Registered as a public limited company in 1995 under the Companies Act 1956, North Eastern Development Finance Corporation Ltd. (NEDFi) is also registered as an NBFC with the RBI. The corporation’s Board of Directors include representatives from shareholder institutions, State Governments, and eminent people from the North Eastern region.
The main objective of NEDFi is to offer financing to MSMEs and large corporations intending to set up infrastructure, industrial, and agri-allied projects in the North Eastern region of India. The corporation also offers microfinance through NGOs and Microfinance Institutions (MFIs).
To know more about North Eastern Development Finance Corporation Ltd and the schemes it offers, read on.
As mentioned above, North Eastern Development Finance Corporation Ltd., NEDFi for short, is a public limited company. The concept of forming a corporation that focuses on North Eastern development was established in 1994 and was put into action in 1995 through NEDFi.
Initially, the corporation was under the Banking Division of the Ministry of Finance. It was later put under the Ministry of Development of North Eastern Region (DoNER) upon its formation in 2004.
NEDFi aims to catalyse the development in the North Eastern region of India. For that, it offers financing through different schemes as well as consultancy services. The corporation is also the designated nodal agency to distribute incentives provided by the GoI to industries in the NER under NEIIPP 2007.
The motto of NEDFi is ‘Championing the entrepreneurial spirit of the North East’. In alignment with this, the main objective of NEDFi is to promote entrepreneurial and industrial development and inclusive geographical growth in the North Eastern region.
Under this, the other objectives of NEDFi are to develop the following:
Small, medium and large enterprises
Poultry and dairy
To further these objectives, NEDFi has numerous loans and schemes that help corporations engage and establish developmental projects that perpetuate these goals.
The main responsibility of NEDFi is to offer financial support to micro, small, and medium enterprises as well as to large corporations. The support, however, is subject to the fact that the intent is to set up developmental projects in the North Eastern region of the country.
These developmental projects can be in the industrial, agri-allied, or infrastructure sectors. Other responsibilities of the North Eastern Development Finance Corporation Ltd. include:
Recognise and financially support commercially viable industries
Offer advice and consultancy services to private sectors, state governments, and other agencies
Promote entrepreneurship through skill development
Generate sustainable livelihood through CSR and microfinance
This NEDFi loan scheme offers medium to long-term financing for the purpose of establishing new projects and expanding already existing ones. The funding, however, is only offered in manufacturing and service sectors to create assets that would generate revenue.
The maximum loan amount offered under this NEDFi loan is 12% of the net worth of a single project. The scheme requires a minimum contribution of up to 30% of the total project cost from the promoter.
The repayment tenure of this scheme ranges between 5-8 years without the moratorium period offered by the corporation. The interest rate is the Prime Lending Rate (PLR) + up to 3% annually.
To be eligible for this NEDFi scheme, the unit must be within the eight North-eastern states. The scheme also requires assets of the unit as security and a fee ranging from 0.75% - 1% of the loan amount.
As the name suggests, this is one of the NEDFi loan schemes aimed at offering finance to acquire new equipment or machinery. The loan is available to companies that have existed for at least five years and have generated revenue for at least three years.
The loan would be a maximum of 75% of the equipment cost (incl. taxes, installation charges, duties, and transportation charges). This is subject to a minimum of ₹25 Lakhs and a maximum of ₹10 Crores.
The promoter’s contribution needs to be a minimum of 30% of the equipment cost. The NEDFi loan comes at the same interest rate as the Rupee Term Loan scheme. The repayment period, however, is six years, including the moratorium period.
This is among the many NEDFi schemes offering funding to promote entrepreneurship. The borrower can use this scheme for working capital requirements, capital expenses, cash flow improvement, debt consolidation and more.
To be eligible for the financing, the unit must be operating for a minimum of 5 years. The corporation may lower this to 3 years at its discretion, depending on the merit of the unit. The loan amount is subject to a minimum of ₹25 Lakhs.
The repayment tenure can be up to 5 years, including a moratorium period. To offer the loan, the corporation will require adequate collateral, corporate guarantee, escrow of receivables, and a security margin of a minimum of 25%.
This NEDFi loan offers one-time financial support for the working capital requirements. The loan amount is subject to a maximum of 75% of the working capital requirements with an interest rate of PLR + a maximum of 3% per annum.
The repayment term is one bullet payment after 18 months. The corporation will require an upfront fee between 0.75% - 1% of the loan amount. For security, the corporation may accept collateral, promoter’s personal guarantee, corporate guarantee, or other.
This NEDFi scheme is available to self-employed individuals, entrepreneurs, and agriculturists (small and mid-sized) and more. The funds are instantly available and can be used for numerous business-related purposes within the north eastern region of the country.
To be eligible, the entities should be in existence for at least three years, should maintain bookkeeping, and should have experience in developing JLGs/SHGs. The interest rate for this scheme is PLR + 0.5%, and a processing fee of 1% of the loan amount.
The repayment tenure is a maximum of five years, including the moratorium period. The corporation will also require collateral that is proportionate to the loan amount.
This NEDFi loan scheme is made available to support first-generation entrepreneurs who require equity. Entrepreneurs can avail of this loan to set up new projects or diversify, expand, and modernise an existing establishment.
The cost of the project can be up to ₹50 Lakhs, and entrepreneurs can borrow up to 75% of the total project cost. The repayment tenure of the scheme is up to 7 years, and eligibility includes the technical qualification of the borrower in the relevant field of business.
This scheme by the North Eastern Development Finance Corporation Ltd offers financial aid to establish or to expand/modernise/diversify industrial/infrastructure projects. The funding, however, is not available for commercial real estate.
To avail of this scheme, the project cost can go up to ₹200 Lakhs. The loan amount can go up to ₹100 Lakhs as a term loan or a working capital loan, or a combination of both. The repayment tenure under this scheme can go up to 7 years, including the moratorium period.
The collateral under this scheme can be assets for which the financing is availed, financed movable assets, or equitable mortgage of the project site.
Among the many NEDFi loan schemes, this one is specially designed for women between the ages of 18 and 50. The financing made available is for women business owners to set up or expand/diversify/modernise their ventures.
The project cost should be a maximum of ₹15 Lakhs, and the loan amount is subject to a maximum of 75% of the project cost. The promoter’s contribution to this scheme should be 25% of the project cost. The repayment of this NEDFi loan scheme can be between 3-7 years.
This NEDFi scheme is available to finance the working capital needs of activities that generate revenue. However, it excludes contract works, plantation, real estate, and cultivation. The maximum loan amount available under this scheme is ₹20 Lakhs.
The promoter’s contribution should be 25% of the project cost. The scheme is a term loan and comes with a repayment tenure of 7 years, including the moratorium period.
Yes, North Eastern Development Finance Corporation Ltd. is a Union Government company established in 1995.
In simple terms, the role and objective of NEDFi is to promote development in the North Eastern Region of the country. For this, the corporation offers financing and consultancy services.
The interest rate varies for all the NEDFi loan schemes,starting from 7% p.a.
The North Eastern Development Finance Corporation Ltd. was established in 1995 with headquarters in Guwahati, Assam.