Credit Based Schemes for SC (Scheduled Castes) – Term Loan

Credit Based Schemes for SC are government-supported term loan initiatives aimed at improving access to institutional finance for Scheduled Caste individuals. These schemes focus on supporting viable business, service, and self-employment projects by facilitating bank credit, often along with interest support or credit guarantees. The objective is to promote economic inclusion by enabling SC beneficiaries to establish or expand income-generating activities through structured loans rather than direct subsidies.

Listed below are the main features and benefits of the Term Loan (TL) scheme:

• Provides term loan support of up to 95% of the project cost for eligible income-generating projects

• Encourages entrepreneurship and self-employment among SC beneficiaries

• Term loans of up to ₹5 Lakh available at 6% interest

• Term loans of ₹5-10 Lakh available at 8% interest 

• Term loans of ₹10-50 Lakh available at 9% interest

• Repayment period of up to 10 years in annual, quarterly, or half-yearly instalments

• Up to 6 to 12 months of moratorium period on the basis of the nature of the business

The scheme can be applied for by any entrepreneur if they belong to the Scheduled Caste category. The annual family income of the applicant must be less than ₹3 Lakhs.

Here are the list of documents needed to apply for the scheme:

• Proof of Scheduled Caste category (Caste Certificate)

• Aadhaar card

• Bank account details

• Income certificate

• Application in NSFDC’s prescribed format with business details

Eligible Scheduled Caste applicants can secure term loans through NSFDC's structured process via State Channelizing Agencies (SCAs). Follow these streamlined steps for a smooth application:

1. Submit application: Approach your District SCA office with complete term loan documents proving eligibility and project details.

2. District scrutiny: SCA reviews and forwards viable proposals to their Head Office.

3. Project appraisal: SCA assesses business viability and recommends suitable cases to NSFDC.

4. Alternative channels: Apply via partner Regional Rural Banks (RRBs), public sector banks, or NBFC-MFIs with valid MoUs.

5. NSFDC evaluation: Project and Banking Desk examines proposals for Project Clearance Committee (PCC) approval.

6. Sanction and LoI: Approved projects receive sanction letters with terms issued to the lending agency.

7. Fund release: After accepting terms and meeting norms, NSFDC disburses to agencies, which then release loans to beneficiaries.

8. Repayment: Adhere to the schedule set by SCA or channelizing agency.
    

This process ensures thorough vetting while supporting SC entrepreneurs effectively.

Credit Based Schemes for SC help bridge the gap between aspiring entrepreneurs and formal credit systems by offering structured term loan support. While government schemes provide foundational assistance, individuals may also explore additional financing options such as an instant business loan to meet evolving business needs and accelerate growth.