Government sponsored schemes:

1] Differential rate of interest (DRI) – 1972.

a) Main objective: To assist poorest poor and to bring them above poverty line.
b) Applicable: All over India.
c) Eligibility norms: Individuals whose family income not to exceed Rs. 18,000/- p.a.
in rural areas and Rs. 24,000/- p.a. in urban and semi urban areas.
d) Purpose of loan: For productive activities, pursuing higher education by indigent
students, purchase of artificial limbs, hearing aids, wheel chair by physically
handicapped.
e) Quantum of loan: Maxi. Rs. 15,000/- as term loan or working capital or both for
productive purpose. For housing Rs. 20,000/-
f) Target: Mini. 40% to SC/ST and 2/3rd to be routed through rural and semi urban
branches.
g) Classification: Weaker section of advances under priority sector.
h) Rate of interest: 4% p.a. simple rate of interest.
i) Security: Hypothecation of assets created out of bank loan. No collateral security.
j) Repayment: Maxi. 5 years including grace period up to 2 years.

2] Prime minister Rozgar yojana (PMRY) - 2nd Oct. 1993.

a) Main objective: To provide employment for setting up of micro enterprises by educated

unemployed youth. All activities except direct agriculture operations like raising crops,
purchase of manures etc can be financed.
b) Applicable: Both urban and rural areas all over the country.
c) Eligibility norms: Age: 18-35 years, for applicants in NE States, HP, and Uttarkhand,
Jammu and Kashmir 18-40 years. For SC/ST, EX-Serviceman physically handicapped
and women in all states 18-45 years.
d) Educational qualification: Mini. 8th passed or ITI passed.
e) Income: Income of the beneficiary along with the spouse or the income of parents of
beneficiaries to exceed Rs. 1 lac p.a.
f) Residence: Permanent resident of the area for at least 3 years.
g) SHG under PMRY: SHG may consist of 5 -20 educated unemployed youth undertaking
common economic activity. There would not be upper ceiling on the loan.
h) Implementing agencies: The district industry centres and Directorate of industries.
i) Project cost: Business/Service sector Rs. 2 lacs and for industry sector Rs. 5 lacs. Loan
to be of composite nature. Rs. 10 lacs. If 2 of more eligible persons join in a partnership.
Assistance shall be limited to individual admissibility.
j) Targets: SC/ST- 22.5%, OBC- 27%, Women entrepreneurs 30%.
k) Classification: Advances to SC/ST, Artisans village and cottage industries up to Rs.
50,000/- only to be classified as weaker section.
l) Subsidy: 15% of project cost with a ceiling of Rs. 12,500/- in states other than NE. For
NE, HP, J & K etc. 15% of project cost with a ceiling of Rs. 15,000/- for NE, HP, J & k
etc. Subsidy for SHG has been enhanced to Rs. 15,000/- to maxi. Rs. 1.25 lacs per SHG.
Lock in period is 3 years.
m) Repayment: 3 years to 7 years with moratorium of 6 to 18 months where necessary.

3] Swarna Jayanti Gram Swarojgar Yojana – 1st April 1999

a) Objective: To rise individuals/ groups of rural poor above poverty line over a period of
time. Scheme is funded by centre and states in ratio 75: 25.
b) Applicable: In rural areas.
c) Eligibility norms: Rural poor identified through Below Poverty line Census duly
approved by gram sabha.
d) Implementing agencies: DRDA/Financial institutions/ PRI/ NGO.
e) Purpose of loan: Economically viable and productive, farm sector and non- sector
activities identified for each block.
f) Quantum of loan: Full amount as per unit cost prescribed by NABARD.
g) Target: Women – 40%, SC/ST – 50% and Disabled – 3%.
h) Classification: To be covered in weaker section under priority sector advances.
i) Subsidy: Uniform @ 30% of project cost. Maxi. Rs. 7500/- SC/STs @ 50% maxi. Rs.
10,000/- for group of Swarojgaries/ SHGs @ 50% maxi. Rs. 1.25 lacs.
j) Margin: The subsidy may be treated as margin money.
k) Repayment: Mini. 5 years Maxi. 9 years.

