Micro Credit Finance Scheme (LIDCOM, Maharashtra)

What is the Micro Credit Finance scheme in Maharashtra?

Micro Credit Finance is a small-business finance scheme run by the Leather Industries Development Corporation of Maharashtra Limited, known as LIDCOM, a state government corporation working under the Social Justice & Special Assistance Department. LIDCOM was set up to lift the Charmakar community, the traditional leather-working castes of Maharashtra including Chambhar, Dhor, Holar and Mochi, out of low-income occupations by financing self-employment.

According to the LIDCOM Micro Credit Finance page, the scheme provides assistance of up to Rs 1,40,000 at 5% interest per year. Of this, Rs 31,000 is given as subsidy, Rs 4,000 is the beneficiary's own contribution, and the remaining amount is advanced as a loan. The loan portion is funded by the National Scheduled Castes Finance and Development Corporation (NSFDC), New Delhi, a Government of India undertaking for which LIDCOM acts as the state channelising agency.

Micro Credit Finance is deliberately a micro-enterprise product. It is meant for the vegetable seller who needs a handcart and stock, the cobbler who wants a stitching machine and leather, the woman who wants to run a tailoring or bangle shop from home, or the household setting up a small grocery or dairy unit. It is not a project loan for a factory, and LIDCOM does not expect a formal business plan of the sort a bank would demand, but it does expect the applicant to already know the trade.

Readers should be careful not to confuse this with LIDCOM's 50% Subsidy Scheme, which is the state-funded product frequently quoted on aggregator sites. Under the 50% Subsidy Scheme the maximum loan is Rs 50,000, of which 50% is subsidy subject to a ceiling of Rs 10,000, and the income limit is Rs 1,00,000 a year. Both schemes are offered at the same district offices, and staff often decide which one to route an application into based on the size of the requirement and the applicant's income certificate.

Who is eligible for Micro Credit Finance?

You can take part if:

• You belong to the Charmakar community and hold a caste certificate issued by a competent officer such as the Tahsildar or Sub-Divisional Officer.
• You are between 18 and 50 years of age.
• You are a permanent resident of Maharashtra.
• Your annual family income is within the ceiling; LIDCOM's Micro Credit Finance page states Rs 3,00,000 for rural and urban applicants alike, following the NSFDC norm.
• You have working knowledge of the business you propose. LIDCOM asks for demonstrated experience or training in that trade.
• You hold a valid income certificate from an authorised government officer.

You are not eligible if:

• You belong to a caste outside the Charmakar group. Applicants from other Scheduled Castes cannot apply to LIDCOM and must approach the Mahatma Phule Backward Class Development Corporation or the Sahityaratna Lokshahir Annabhau Sathe Development Corporation.
• You are under 18 or over 50 years old on the date of application.
• Your family income exceeds the ceiling stated in your income certificate.
• You are not a permanent resident of Maharashtra.
• You are a defaulter on an earlier LIDCOM, NSFDC or bank loan, or another member of the same household is currently repaying a LIDCOM loan.
• You cannot produce a caste certificate. A caste claim without a certificate is the single most common reason an application is returned at the counter.

LIDCOM also runs sister products at the same offices. The Term Loan Scheme, the Mahila Samridhi Yojana for Charmakar women and the Utkarsh Loan Scheme — so an applicant who does not fit the Micro Credit Finance income band may still be routed into one of those.

What documents are required?

Carry originals for verification and one set of self-attested photocopies for the file. LIDCOM does not charge for the application form.

How to apply for the Micro Credit Finance scheme

Micro Credit Finance is an offline scheme. There is no online submission window on the LIDCOM website, and any site that offers to "register" you online for a fee is not authorised.

1. Locate your LIDCOM district office. LIDCOM operates a district office in each district of Maharashtra, usually inside or near the collectorate or the Assistant Commissioner of Social Welfare's premises. The head office is at Bombay Life Building, 5th Floor, 45 Veer Nariman Road, Fort, Mumbai 400 001.
2. Collect the prescribed application form from the district office during working hours, Monday to Saturday, 9:00 am to 5:00 pm. The form is issued free of cost.
3. Fill in the form with your personal details, caste, income, the trade you propose to start or expand, the amount required and your bank account details.
4. Attach self-attested copies of the caste certificate, income certificate, residence proof, Aadhaar, age proof, bank passbook, photographs and dealer quotations for whatever the money will buy.
5. Submit the completed form at the same district office and obtain an acknowledgement with an inward number and date. Keep this, it is the only reference you will have while the file moves.
6. Attend verification. The district manager or field officer checks the documents, may visit the proposed business location and records whether you have the skill claimed.
7. Collect the sanction letter if the proposal is approved. It states the loan amount, the subsidy of Rs 31,000, your Rs 4,000 contribution, the interest rate of 5% and the repayment schedule.
8. Complete the loan formalities, deposit your own contribution, and the amount is released through your bank account or directly to the supplier against the approved quotation.

How do you check the status of a LIDCOM application?

LIDCOM does not publish an online application-tracking facility for Micro Credit Finance. Status has to be checked the same way the application was made:

1. Visit the district office with your acknowledgement slip and quote the inward number and date.
2. Ask specifically whether the file is at verification, at district sanction or has moved to the head office / NSFDC stage, because each stage has a different waiting time.
3. If the district office cannot give an answer, write to the LIDCOM head office in Mumbai on 022-45240417, 022-22044186 or 022-22047157, quoting the inward number and district.

Sanctions in a financial year depend on the target and budget allotted to that district, so an eligible application submitted late in the year may be carried into the next year's list rather than rejected.

Why LIDCOM applications get rejected, and how to fix it

• No caste certificate, or a certificate for a caste outside the Charmakar group. Apply for the certificate at the Setu / Aaple Sarkar centre first; the loan application will not move without it.
• Income certificate above the ceiling. Get a fresh certificate for the current year rather than reusing an old one, and check which of LIDCOM's schemes your income actually fits.
• Age outside 18–50. There is no relaxation; check the date of birth on the school leaving certificate before applying.
• No knowledge of the trade proposed. Applications for a business the applicant has never worked in are commonly returned. Attach a training certificate, or apply for a trade you have actually worked in.
• Existing default. Clear the earlier LIDCOM or bank dues, obtain a no-dues letter and reapply.
• Missing dealer quotation. Field officers need to see what the money buys. A quotation on a dealer's letterhead settles this.
• Incomplete bank details or an inoperative account. Reactivate the account and update the passbook before submitting.

Where to complain if the application is stuck

• LIDCOM head office, Mumbai: 022-45240417, 022-22044186, 022-22047157. Office hours are Monday to Saturday, 9:00 am to 5:00 pm.
• LIDCOM district manager, the first authority for delays in verification or sanction at district level.
• Assistant Commissioner of Social Welfare of the district, and above that the Regional Deputy Commissioner of Social Welfare, for complaints about how the district office has handled a Social Justice Department scheme.
• Aaple Sarkar grievance portal, grievances.maharashtra.gov.in, for a written state-level grievance with a tracking number.

No agent or middleman can get a LIDCOM loan sanctioned for a fee. The application form is free, and no officer is entitled to a payment for accepting or forwarding it.