NHFDC

2. Margin Money Loan (Seed Capital)
   1. Seed Capital assistance is provided to entrepreneurs availing term loan from State Financial Corporation (SFCs) / other financial institution but not able to bring in their share of equity stipulated by the term lending institutions.
   2. Seed Capital assistance is to meet the gap in the equity stipulated by the term lending institutions as per their norm of debit equity ratio.
   3. The entrepreneur is to bring in a minimum of 20% of the equity.
   4. NHFDC may provide Seed Capital assistance upto 80% equity required to be funded by the beneficiary for the total project cost upto Rs.50 lakhs.
   5. Seed Capital assistance is free of interest but the channelising agencies will levy a service charge of 1% p.a from the beneficiaries and pay 0.5% p.a to NHFDC.
   6. Seed Capital is to be repaid within a maximum period of 7 years from the date of first disbursement, inclusive of suitable moratorium. In cases where seed Capital assistance remains unpaid beyond 7 years, the same shall be converted in to term loan at the expiry of 7^th year at an interest applicable to NHFDC term loan and shall be paid within 3 years in quarterly instalments from the date of conversion into term loan.
      The Margin Money Loan may be recovered from the beneficiary alongwith bank loan in the same proportion, which the Margin Money bears to the bank loan. Based on such recoveries the Channelising Agency or other agency will make the repayment schedule of margin money.
   7. Projects considered for Seed Capital assistance shall not be eligible for any other financial assistance from NHFDC

      Rate of Interest

      Loan Amount	Interest by NHFDC	Interest (Channelising Agency)	Total
      Loan amount less than Rs.50,000	3%	2%	5%
      Loan amount above Rs.50,000 and upto Rs.1,00,000	4%	2%	6%
      Loan amount above Rs.1,00,000 and upto 5,00,000	7%	2%	9%
      Loan amount above Rs.5,00,000	8%	2%	10%

      • For women with disability, a rebate of 2% on interest is provided.
      • A rebate of 0.5% on interest is provided for timely repayment of loan.

Allocation of Available Fund for Disbursement

1. In order to cover maximum number of beneficiaries, 75% of available fund is earmarked for those projects where NHFDC loan is below 1.0 lakh.
2. In order to ensure economic empowerment of disabled women and to ensure general balance, channelising agencies are to be given due weightage to women applicants and special efforts should be made to attract projects form women.

Sanction of Loan

1. Loan will be sanctioned by channelising agency for final disbursement to beneficiary with prior approval of NHFDC. The channelising agency will send all applications for loan duly recommended for approval of NHFDC.
2. For loan under scheme(5) production of assistive devices and scheme (6) assistance for skill & entrepreneurial development, application will be received and appraised by NHFDC directly. The loan will be sanctioned and disbursed by NHFDC.
3. Board of Directors of NHFDC will sanction all projects with loan component exceeding Rs.10 lakhs.

Recovery of Loan

1. The entire loan shall be repaid within a reasonable period but not exceeding 7 years including the moratorium period. The repayment shall be on half yearly/ quarterly/monthly basis. For agriculture and horticulture projects repayment shall be on yearly basis. The repayment period will be worked out during appraisal and sanction of scheme on the basis of income potential of the proposed project.
2. A suitable moratorium period depending on the merit and requirement of the project will be allowed.
3. A rebate of 0.5% on interest is provided for timely payment of all instalment.
4. A penal interest of 3% will be charged from channelising agency for default in timely repayment. The channelising agency will also charge panel interest of 3% from the beneficiary for default in repayment.

Security

1. Block Government guarantee is required from concerned State Government for the sanction and disbursement of loan by NHFDC to State Channelisng Agencies. In case of persistent default, the NHFDC will be at liberty to invoke the guarantees or deduct its instalments from the future projects of the concerned agency to be financed.
2. NHFDC may also accept Bank Guarantee or any other form of security acceptable to it for grant of loans.

For Application Form for Financial Assistance and Further Details Please Contact:

National Handicapped Finance and Development Corporation
(Ministry of Social Justice and Empowerment, Government of India)
Red Cross Bhavan, (opp. Mini Secretariat)
Sector – 12, Faridabad – 121 007 (Haryana)