Purpose: This loan provides financial assistance in the form of a term loan to SHG Federations for lending to SHGs.
Eligibility: The federation must be a primary federation at Village / Cluster Level and whose membership does not exceed 30 SHGs. It should have a clear track record of operations funded by itself for at least past one year. It should have a good credit rating as per the specifications of the bank. The other specifications to verify the credibility of the federation like the organization set up, functioning, operations, etc. will also be looked into while granting the loan.
Quantum of Loan: Maximum permissible finance to SHGs Federation based on the norms of direct finance to SHGs.
Margin: There is no margin for this kind of loan unlike any other personal loan.
Repayment: The repayment can be done through Monthly, Quarterly; Half Yearly installments may be set depending on the project. The total repayment should be done within a maximum period of 5 years.
Security: Charge on fixed assets, (if any) and Assignment of book debts serves as the security for the loan.
Other Documents Required: Documents related to disbursal of loans to SHGs will have to be produced along with other documents demanded for.