Small Scale Lending Scheme (Microfinance)

What is the Small Scale Lending Scheme (Microfinance)?

Small Scale Lending Scheme (Microfinance) is a credit programme run by the Gujarat Gopalak Vikas Nigam, the Gujarat Gopalak Development Corporation, which works under the Social Justice and Empowerment Department of the Government of Gujarat. The corporation was set up to support the Rabari and Bharwad communities, pastoral groups whose traditional livelihood is livestock rearing and the dairy trade, and its stated purpose on the Social Justice Department site is to help these communities advance socially and economically in line with other communities.

The scheme provides microcredit of up to Rs 1,25,000 to a single applicant from the target group so that a small self-employment unit can be started or expanded. In practice most sanctioned units are livestock units, the purchase of buffaloes or cows, a small milk collection point, a chilling or processing activity, but the corporation accepts other small trades that the applicant can justify in a project report.

The scheme is deliberately small-ticket. It sits below the corporation's larger term-loan products and is meant for the household that needs working capital or one or two animals rather than a full commercial dairy. Because the ticket size is small, the paperwork is lighter than a bank loan, but the eligibility filters, community, age, income and own contribution: are applied strictly.

Key features

• Maximum loan of Rs 1,25,000 per applicant.
• Restricted to the Rabari and Bharwad (Gopalak) communities of Gujarat.
• Age band of 21 to 45 years, applied strictly at the upper end.
• Family income ceiling of Rs 3,00,000 a year.
• 5 per cent of the project cost must come from the applicant.
• One loan per applicant; repeat sanctions are not allowed.

Who is eligible for the Small Scale Lending Scheme?

You can apply if:

• You are a permanent resident of Gujarat.
• You belong to the Rabari or Bharwad community and hold a caste certificate from a competent authority such as the Mamlatdar.
• You are between 21 and 45 years of age on the date of application.
• Your annual family income does not exceed Rs 3,00,000, evidenced by a current income certificate.
• You can contribute 5 per cent of the project cost from your own funds.
• You have a bank account in your own name for disbursement and repayment.

You cannot apply if:

• You are below 21 or above 45, the upper age limit is not relaxed.
• You do not belong to the Rabari or Bharwad community. Other backward class, Scheduled Caste and unreserved applicants must approach the corporation that covers their category, such as the Gujarat Backward Class Development Corporation or the Gujarat Unreserved Education and Economical Development Corporation.
• Your family income is above Rs 3,00,000 a year.
• You have already taken a loan under this scheme. Only one loan per applicant is sanctioned.
• You are a defaulter on an existing loan from the corporation or from another state finance corporation, or you fail to declare an outstanding loan.
• You are applying jointly with another person. The corporation sanctions on an individual basis.
• You are not a resident of Gujarat.

A note on caste certificates: the corporation accepts an older certificate if it was issued by a competent authority and is properly authenticated, but a recent certificate causes the fewest problems at scrutiny. If your certificate is more than a few years old, get it re-issued before you apply rather than after a query is raised.

What documents are required?

How to apply for the Small Scale Lending Scheme

1. Collect your caste certificate, income certificate and age proof first. These three are the documents most often missing when an application is returned, and each takes time to obtain from the Mamlatdar's office.
2. Write a project report. State what you will buy — for example two buffaloes and a chaff cutter. The cost of each item, where you will buy it, how much milk or income you expect per month, and how you will repay. Keep it to one or two pages with a clear cost table.
3. Arrange your 5 per cent own contribution and get a bank statement or deposit slip showing the money.
4. Open the Gujarat Gopalak Vikas Nigam pages on the Social Justice and Empowerment Department site at sje.gujarat.gov.in and go to the online application link for finance under corporation schemes. The department's online applications are handled through the e-Samaj Kalyan portal at esamajkalyan.gujarat.gov.in.
5. Register on the portal with your mobile number and email, then log in and complete your citizen profile: name, Aadhaar, caste, income and bank details. The profile data is carried into every scheme form, so fill it carefully once.
6. Select the corporation and the scheme, fill the application form, and upload scanned copies of every document in the list above. Keep each scan legible and within the size limit the portal shows.
7. Submit the application and save or print the acknowledgement carrying the application number.
8. Submit the physical file with self-attested copies at the district Social Justice office or the corporation's district office when asked to do so, and keep the receipt.

How to apply offline

1. Visit the district Social Justice and Empowerment office in your district headquarters, or the corporation office at Block No. 7, 3rd Floor, Dr Jivraj Mehta Bhavan, Gandhinagar.
2. Ask for the application form for the corporation's small scale lending (microfinance) scheme.
3. Fill the form, attach self-attested copies of all documents and the project report, and hand it in against a written acknowledgement.
4. Follow up with the district officer for the field verification visit.

Offline filing is normally used when the online window is closed or when an applicant cannot manage the upload. Ask the district office which route is currently open before travelling.

How much benefit does the scheme provide?

The scheme sanctions a loan of up to Rs 1,25,000. It is a loan, not a grant. The money must be repaid in instalments as set out in the sanction letter. The Gujarat Gopalak Vikas Nigam has not published a fixed interest rate or repayment schedule for this scheme on its public pages, and the rate and tenure are stated in the sanction letter issued to each borrower. Ask for both in writing before you accept disbursement, and do not rely on a figure quoted verbally by an agent.

Disbursement is made into the applicant's own bank account. Where the loan is for the purchase of animals or equipment, the corporation may require proof of purchase, a bill, or in the case of livestock a veterinary certificate and photographs, before releasing the balance.

Why applications get rejected, and how to fix it

• Age above 45. The commonest hard rejection. Nothing can be done after the fact; apply before the birthday that crosses the limit.
• Income certificate above Rs 3,00,000 or expired. Get a fresh certificate from the Mamlatdar showing current family income.
• Caste certificate not from a competent authority. A certificate issued by a body that is not notified as competent is rejected. Re-apply to the Mamlatdar.
• Own contribution not proved. A promise is not enough: attach a bank statement or deposit receipt.
• Existing loan not declared. This is treated as suppression and can lead to rejection or recovery of a disbursed loan. Declare everything.
• Weak or copied project report. A report with no cost break-up and no income projection is sent back. Write specific figures.
• Bank account not in the applicant's name, or account details mismatched with the passbook scan.
• Duplicate application by the same person or a second application after an earlier loan.

How to check your application status

1. Log in to the online application system with the credentials you registered with.
2. Open My Applications and enter the application number from your acknowledgement.
3. The screen shows the stage; submitted, under scrutiny, verified, sanctioned, or rejected with a reason.
4. If the status has not changed for several weeks, contact the district Social Justice office that holds your physical file.

Help and grievance redressal

• Gujarat Gopalak Vikas Nigam, Block No. 7, 3rd Floor, Dr Jivraj Mehta Bhavan, Gandhinagar. Phone 079-23256494.
• Social Justice and Empowerment Department, Block 5, 8th Floor, Sachivalaya, Gandhinagar, for escalation if the district office does not respond.
• The district Social Justice officer is the first point of contact for a file that is stuck at verification.

No agent or middleman can get a loan sanctioned for a fee. Applying online on the government portal is free, and the corporation does not authorise anyone to collect a processing charge on its behalf. Keep the acknowledgement of every paper you hand over.