Micro Finance Scheme - Credit Line 1 for Minority Community (Haryana)

What is the Micro Finance Scheme Credit Line 1 for Minority Community in Haryana?

Micro Finance Scheme - Credit Line 1 for Minority Community is the small-loan window of the National Minorities Development and Finance Corporation (NMDFC), a Section 8 company under the Ministry of Minority Affairs, Government of India, delivered in Haryana by the Haryana Backward Classes and Economically Weaker Sections Kalyan Nigam. The Nigam has been Haryana's state channelising agency for NMDFC since 1995-96.

NMDFC's own description of the scheme states its purpose precisely: credit is extended to the members of Self-Help Groups (SHGs), predominantly comprising minority women scattered in remote villages and urban slums, who are not able to take advantage of formal banking credit. That is the whole design. A woman running a tailoring machine, a small kirana counter, a goat or a food-cart needs Rs 30,000 to Rs 1 lakh, cannot offer collateral, and is invisible to a commercial lender. The SHG supplies the discipline and the guarantee the bank would otherwise demand.

Under Credit Line 1, for families with annual income up to Rs 3 lakh, the loan is Rs 1,00,000 per SHG member, and a group of up to 20 members can draw up to Rs 20,00,000 in total. Interest to the beneficiary is 7% a year. Repayment runs for three years with a moratorium of three months.

Credit Line 2, for families earning up to Rs 8 lakh a year, lends Rs 1,50,000 per member and up to Rs 30,00,000 per group, at 10% a year for men and 8% for women. Credit Line 1 is significantly cheaper, so establish which line you fall in before you apply.

In Haryana the notified minority communities are Muslim, Sikh, Christian, Buddhist, Parsi and Jain, as listed by the Kalyan Nigam. NMDFC's stated preference within the target group is for occupational groups and women.

Key features

• Rs 1,00,000 per SHG member; Rs 20,00,000 per group of up to 20.
• Interest 7% a year under Credit Line 1.
• Family income limit Rs 3 lakh a year.
• Three-year repayment, three-month moratorium.
• Delivered through Self-Help Groups of minority members, predominantly women.
• Applied for on saralharyana.gov.in or at the Kalyan Nigam.

Who is eligible for minority micro finance Credit Line 1 in Haryana?

You can apply if:

• You belong to one of the six notified minority communities: Muslim, Sikh, Christian, Buddhist, Parsi or Jain, and hold a religious or minority certificate.
• Your annual family income is up to Rs 3,00,000.
• You are a resident of Haryana, so the Haryana Kalyan Nigam is your channelising agency.
• You are a member of a Self-Help Group of not more than 20 members, through which the credit is routed.
• You have a specific income-generating use for the money. The loan is tied to an activity.
• The group has a working savings and internal-lending record and a bank account in its own name.

You cannot apply, or you are not eligible, if:

• You do not belong to a notified minority community. Backward Class women in Haryana use the Nigam's Mahila Samiriddhi Yojana window instead, funded by NBCFDC.
• Your family income exceeds Rs 3 lakh a year: apply under Credit Line 2 instead, up to Rs 8 lakh, at 10% for men and 8% for women.
• Your family income exceeds Rs 8 lakh, which is outside NMDFC's target group.
• You are not a resident of Haryana.
• You are not part of a Self-Help Group, or your group has more than 20 members.
• You want the money for household expenses, a wedding or repaying old debt — the scheme funds income generation only.
• You or your group are in default on an earlier NMDFC or Kalyan Nigam loan.

What documents are required?

NMDFC's published security norms make this the easiest of its loans to secure: self-guarantee and post-dated cheques suffice for loans up to Rs 1 lakh, which is exactly the Credit Line 1 ceiling. No outside guarantor and no property mortgage is required at this size, the group's own guarantee does the work.