4] Swarnajayanti Shahari Rozgar Yojana – 01st Dec’1997

a) Main objective: To provide gainful employment to the urban poor living below the
urban poverty line, unemployed or under employed.
b) Applicable: All urban and semi urban towns.
c) Eligibility norms: Unemployed youth below urban poverty line. Maxi. Education up to
9 standard. No Mini. Qualification. No age limit is prescribed under the scheme.
d) Quantum of loan: Project cost up to Rs. 50,000/- will be financed by the bank. Amount
of loan is 95% of project cost subject to ceiling of Rs. 47,500/-.
e) Target: Women – 30%, Disabled – 3% , SC/ST proportionate to strength.
f) Subsidy: Govt. will provide subsidy at 15% of the project cost subject to maxi.
Rs.7500/-. The subsidy is back ended and the lock in period is 2 years. The borrower has
to bring 5% of the project cost as margin.
g) Repayment: 3 to 7 years with moratorium of 6 to 18 months where necessary.

Agri-Clinics and Agri-Business centres:

a) Agri-Clinics and Agri- Business centres scheme has been formulated by NABARD.
b) Graduates in agriculture or any subject allied to agriculture such as Horticulture,
Sericulture, Veterinary Science, Forestry, Dairy, Poultry farming, and Fisheries etc are
eligible.
c) An individual or a group of individuals (One of them can be a management graduate out
of five individuals) is eligible for availing the loan.
d) The outer ceiling for the project cost is Rs. 10 lacs and for joint/group projects, the
ceiling is Rs. 50 lacs pro-rata.
e) Repayment will be in 5 – 10 years with moratorium of 2 years.
 f) The NABARD provides 100% refinance. NABARD also provides margin money up to
50% of margin required under soft loan scheme.
g) Collateral security and margin requirement has been waived for loans upto Rs. 5 lacs.

Credit gurantee scheme for micro and small enterprises:

a) CGTMSE introduced w.e.f. 1st June’ 2000 by Government of India and SIDBI, with
corpus of Rs. 2500 crores.
b) Eligible units: existing Micro Small Enterprises (Earlier SSI) including IT units with
credit facilities without any collateral security and or third party guarantee.
c) Credit facilities: Units sanctioned fund based and non-fund based upto Rs. 50 lacs.
d) Coverage: Not to exceed 75% of the amount of default, with maximum of Rs. 37.50 lacs.
e) Guarantee fee: One time guarantee fee 1.5% of the facility sanctioned as up-front.
f) Annual service fee: @ 0.75% on the amount of credit facility as on 31march each year
with in 60 days.
g) Exceptions: For all units sanctioned credit facility upto Rs. 2 lacs, Women entrepreneurs
and units located in J & K, NE States guarantee fees will be charged to the borrower is
0.25% only. The balance 0.50% will be borne by the bank.

Education loan:

Based on the recommendation of R.J.Kamath committee. The scheme aims at providing

financial assistance to the poor, needy and meritorious students to pursue
higher/professional/technical education.
a) Course eligible: i) All kinds of education in India ii) studies abroad: graduation, post-
graduation courses conducted by CIMA London, CPA in USA.
b) Quantum of studies: Studies in India – Maxi. Rs. 10 lacs and Studies abroad – Rs. 20 lacs.
c) Margin: Up to Rs. 4 lacs: Nil above 4 lacs, studies in India 5% and studies abroad 15%.
d) Security: No collateral security up to Rs. 7.50 lacs. Documents to be executed by the
students and parents/ guardians.
e) Rate of interest: Upto Rs. 4 lacs PLR and above Rs. 4 lacs PLR+1
f) Repayment: Course period + 1 year or 6 months after getting job which ever is earlier. The
loan to be repaid in 5 to 7 years after commencement of repayment.

Gramodyog Rojgar Scheme: (KVIC Margin money scheme)

a) Objectives: To generate employment in rural area ( population 20,000)

b) Margin money subsidy: for General 25% for the project cost upto Rs. 10 lacs and 10%
for project cost above Rs.10 lacs upto Rs. 25 lacs. Maxi. Margin money is Rs. 4 lacs. For
Weaker section 30% of the project cost up to Rs. 10 lacs and above this amount upto Rs.
25 lacs it will be 10% of remaining cost of the project. Maxi. Margin money will be
granted is upto Rs. 4.50 lacs.
c) Eligibility: Individual entrepreneurs, self help groups, institutions, Co-Op. societies,
Trusts and public limited companies owned by state and central government are eligible.
d) Contribution: 10% of the cost of project for general category and 5% in respect of
beneficiaries belonging to SC/ST/OBC and Women entrepreneurs.
 e) Bank finance: 90% of the project cost for general category and 95% of the project cost
for weaker section.

