How Artisan Credit Scheme is Beneficial for the Minority Community?
The Ministry Of Minority Affairs implemented the Artisan Credit Scheme for Minorities. It was done through the National Minority Development & Finance Corporation.
Now, let’s read all about Artisan Credit Scheme for Minorities.
Purpose of Loan
The aim of the scheme is to meet the credit requirements of craft persons and artisans. Thus, it will work in terms of monetary capital and fixed capital needs to purchase tools, machines, and equipment.
The artisan credit scheme for minorities covers all the artisans of the minority communities. Therefore, including Muslims, Sikhs, Parsis, Christians and Buddhism in this scheme. They are covered from all over the country. The scheme will be implemented via respective State Channelising Agencies(SCA). These agencies are of NMDFC.
- IN RURAL AREAS- Artisans covered under credit line-1 with the family income of Rs. 98,000.
- IN URBAN AREAS- Artisians covered under credit line-2 with the family income of Rs.1.2 Lakhs.
- Preference will be given to artisans who participate in NDMC’S organized exhibition called Hunar Haat. While this exhibition is under the USTAAD scheme of MMA.
- Some artisans will not be eligible to again take the loan under this scheme. These include artisans who are already sponsored by the government under other concession credit schemes.
Details of credit provided
- Under this scheme, the maximum limit to avail of the loan is up to Rs.10 LAKH.
- 90% of the loan amount will be provided by NDMFC. The 10% left will be coming from SCA. Meanwhile, the minimum 5% balance can come from the artisans.
- Moratorium period: NMDFC will provide 3 months to SCA to utilize the fund. Also, the date of disbursement of the loan will be provided by NMDFC. The artisans shall be given a moratorium period of 6 months to set up their units. There may be a beginning of repayment of loans by artisans in the next quarter. It includes 31st March, 30th June, 30th Sept, and 30th December after the expiry of the moratorium period.
- The interest of loan: 5% p.a. Of simple interest can be charged to the artisans on loan extension. The EMI will include the calculation of Principal + Interest as per norms of the bank. The women artisan shall be offered with 1% discount on the interest rate. To the SCA’s, the NMDFC can extend a loan at 2%. In favor of it, the loan extension to artisans shall be at 5% p.a. to male artisans and 4% of women artisans.
- Repayment period: Loan can be repaid by the artisans over a period of 5 years on a quarterly basis after the moratorium period. The SCA can repay the loan in 8 years to NMDFC.
Security of loan
- For loans upto Rs.1,00,000 – Post Dated Cheques & Self-Guarantee (PDCs)
- For loans exceeding Rs.1,00,000 and upto Rs.5,00,000- Post Dated Cheques & guarantee of one employee of Bank/PSU/Govt. Or Public Representative/ one income tax payee.(PDCs).
- For loans exceeding Rs.5,00,000- Guarantee of two employees of Bank/Govt./PSU or Public Representative/ two income tax payee OR Collateral by way of a contract of land, property/Immovable Property of not less than the same value & Post Dated Cheques.
The SCA’S will tie-up with insurance providers to set insurance facilities for the artisans. It will be provided against the death and disability of the artisans. The duration of the loan will be taken for insurance.
Major Scheme Parameters:-