How to apply for minority micro finance in Haryana

1. Form or join a Self-Help Group of no more than 20 members from the minority communities, open a group bank account, and build a few months of savings and internal-lending record. Groups with no track record are not financed.
2. Confirm your credit line. Annual family income up to Rs 3 lakh puts you in Credit Line 1 at 7%; above that, up to Rs 8 lakh, you fall in Credit Line 2 at 10% or 8%.
3. Update the Parivar Pehchan Patra of each member at meraparivar.haryana.gov.in, because Haryana reads family income off this record for every SARAL service.
4. Collect and self-attest the income certificates, minority or religious certificates, residence proofs and Aadhaar copies of all borrowing members.
5. Prepare a one-page activity note per member: what she will buy or do, what it costs, what it should earn each month.
6. Register on saralharyana.gov.in and open the Micro Finance Scheme - Credit Line 1 for Minority Community service under the Haryana Backward Classes and Economically Weaker Sections Kalyan Nigam, fill it, upload the documents and submit.
7. Save the application reference number, then attend the Kalyan Nigam district office with the group's records and members' originals for verification and the loan agreement.

The proposal may equally be handed in at an Antyodaya SARAL Kendra or at the Nigam's head office, SCO 813-14, Sector 22-A, Chandigarh 160022. Groups usually find the district office easier, since the whole group's file moves together. NMDFC also publishes its guidelines for micro financing schemes and downloadable application forms on nmdfc.org, worth reading before the group meets.

How do you check the status of the application?

Track the application on saralharyana.gov.in through Track Application Status, using the reference number issued at submission.

For sanction and disbursement, contact the Kalyan Nigam: 0172-2701074 or 0172-2701722, or hbckn222@gmail.com; quoting the reference number. The Nigam's site, hbckn.org.in, offers a loanee login where borrowers can view their loan account, and lists 0172-4784040 as technical support for the website.

For group applications, individual members are usually not tracked separately until sanction. Ask the group's office-bearers for the proposal number the district office issued, and follow that.

What are the repayment terms?

Repayment under Credit Line 1 micro finance runs for three years, at 7% a year to the beneficiary, after a moratorium of three months. That is the shortest schedule among the NMDFC schemes, which is appropriate for loan sizes up to Rs 1 lakh.

Instalments are normally collected by the group and passed on, which is why the group's savings and repayment discipline is examined before sanction. A default by one member is felt by all of them, because the group's guarantee is what secured the loan and the group's next cycle of credit depends on a clean record.

The comparison that matters is not with a bank loan, which was never available, but with the informal lender the borrower would otherwise use. On a Rs 1 lakh loan over three years, the difference between 7% a year and informal moneylending rates is the difference between an activity that grows and one that services debt.

Why do micro finance applications get rejected?

• Group has no savings or lending record. A group formed the week before the application is not financed.
• More than 20 members in the group, or members who are not from the notified minority communities.
• Income certificate and Family ID disagree, so the credit line cannot be fixed.
• Family income above Rs 3 lakh filed under Credit Line 1 instead of Credit Line 2.
• No activity described for individual members, so repayment capacity cannot be assessed.
• Group bank account missing or dormant.
• An earlier default by the group or by a member on a government loan.
• Annual funds exhausted at the channelising agency. Ask where the proposal stands rather than filing a fresh one.

Where do you complain?

Use the grievance option on saralharyana.gov.in with the application reference number for anything stuck in the online workflow.

Escalate to the Managing Director, Haryana Backward Classes and Economically Weaker Sections Kalyan Nigam, SCO 813-14, Sector 22-A, Chandigarh 160022, on 0172-2701074 or 0172-2701722, or at hbckn222@gmail.com. Groups should complain in the group's name, with the proposal number.

Because the funds are central, an unresolved matter can also be raised with NMDFC, 1st Floor, Core-1, Scope Minar, Laxmi Nagar, New Delhi 110092. Within the state, the Haryana Chief Minister's Window at cm-window.haryana.gov.in handles cross-department grievances. The Antyodaya SARAL helpline on 1800-2000-023, and the alternative line 0172-3968400, run 7 am to 9 pm.