Kisan crdit card [KCC]:

KCC Scheme introduced in August 1998, to provide adequate and timely credit for the
comprehensive credit requirements of farmers under single window. The credit facility
extended will be in the nature of term loan and revolving cash credit for agriculture and allied
activities for consumption, production, and investment.
Validity is for 5 years and amount is need based. Insurance is automatic and in case of the
accidental death or permanent disability Rs. 50,000/- and for partial disability Rs. 25,000/-.
Premium is of Rs. 15/- per year and out of which Rs.10/- will be borne by the bank and Rs.
5/- borne by the beneficiary.

Laghu Udyami Credit Card [LUCC]:

SIDBI has structured a Laghu Udyami Credit Card for small business, retail traders, artisans,
professionals, self- employed persons and small industrial units.
Eligibility: existing customers will satisfactory track record with working capital limits
upto 10 lacs for last three years are eligible for the card. Limit Rs. 10 lacs and validity 3
years.

Self help group [SHG]:

a) Objectives: To evolve a supplementary credit strategy for reaching the rural poor
and to encourage banking activities, both thrift as well as credit.
b) Essential requirements: Group should have been in active existence at least for a
period of 6 months. The group may be informal or formal [registered]. The
group should have successfully undertaken savings and credit operations from its
own resources for a period of six months.
c) Size: Preferably between 10 to 20 members.
d) Revolving fund: SHG can be sanctioned revolving fund where there is bank
linkage of at least for 6 months in the ratio 1:1 or 1:4.
e) Subsidy: Minimum Rs. 5,000/- and Maxi. 10,000/-. Being equal to group
corpus. Additional subsidy of Rs. 10,000/- is available as 2nd dose for SHG
showing promise.
f) Margin: Savings are considered as margin. No requirement of collateral
securities.
g) Repayment: 3 to 10 years.
h) Refinance: 100% refinance from NABARD.

Joint liability group [JLG]:

A Joint liability group [JLG] is an informal group for the purposes of availing bank
loan either singly or through the group mechanism against a mutual guarantee.
a) Size: 4 to 10 individuals coming together.
 b) Beneficiaries: Tenant farmers, share croppers, oral lessees, farmers with small
land holdings without proper land records.
c) Refinance: 100% from NABARD.

National equity fund [NEF]:

To provide equity support to entrepreneurs, both for setting up new projects in tiny/small
enterprises sector and for expansion and modernization by existing units.
a) project cost: The project cost (including margin money and working capital) should not
exceed Rs. 50 lacs.
b) Promoters contribution: Minimum 10% of project cost.
c) Debt equity ratio: 65:35 or 1.857:1
d) Nature of assistance: Equity type assistance in the form of soft loan.
e) Amount: 25% of project cost or Rs. 10 lac per project. Whichever is lower.
f) Interest: Service charge @ 1% p.a. to be retained by the bank, interest @ 6% would be
recovered by SIDBI.
g) Repayment period: 7 years (including moratorium period of 3 years) for the soft loan.
h) Security: No security and credit risk in respect of soft loan is to be borne by SIDBI.

Rashtriya Krushi Bima Yojana (RKBY):

Government of India has introduced “Rashtriya Krushi Bima Yojana” from Rabi 1999-2000
season. It has replaced the comprehensive Crop Insurance Scheme.
a) Crops covered: All crops including food grain, cereals, pulses, and oil seeds are covered.
b) Eligibility: All farmers, including sharecroppers, and tenants growing notified crops and
availing seasonal agricultural operational loans. For non-loanee farmers optional.
c) Risk covered: Non- preventable risks such as natural fire, lighting, storms, hail storms,
cyclone, flood, inundation, landslide, drought, dry spells, pest/ diseases etc.
d) Sum insured: Extent of insurance coverage is upto the value of threshold yield of the
crop with in option to cover upto 150% of the average yield on payment of extra
premium.
e) Implementing agency: General Insurance Corporation of India.
f) Premium: During Kharif Season 2.5% to 3.5% and for Rabbi Season 1.5% to 2%.
g) Subsidy: Small and marginal farmers are eligible for 10% subsidy on premium.