National Minorities Development and Finance Corporation (NMDFC) promotes economic and developmental activities for the benefit of the backward sections amongst the minorities with preference to occupational groups and women. Its managing director Abrar Ahmed spoke to HT on a range of issues. Excerpts:
What are the main activities of NMDFC?
It provides finance for income generating activities at concessionary rates of interest, through the state channelising agencies (SCAs). It extends micro finance to the poorest among the minorities through SCAs as well as NGOs. The corporation also provides educational loans to persons belonging to minorities. It organises vocational training programmes, design development and marketing assistance for artisans and craftsmen.
Which are the main target groups for NMDFC assistance?
Target groups for NMDFC are persons belonging to minority communities and living below double the poverty line. At present, minority communities according to the National Minorities Commission Act, 1992, are Muslims, Sikhs, Buddhists, Christians and Parsis. Families having annual income of less than R40,000 in rural areas and R55,000 in urban areas are categorised as below double the poverty line.
What are NMDFC’s major financial assistance schemes?
NMDFC is offering a bouquet of schemes under term loan, margin money loan, educational loan and micro financing schemes through SCAs in the states and union territories. In addition, micro financing is also offered through non-governmental organisations (NGOs). Under the term loan scheme, projects costing up to R5 lakh are considered.
NMDFC provides loan to up to 85 per cent of the project cost, subject to a maximum of R4.25 lakh at an interest rate of 6 per cent per annum.
Similarly, under the margin money loan scheme, loan is provided to beneficiaries availing bank finance to the extent of 25 per cent of unit cost at an interest rate of three per cent per annum, subject to maximum of R1.25 lakh. Educational loan of a maximum of R2.5 lakh is available for professional and technical courses of maximum five years, at an interest rate of 3 per cent per annum.
What measures does NMDFC take to reach the beneficiaries?
NMDFC has two channels to reach to the ultimate beneficiaries. The first are the SCAs nominated by respective state governments. Generally each channelising agency has an office at district level where the beneficiary is required to make formal application. The other channel is through the network of NGOs and self-help groups for micro credit.
Can you give a brief idea about the amount of loan NMDFC has disbursed during the last few years?
During 2009-10, NMDFC was able to disburse an amount of R197.74 crore, covering 1,04,594 beneficiaries which is the highest ever disbursement undertaken since its inception in 1994. The previous year’s (2008-09) disbursement figure was R130 crore covering 51,198 beneficiaries. The total cumulative funds disbursed by NMDFC up to March 31, 2010, were R1388.58 crore.