdcdelhi@gmail.com.
• Entrepreneur Guidance Cell. DSFDC's citizen's charter records that each branch runs an Entrepreneur Guidance Cell from 10.00 a.m. to 3.00 p.m. to explain scheme details. It is the best place to have a half-complete file checked before you submit it.

Why applications get rejected, and how to fix them

• Income above Rs 1.20 lakh. The most frequent single reason. The ceiling covers the whole family's income from all sources. Applicants just above it should move to Dilli Swarojgar Yojana rather than understate income in an affidavit. A false affidavit is a criminal exposure, not a shortcut.
• Wrong ceiling assumed. OBC, minority and PWD applicants often apply for Rs 3,00,000. That figure applies only to the SC category; the ceiling for the other three categories is Rs 1,00,000.
• Caste certificate from outside Delhi. DSFDC requires the certificate to be issued by the Government of Delhi.
• Disability certificate below 40 percent or issued by a private hospital. The scheme document requires a government hospital certificate at 40 percent or above.
• Guarantor problems on loans above Rs 50,000. Either produce a serving government or PSU employee, or switch to collateral, property with complete chain documents, or NSC, KVP or FDR with a lien letter.
• Work-place file incomplete. The bill in the owner's name, the rent agreement, the owner's ID and, for a relative's premises, the NOC affidavit are four separate items.
• Rs 500 draft instead of Rs 350. The Rs 500 fee belongs to Dilli Swarojgar Yojana; the Composite Loan Scheme fee is Rs 350.
• Cheques from a non-nationalised bank. DSFDC's standard terms require the post-dated cheques to be drawn on a nationalised bank.

What are the key dates and the current position?

The Composite Loan Scheme has no application window and no last date. DSFDC takes applications through the year at its head office and three branch offices and processes them as they arrive.

The scheme document does not publish a rate of interest for the Composite Loan Scheme, and this guide does not quote one. DSFDC's lending rates follow the terms on which the national apex corporations refinance it, and the rate applicable to your case will be stated in your sanction letter. Ask the branch for the current rate in writing before you commit.

On repayment, DSFDC's standard terms and conditions require 45 plus 5 post-dated cheques from a nationalised bank for Composite Loan Scheme cases, against 60 plus 5 for its other schemes, so a CLS loan is scheduled over a shorter run than a Dilli Swarojgar Yojana loan of the same size.

How do you raise a grievance?

Take the complaint in writing to the branch office holding your file, with the acknowledgement receipt. If it does not move, escalate to the Managing Director, DSFDC, Ambedkar Bhawan, Institutional Area, Sector-16, Rohini, Delhi-110085, telephone 011-27574377 or 011-27574321, email dsfdcdelhi@gmail.com, quoting the branch, the application number and the submission date.

If the corporation does not respond, use the Government of NCT of Delhi's public grievance system, and file an RTI application with the Public Information Officer of DSFDC to obtain the noting on your file. DSFDC's website carries an RTI section and an RTI Manual-17 page for this.

Two things are worth remembering as protection against touts. The Composite Loan Scheme form is free, DSFDC's citizen's charter says forms are issued free of cost at all three branch offices and the head office, and the only payment is the Rs 350 processing-fee demand draft made out to DSFDC. Any cash demand beyond that is not a government charge.