Aajeevika Micro-Finance Yojana (Livelihood Microfinance Scheme)
This topic of “Aajeevika Micro-Finance Yojana (Livelihood Microfinance Scheme)” is important from the perspective of the UPSC IAS Examination, which falls under General Studies Portion.
Introduction:
- Credit-based scheme for Scheduled Caste entrepreneurs by the Ministry of Social Justice and Empowerment
- Aajeevika Micro-Finance Yojana
Ministry/Agency:
- Ministry of Social Justice and Empowerment
Objectives:
- To provide prompt and need-based microfinance to eligible Scheduled Caste persons at a reasonable interest rate through Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) to pursue small/micro business activities
Benefits:
- Financial Assistance up to 90% of Project Cost of Rs. 1,40,000 for small income-generating activities at Interest rates chargeable at 11% (10% for Women)
- Interest subvention @ 2% per annum from NSFDC on timely full repayment of dues on a yearly basis for individual borrowers
- Repayment period within 3 and ½ years, in quarterly installments from the date of each disbursement, including the moratorium period
- After repayment of earlier loan, the eligible beneficiaries can avail further loan under NSFDC schemes from NBFC-MFIs or other channelizing agencies of the NSFDC
Eligibility:
- The scheme is for entrepreneurs of the Scheduled Caste Category
Implementation Strategy:
- Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) must fulfill certain norms to be eligible for financial assistance from NSFDC, such as registration with the RBI as NBFC-MFI, following all RBI norms related to Micro Finance, having 3 years of continuous profit track record, having Gross Non-Performing Assets (NPA) less than 2%, and more.
- Interest rate for individual borrowers is 5% p.a. for Men and 4% p.a. for Women from NSFDC to NBFC-MFI, and 12% p.a. for Men and 13% p.a. for Women from NBFC-MFI to beneficiaries.
- Interest rate for Self Help Groups is 3% p.a. for Men and 2% p.a. for Women from NSFDC to NBFC-MFI, and 11% p.a. for Men and 10% p.a. for Women from NBFC-MFI to beneficiaries.
