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1.1 SHG Loan
1.1.1 Eligibility for the Loan
- The loan is available only for SHG Members.
- Group shall be registered with BWDA by paying the registration fee that is fixed
from time to time.
- To become eligible to take loan from the BFL:
o In case of female groups, the group should complete at
least three months of functioning (since the formation) and should have
met at least 12 times. (i.e. once in a week,
for past three months).
o In case of male groups, the group should complete at least
six months of functioning (since the formation) and should have met
regularly, as decided upon by the group, in
the past six months.
- Group should have a minimum savings of Rs.3,000/- (Rupees three thousand). Each
member should have saved at least a minimum of Rs.10 per week regularly.
- Group should have rotated their savings as internal loan to its members at least
twice and members must have repaid the loans regularly.
- The group should undergo group rating. Groups rated as D are not eligible for the
loan.
- Suggestions, in writing, may be given for improvement by the Branch. A subsequent
rating is done, after at least 3 months, allowing time for the group to improve
its performance.
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1.1.2 Product Details
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SHG Loan
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Loan Amount (Product)
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Loan Cycle
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Loan Limit
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Loan Tenure
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per Member
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per SHG
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1st Cycle |
maximum Rs.10,000 |
Rs.1,00,000
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15 monthly instalments |
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2nd Cycle |
maximum Rs.12,000 |
20 times to the savings or Rs.2,00,000 (which ever is less) |
20 monthly instalments |
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3rd Cycle |
maximum Rs.15,000 |
20 times to the savings or Rs.3,00,000 (which ever is less) |
24 monthly instalments
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4th Cycle |
maximum Rs.20,000 |
20 times to the savings or Rs.4,00,000 (which ever is less) |
30 monthly instalments |
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5th Cycle |
maximum Rs.25,000 |
20 times to the savings or Rs.5,00,000 (which ever is less) |
36 monthly instalments |
Note:
Loans will be given in multiples of thousands only.
Loan amount will be sanctioned based on the members
income generation activity and repayment capacity.
(Guidelines for sanctioning this loan
are described in this Manual as an Annexure).
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Price
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Interest Rate |
16% per annum on a declining basis |
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Processing Fee |
1% of loan amount collected upfront |
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Death Relief Fund |
1% of loan amount collected upfront |
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Penalty |
1% per month on the due amount (instalment) for the number of days for which the
amount was due |
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Process
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SHG requests the BFL for the loan
Internal Assistant rates the group and develops Individual Outstanding
Report for the group at the
suggestion from the Branch Manager
The Cluster Coordinator and the Field Monitor recommends the
group for taking loan from BFL
Loan Sanctioned by the Branch Manager or other appropriate sanctioning
authority
Loan documentation prepared by the Accountant
Loan Disbursement to the group at Branch Office.
Details of the processes discussed later in this manual
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Physical Evidence
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Group Rating Sheet
Individual Outstanding Report
Loan Application
Loan Agreement Group and Individual Members
Promissory Note Group and Individual (borrower wise)
Payment Voucher
Receipts fees, loan repayment
Loan Disbursement Sheet
Loan Card
Repayment Schedule
Loan Ledger
MIS Reports
KYC proof, including age proof
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People Involved
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SHG Members (borrowers)
Animator and Representative
Cluster Coordinator
Field Monitor
Branch Manager
Internal Assistant
Senior Manager (if required)
Accountant
Cashier
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Promotion
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Group Training
Oral communication by Cluster Coordinators and other BFL staff
Leaflets and product brochures
PLF and BLCC meetings
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Place
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Loan Origination in SHG meeting in the field
Group Rating in the SHG meeting in the field
Loan Sanction at the Branch Office
Loan Disbursement at the Branch Office
Loan Repayment by the members during SHG meeting - in the field
Loan Repayment by SHG at the Branch Office
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Positioning
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Easy loan at lower interest rate to the SHG members
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1.2 Individual Loan
1.2.1 Eligibility for the Loan
- Loans are given for
o Micro Entrepreneur owning a shop, business, micro and tiny industrial
enterprises, or any Income Generating Programme (eg. dairy)
and interested in starting or expanding the business
(including additional/new stock) with the loan.
o Asset acquisition eg. land, vehicle.
o Other purposes like housing, marriage, education
- Applicant should be a permanent resident within the target area of the branch.
- The applicant should be between 18 and 60 years of age.
- He/She should be holding a valid residence proof, identity proof and age proof.
- Applicant, or Guarantor proposed by the applicant, should hold property with proper
title to affect a valid mortgage.
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1.2.2 Product Details |
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Individual Loan |
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Loan Amount (Product) |
Rs.10,000 to Rs.5,00,000 - based on the need and repayment capacity
of the client.
No need of mortgage in case of loan up to Rs.20,000 can be
given based on five Post Dated Cheques (PDCs)
Repayment Term: 10 months to 60 months, depending upon the activity
Loans will be given in multiples of thousands only.
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Price |
Interest Rate |
18% per annum on a declining basis |
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Processing Fee
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1% of loan amount collected upfront, if registered mortgage in the name of BFL
represented by its authorised officials. 2% of loan amount collected upfront, if
unregistered mortgage
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Death Relief Fund
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1% of loan amount collected for loans without registered mortgage If loan amount
is above Rs.25,000, the Death Relief Fund is optional.
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Penalty
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1% per month on the due amount (instalment) for the number of days for which the
amount was due
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Process
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Discussed in detail later in this manual
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Physical Evidence
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1. Loan Application
2. KYC proof, including age proof
3. SHG Resolution/Reference, if applicable
4. Loan Recommendation - CC/FM/BM/SM/AGM, as applicable
5. Payment Voucher
6. Borrower Consent Letter
7. Promissory Note
8. Repayment Schedule
9. Articles of Agreement
10. Guarantors Consent Letter
11. Guarantee Agreement
12. Mortgage Offer Letter (all original documents of title deeds should be deposited)
a) Parental Document
b) Sale / Gift / Partition Deed
c) Encumbrance certificate for 15 years.
d) House/Land Tax Receipt
e) Valuation Report
f) Legal Opinion
13. Cheque leaves duly signed
14. Receipts fees, loan repayment
15. Loan Card
16. Loan Ledger
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People Involved
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1. Cluster Coordinator, if necessary
2. Field Monitor
3. Branch Manager (inspection report up to Rs.50,000)
4. Senior Manager (inspection report up to Rs.2,00,000)
5. Assistant General Manager (inspection report above Rs.2,00,000)
6. General Manager (Credit)
7. Managing Director
8. Credit Committee
9. Accountant
10. Cashier
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Promotion
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Oral communication by Field Monitor and other BFL staff
Leaflets and product brochures
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Place
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1. Loan Origination at Applicants house or business place in the field
2. Loan appraisal and recommendations at Branch Office
3. Loan Sanction at Head Office
4. Loan Disbursement at Branch Office
5. Loan repayment by the loanee at Branch Office
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Positioning
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Higher loan amount at low interest rate.
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