Objective

To provide financial assistance to economically weaker and small sections of society for income-generating activities, fulfilling social responsibilities, repaying high-interest loans, promoting collective savings and responsibility, developing banking habits among such groups, and meeting the financial needs of members as decided by the group, including requirements beyond group savings.

Eligibility

Loans can be sanctioned to SHGs established and operating in Valsad, Navsari, and Dang districts. SHGs should generally consist of women; however, SHGs of elderly, transgender, and differently-abled persons may include both men and women. Only one member per family is allowed in an SHG. Group size must be minimum 10 and maximum 20 members. SHG must be active and functioning for at least 6 months.

Members should generally:

• Belong to similar economic backgrounds
• Have similar lifestyle and thinking
• Have similar sources of livelihood
• Belong to same community/caste
• Live nearby
• Have experience in similar activities
• Have a habit of saving

Group requirements

• Regular meetings must be held and minutes recorded
• Members must attend meetings regularly
• Leader and deputy leader must be selected
• Equal and regular savings by all members
• Savings should be used for internal lending
• Internal loan recovery should be regular
• Proper records of activities, savings, and lending must be maintained
• SHG must follow Panchsutra principles

Eligibility & Repayment Capacity

The group must be graded as per norms. Grading must be obtained from NRLM Coordinator or bank branch officer. Minimum 60 marks required for loan eligibility. Loan limit as per RBI/NABARD guidelines. Loan types: Term Loan or Cash Credit.

Loan Period

As per RBI/NABARD guidelines, 24 to 84 months. Cash Credit maximum 1 year, subject to renewal.

Interest Rate

As per bank’s prescribed rate. Bank has full authority to change rates at the time of sanction. Additional interest may be charged for overdue accounts.

Nominal Membership

SHG and its members must become nominal members of the bank.

Bank Account

SHG must open savings/current account in the bank.

Documents / Security

All required original documents must be submitted with proper stamp duty. All expenses borne by borrower. If loan is not withdrawn within 60 days from sanction, re-approval from Head Office is required with valid reasons.

Loan Recovery

• Term Loan: Monthly EMI
• Cash Credit: Monthly interest payable before 10th of next month

Documents Required at Loan Disbursement

1. Main loan agreement with stamp duty
2. Promissory Note
3. Letter of Continuing Security (for Cash Credit)
4. Group resolution accepting loan terms
5. Inter-se agreement among members
6. Letter of general lien and set-off
7. Loan installment letter