Microfinance Institutions

Type of Loan

• Working Capital, Term loan or mix of both

Purpose

• On lending as Micro Finance loans to SHGs, JLGs, other groups, individuals and their federations by the company.

Eligibility criteria

The MFIs which fulfill the following criteria, may be considered for finance:

• The MFIs which fulfill the following criteria, may be considered for finance:
  • MFIs which are in existence for 3 years or more.
  • MFIs should have made profit during the last year, as per audited balance sheet. However, if this condition is not met, the following relaxations are considered:
  • If the MFI should have made, profits during two previous years (2019-20 & 2018-19), provided,
    • they are in existence and doing business for more than 3 years
    • there is no erosion in the share capital as on 31st March of previous financial year.
    • the Debt:Equity ratio is not more than 5 times as on 31st March of previous financial year.
    • CRAR is above the regulatory minimum prescribed
    • the loss is on account of extra provisions (beyond the provisions stipulated by RBI) made by the MFI and not because of business losses.
    • there is no rating downgrade by CICs beyond two notch during the year subject to minimum acceptable rating of NABKISAN
  • MFI should not have defaulted in repayment of loans to banks and financial institutions. MFIs having an impeccable credit history.
  • The MFI should be categorised between NKR1 to NKR7 as per internal rating of NABKISAN
  • MFIs should be rated by an accredited rating agency. The credit rating assigned by various accredited agencies and acceptable rating is as under:

Minimum share capital

• As per RBI Guidelines.

Margin

• Interest Margin to Implementing Agencies- RBI guidelines to be followed by MFIs.

Security

• Hypothecation of book debts.
• Demand Promissory Note
• Registration of charge with the ROC
• NACH Mandate / Escrow Account / Post Dated cheques(as applicable)
• Other collaterals to the satisfaction of NKFL.
• Personal Guarantee of the promoters

Rate of interest

• Rate of interest is proposed to be linked to the ALCO rate of Borrowing of NABKISAN and as per the rate of interest policy of NABKISAN applicable from time to time.

Repayment

• Maximum upto 3 years

Processing fees:

• A processing fee of minimum 0.25% plus applicable taxes for new clients upto NKR3 risk category and repeat clients. For other cases 0.75% plus applicable taxes will be charged.

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