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The National Minority Development and Finance Corporation (NMDFC), a central public sector enterprise under the Ministry of Minority Affairs, offers concessional loans / schemes to provide financial assistance to minorities in their business. Minority business loans are a boon for minorities which gives great relief to such entrepreneurs. Let's read on to know more about it.

<img alt="Business Loan for Minority" border="0" data-original-height="720" data-original-width="1280" height="360" src="https://blogger.googleusercontent.com/img/a/AVvXsEgSmjm-o5vhkW2OYk77xVsReTTkAqM7UlFP41xPHdXkiY-TNl1j5ZOQQd7ebAK33-XxkcF9eLZmfjBOflf_UD4N-a7W-o4JFU0ILi0gQzHIsmzQjuR_-klOF3dMsFl53QjU_PIBwEisPYAnO865355ucMOTXmCiFybmW8HUbhTkgYDVxOftgluFXeB2=w640-h360" style="margin-left: auto; margin-right: auto;" title="Business Loan for Minority" width="640" /> Business Loan for Minority

The general category individuals received most of the loans disbursed at 68%, followed by women at 44% and borrowers at 33% for the time being. Individuals belonging to Scheduled Castes and Scheduled Tribes received 12% of the approved loans during the financial year 2018-19. (1) Private banks and non-banking finance companies outperformed public sector financial institutions when it comes to lending.

The above figures show how getting a business loan can be a struggle for the people of a minority community, especially in today's challenging economic conditions. The nationwide lockdown this year has hit small traders hardest, forcing them to close their shops.

Negative GDP growth forecasts by economists for 2020-21 have further dampened entrepreneurial sentiment with little or no hope of recovering lost business. However, if you own a small business that is part of a minority group, relief options are especially available to you. This is because you can get small business loans at concessional rates for minorities and support your enterprise in such difficult times.

What is a business loan for a minority? Business loans for minorities are concessional loans given to minorities who want to grow their business but lack funds for it. According to the NMC (National Commission for Minorities) Act, Muslims, Christians, Parsis, Buddhists, Sikhs and Jains are considered a minority community. However, being part of a minority group does not guarantee you a loan concession. It will only be given to those who need it most. And to evaluate this, your annual income will also be taken into consideration.

Providing business loans to minorities The National Minority Development and Finance Corporation (NMDFC) was established in 1994 with the mission of providing financial assistance to those belonging to the minority minorities and those who want to start a business. NMDFC is a joint venture supported by the Government of India, the State Governments and the Union Territories. Religious minorities are a target group of NMDFC and are eligible for minority business loans except women and other business groups. According to the National Minorities Commission Act, 1992, Sikhs, Christians, Parsis, Muslims, Buddhists and Jains are classified as religious minorities.

Discounts on loan disbursement are not determined solely on the basis of your minority status. The family's annual income is also assessed before deciding on a loan. In India, each state and union territory is given a certain share of credit in proportion to its population. A network of NGOs or self-help groups as well as state channeling agencies help NMDFC reach out to needy beneficiaries. By the end of 2019, NMDFC's paid-up share capital is Rs. 2077. 51 crore out of which Rs. 1700 crore was contributed by the government and the rest by the states and union territories.

Government business loans for minorities The Reserve Bank of India has authorized a special cell headed by the Assistant / Deputy General Manager of the banks. The government ensures that all commercial banks provide 10 per cent priority sector lending to minorities. The Directorate of Revenue Intelligence (DRI) scheme allows minority communities to obtain loans from banks.

The National Minority Development and Finance Corporation (NMDFC) has been established on the initiative of the Ministry of Minority Affairs, Government of India. NMDFC was established on 30th September 1994 under Section 25 of the Companies Act which is now under Section 8 of the Companies Act, 2013. NMDFC's share capital has increased from Rs 500 crore to Rs 3,000 crore. Under this law, women and artisans are given special importance.

Thus, government business loans give equal cash flow rights to the country's minority communities.

List of minority loans that can be used for business in India and their features are as under:

Minority loan maximum limit interest rate annually

Term Loan 20 Lakh 6% (Women Beneficiaries)

30 lakh 8% (male beneficiaries)

Micro Finance 1.5 Lakh up to a maximum of 8%

1.5 lakh 10%

Types of business loans for minorities

There are various credit schemes offered by NMDFC such as:

1. Term loan Minority business loans are provided under this scheme on an individual basis by state channelizing agencies or SCA. The interest rates paid by the beneficiaries vary for men and women. A maximum of Rs. 30 lakh can be obtained for financing your BU. Flexibility for those coming under credit line 2, while minorities classified under credit line 1 can get Rs. Can get up to. 20 lakhs. The interest rate to be paid by the beneficiaries is flat 6% for both men and women under credit line 1 whereas men are required to pay a further 8% interest if they get credit in credit line 2 category. A moratorium period of 6 months and a repayment period of 5 years is available for all the beneficiaries. Cred to SCAPayments are allowed within 8 years at an interest rate of 3% under both the lines. The reality of the minority family on the land is advised to be the basis for financial assistance and thus loan approval by SCA.

2. Inheritance plan Craftsmen who want to purchase equipment or machinery to carry on their business and need working or fixed capital can easily get Rs. Can benefit up to. Under this scheme, small commercial loans of Rs 10 lakh are provided to minorities. While men are required to pay 5% interest, women are given 1% discount and are required to pay only 4% interest annually. Moratorium period of 6 months and payment up to 5 years is applicable. SCA offers 8 years repayment period with interest rate of 3% for men and 2% for women.

3. Micro-finance The scheme has especially benefited women in the hinterland of Chhewada who do not have access to basic banking facilities or SCA. Despite their difficulties, they still want to be financially independent. Such women are given microcredit through a network of self-help groups (SHGs) spread across the villages and urban slums to provide informal financial support and enable home delivery of loans. A maximum of Rs. 20 lakh by a group of 20 women and Rs. 30 lakh for those under Credit Line 2 with a flat interest rate of 7% for all previous and 10% for men and later 8% for women. The repayment period for both is 3 years. NMDFC charges flat rates of interest from SCAs or NGOs which in turn charges interest applicable to SHGs for both lines of credit.

How to get a minority loan? You can apply for a minority business loan in India online as well as offline. You can check your eligibility criteria on the website of the Ministry of Minority Affairs and fill up the online application form. You can also check financial providers for minorities and specific bank loan schemes. You can apply online, check the EMI and find the best interest rates for your loan on the website of the provider you choose. Aside from the above schemes, there are many promotional schemes to induce self-employment in minorities. Such schemes include training and assistance to aspiring entrepreneurs for skill development to establish a successful business.

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