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National Bank for Agriculture and Rural Development
Micro Credit Innovations Department
Head Ofiice : BKC, Bandra (E), Mumbai - 400 051
Tel. : +91 22 2653 0084 . Fax i +91 22 2652 8141
E-mail : mcid@nabard.org . Website : wwwnabard.org
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+91 2226530084 . H :+91 2226528141
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Ref. No. NB.MclD/
Circular No.;p63
18 Decembe
r
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t 9A9 - /NGO-MFI (Policy)/201s-16
tc{S
MCID-67/2015
2O!5
The Chief General Manager/ General Manager (OlC)
All RegionalOffices
The Director/t Director
All Training Establishments
NABARD
Dear Sir
NGO-MFl as Self Help Promotins Institution (SHPll
It has been our constant endeavour to enlarge the gamut of Self Help Promoting institutions
(SHPls) to cover all hues of micro finance practitioners as part of our strategy to increase the
outreach of the SHG-Bank Linkage Programme. The key requirements for an effective SHPI
remain strong local presence, appreciation of the needs of low income households and
institutional capacities to mobilize, nurture and handhold SHGs. The NGO-MFI with their
presence in the local rural geography, experience of working with poor and rapport with
Banks are strategically positioned and can be our partners in promotion of Self-help Groups,
their nurturing them and facilitating them with multiple credit linkages with Banks.
2. This scheme has accordingti U."n formulated to involve NGO-MF|s in the formation and
nurturing of SHGs. The operational guidelines are given in Annexure L
3. The salient features of the guidelines are as follows:-
a.
The scheme will be implemented in priority states where there is dearth of good NGOSHPls.
The rate of grant support to NGO-MF|s would be maximum Rs. 5,000/- per SHG. The
item-wise expenditure and pattern of release is given in Annexure ll.
The NGO-MFI will play the role of a facilitator in the promotion and nurturing of SHGs
for credit linkage with banks. In other words the savings account and the loan account
of the SHG will be in the books of the bank.
d. The period of assistance will be four years with provision for extension, if there is a
need, as per the extant guidelines.
e. It is expected that NGO-MF|s would also be functioning as BC of a bank and therefore
our support has been confined primarily to take care of pre-credit linkage expenditure
and audit of SHG books. The post credit lihkage support handholding/ nurturing of
SHGs is expected to be met out of the BC fee being received by them.
f. Efforts should be made by Regional Offices to bring down the rates of interest,
inclusive of the BC fee, charged by banks.to SHGs promoted under our project.
b.
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Taking Rural lndia >> Forward
g.
Expenditure incurred in this regard would be booked under "Expenditure from
FIF
A/c".
Regional Offices are advised to give due publicity to the above guidelines at appropriate
forums including discussing in SLBC/ DLCC meetings and also with network of NGOs, State
level forum for SHGs, if any.
Please acknowledge receipt.
f:
Chief General Manager
Ehcl: As above
Annex,ure
I
Guidelines for supporting NGO-MFls as Self Help Promoting Institutions (SHpts):
1.. The scheme will be implemented in priority states where there
is dearth of good NGO-
SHPls.
2.
The Eligibility criteria for selection of NGo-MFt will be same as applicable to NGoSHPIS.
3.
4'
. 5.
6.
NGo-MFls with good ground level understanding of SHG concept, working with rural
poor, good outreach and rapport with banks to be identified.
Past partners, SHPIs which had availed our RFA / Capital Support assistance with
a
good track record and now functioning as NGO-MFls to be given preference.
only those NGo-MFls who qualify for grant support as per the Institutional Appraisal
of ROs would be eligible.
The NGo-MFl are expected to play the role of a facilitator in promotion and nurturing
of SHGs for credit linkage with banks. In other words the savings account and the loan
account of the SHG will be held in the books of the bank.
7. Grant support up to
Rs.5,000/- per sHG may be considered. The item-wise
expenditure and pattern of release will be as per Annexure il.
8. The period of assistance will be upto 4 years with provision for extension as per the
extant guidelines.
9' lt is expected that NGOs-MFls would also be functioning as BC of a bank and therefore
our support has been confined primarily to take care of pre-credit linkage expenditure
and audit of SHG books. The post credit linkage support handholding/ nurturing of
sHGs is expected to be met out of the BC fee being received by them.
10. Efforts should be made,to.bring down the rates of interest, inclusive of the
BC fee,
charged by banks to SHGs promoted under our project.
11. Expenditure incurred in this regard would be booked under "Expenditure
from FIF
A/c".
\
Annexure ll
Item-wise gra nt assista nce:
Items for grant assistance
Sr.
Max permissible
grant per SHG
( Amount in Rs. )
No.
1,
Pre-formation activities and training to staff.
2
Training to Group Lebders, SHG members
3
Monitoring and developing of MIS
700
4
Supply of Cash Box and books of accounts to
700
300
1500
SHGs
/
5
Attending Group Meeting
Support to
800
5
Animators / Bank facilitation
Refresher trainings on accounting and audit of
SHG books etc.
1000
Total
5000
The pattern of release of
SlNo
grrnt assistance:
Particulars
Percentage of
sanctioned
amount
1
Acceptance of terms and conditions of sanction
2
Groups being saving linked
/ opening
of
SB
10
20
accounts
3
On first credit Linkage with banks
30
5
On second credit linkage with bank
20
4
On annual audit of SHG books*
20
Total
100
* 5Toto be released after each year's audit. lt may not follow the chronological order
above.
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