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The National Minorities Development & Finance Corporation (NMDFC) provides business loans to promote self-employment among the minority communities such as Muslims, Christians, Buddhists, Jains, and Parsis.

The Corporation, under the Ministry of Minority Affairs, also aims to promote the economic development of backward sections from minority communities.

Types of Minority Business Loans Available in India

Take a look at various loan schemes NMDFC provides:

1. Term Loan Scheme

Under this scheme for minorities, NMDFC finances up to 90% of the project cost of up to ₹30 Lakhs. You have to bear the remaining cost along with the State Channelising Agencies (SCAs).

The following are the eligible sectors of commercially viable and technically feasible businesses under the Term Loan scheme:

Agriculture and allied
Artisans and traditional occupations
Small businesses
Technical trades
Transport and services

2. Virasat Scheme

Virasat scheme is part of the Term Loan facility designed to cater to the artisans’ working and fixed capital requirements. Artisans from minority communities can get a loan amount of up to ₹10 Lakhs. NMDFC finances 90% of the loan amount with a minimum 5% contribution from the beneficiary.

3. Micro Finance Scheme

Self-Help Groups (SHGs) of up to 20 members can get up to ₹30 Lakhs under this scheme . It lays a special focus on minority communities’ women-led groups in remote rural areas and rural slums. In other words, each member of the SHGs can get up to ₹1.5 Lakhs as loan amount.

Interest Rates of a Business Loan for Minorities

The NMDFC provides business loans to minority sections through SCAs under two credit lines.

The Credit Line-1 benefits are available to those having an annual family income of up to ₹98,000 and ₹1.2 Lakhs in rural and urban areas, respectively. On the other hand, it extends the Credit Line-2 benefits to beneficiaries with an annual family income of ₹8 Lakhs.

Here are the interest rates and maximum amount provided by NMDFC on different business credit facilities under Credit Line-1 and Credit Line-2 categories:

Business Loan Scheme	Credit Line	Maximum Loan Amount	Rate of Interest (p.a.)
Term Loan Scheme	Credit Line- 1	₹20 Lakhs	6%
Term Loan Scheme	Credit Line- 2	₹30 Lakhs	8% to male beneficiaries 6% to female beneficiaries
Virasat Scheme	Credit Line- 1	₹10 Lakhs	5% to male beneficiaries 4% to female beneficiaries
Virasat Scheme	Credit Line- 2	₹10 Lakhs	6% to male beneficiaries 5% to female beneficiaries
Micro Finance Scheme	Credit Line- 1	₹1 Lakh per individual and up to ₹20 Lakhs for Self-Help Groups (SHGs with up to 20 members)	7%
Micro Finance Scheme	Credit Line- 2	₹1.5 Lakhs per Individual and up to ₹30 Lakhs for Self-Help Groups (SHGs with up to 20 members)	10% to male beneficiaries and 8% to female beneficiaries

Disclaimer: The interest rates and maximum loan amount provided above depend on the NMDFC’s discretion. Check the interest rate and loan amounts on the official NMDFC website before applying.

Eligibility Requirements for Business Loans for Minorities

You need to qualify for the following eligibility criteria to avail of loan schemes from NMDFC:

The applicant must be from notified minority communities under the National Commission of Minorities Act, 1992
The annual family income of the applicant must not exceed ₹8 Lakhs

Disclaimer

Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.