Multi Purpose Credit | Micro Enterprises Credit | Dairy Promotion Credit

Multi Purpose Credit

Concept

At present, unfortunately, there is no good credit system, which provides loans for emergencies, consumption or immediate needs, of the rural population, especially the poor. Due to this, many poor people are forced to take loans from the local moneylenders in case of emergency credit needs and are caught in a debt trap, from which there is no way out but to keep on borrowing more, sometimes at usurious rates of interest. To address this specific situation, the concept of Multi Purpose Credit has been introduced.

Eligibility

1. Members of Self-Help Groups, who, attend group meetings, save money on a regular basis and participate in the affairs of the group, are eligible for loans under the Multi Purpose Credit.
2. There should be a minimum of 10 and maximum of 20 members for each Group
3. However, women, having previous loans outstanding, to the group, they are attached to, are not eligible for this credit.
4. The loan quantum per group will depend on factors such as Age of Self Help Group, their savings and internal rotation of their savings etc.

Terms and Conditions

1. The loan will have to be repaid, along with interest, which will be fixed from time to time, in Equated Monthly Installments (EMIs).
2. The period of repayment (tenor) will be 6-12 months and loan repayment will start in exactly one month’s time from the date of release of loan.
3. All the group members will have to give surety.
4. SHG members should have a minimum of two (2) meetings per month.
5. Savings and subscription to SHGs will be compulsory for all members.
6. Loans will be given after grading, screening etc.