POLICY OF NATIONAL HANDICAPPED FINANCE AND DEVELOPMENT
Implementing Agency -
National Handicapped Finance and
Development Corporation (NHFDC) was set up by the Ministry of Social Justice
& Empowerment, Government of India in January 1997. The company is
registered under section 25 of the Companies Act, 1956 as a company not for
profit. It is wholly owned by Government of India and has an authorised capital
of Rs. 400 crore. The company is managed by Board of Directors nominated by
Government of India.
NHFDC function as an apex
institution for channelising the fund to the persons with disabilities through
the State Channelising Agencies (SCAs) nominated by the State Government(s) or
through Non Government Organisations (under Micro Financing Scheme).
Promote economic development activities and self-employment ventures for
the benefit of persons with disability.
Extend loan to
the persons with disability for upgradation of their entrepreneural skill for
proper and efficient management of self-employment ventures.
Extend loan to
persons with disability for pursuing professional/technical education leading to
self-employed individual with disability in marketing their furnished
Scope of this lending
policy is limited to -
- i) Financing
income generating activities for the persons with 40% or more
- disability through the SCAs.
- ii) To provide micro credit
finance to the target group through Non Government
- Organisations (NGOs).
- iii) To Provide
grant to the SCAs for entrepreneural and skill development
iv) To provide grant to the SCA for computerisation of the activity of
4. Eligibility Criteria
Any disabled person who fulfills the
following criteria is eligible to apply for financial assistance –
a) Any Indian Citizen with 40% or more disability.
Age between 18 and 55 years.
Annual income below Rs. 1,00,000/- for urban areas and Rs. 80,000/- p.a for
Relevant educational / technical / vocational qualification/ experience and
5. Rate of Interest
||To be Paid by
||To Be Paid by
Beneficiaries to SCAs|
|i) Upto Rs.
|ii) Above Rs.
50,000 and upto Rs. 5.0 lakh
|iii) Above Rs.
A rebate of 1% on interest is given
to women with disabilities.
7. Schemes of NHFDC
The corporation can assist a wide
range of income generating activities for disabled persons. These are
a) For setting up small
business in Service/Trading sector : Loan up to Rs. 1.0 lakh for sales trading
activity and Rs. 3.0 lakh for service sector activity
- Loan assistance provided
for self-employment of disabled persons in service sector or for trading
activity. The small business, project or activity, for which financial
assistance has been sought, will have to be operated by the disabled person
himself and employing at least 15% disabled persons in his venture.
agricultural Activities : Loan upto Rs. 5.0 lakh.
assistance is provided to disabled persons for agricultural production,
irrigation, horticulture, sericulture, purchase of agricultural
machinery/equipment for agricultural service, marketing of agriculture products
For purchase of
vehicle for commercial hiring – Loan upto Rs. 5.0 lakh
vehicle including auto rikshaw for commercial hiring purpose
d) For self-employment
amongst persons with mental Retardation, Cerebral Palsy and Autism : Loan upto
Rs. 3.0 lakh.
- Persons with mental
retardation, cerebral palsy or autism may not be eligible to seek loan and enter
into a legal contract. In such cases following categories of persons are
eligible for financial assistance from NHFDC on behalf of mentally retarded
i) Parents of dependant mentally disabled person
ii) Spouse of dependant mentally disabled person
e) For setting up small
industries unit : Loan upto Rs. 5.0 lakh.
- Loan assistance is
provided to disabled persons for manufacturing, fabrication and production. The
disabled person will be the owner/chief executive of the company and will employ
at least 15% disabled persons.
f) For technical
education/training – Loan limit as per requirement.
- Criteria and norms for
sanction of educational loan will be the same as followed by State Bank of
g) Micro Financing Scheme
The Micro Financing Scheme is
presently implemented by NGO working in the social sector preferably for the
disabled persons and should have adequate experience for undertaking programmes
for economic and social rehabilitation of economically weaker section of the
i) Quantum of loan to NGO
is Rs. 5.0 lakh (Rupees Five Lakh only) and NGO can further disburse the loan
upto Rs. 15,000/- (Rupees Fifteen Thousand only) to each disabled
An interest rate
of 2% is charged from the NGO and NGO can further charge upto 5% interest from
is 24 months.
must fulfil the eligibility criteria as prescribed for beneficiaries under other
A grant of Rs.
10,000/- (Rupees Ten Thousand only) is given to the NGOs for promoting,
implementing and launching Micro Financing Scheme.
vi) Under the scheme, the
application by NGO is to be forwarded to NHFDC directly.
h) Scheme for Parents
Association for the Mentally Retarded Persons – Loan upto Rs. 5.0
- Financial assistance is
provided to Parents Association for the Mentally Retarded Persons to set up an
income generating activity for the benefit of mentally retarded persons. The
nature of income generating activity will be such that it involves the mentally
retarded persons directly and income will be contributed among the mentally
i) Under the scheme, the
application by the association is to be forwarded to NHFDC directly.
ii) Quantum of loan, rate
of interest, repayment period etc. will remain same as for schemes implemented
through the SCA.
i) Assistance for Skills
and Entrepreneurial Development Programmes
- Financial assistance in
the form of loan is provided to the channelising agencies for imparting skills
and entrepreneurial development training to disabled persons.
8. Procedure of Sanction and
i) The power to sanction
loan to the beneficiary is delegated to SCA upto a project cost of Rs. 1.0
ii) Beneficiaries would
submit the loan applications in the prescribed format to SCA.
iii) The SCA would
scrutinise and sanction loan in accordance with the guidelines for sanction of
loan. Broadly, the guideline for sanction provide that the SCA should
constitute a project approval committee chaired by the MD of the SCA. It should
preferably have a specialist from disability sector and one reputed NGO working
in disability sector.
iv) The SCA would ensure
that the applicants, who are sanctioned loan, fulfil the eligibility criteria as
per the guidelines for funding.
v) The SCA would issue
sanction order, which will contain the name of beneficiary, name of income
generating activity, the amount of loan sanctioned and the main terms and
conditions of the sanction. The terms and conditions of sanction would be the
same as contained in the sanction letter presently being issued by
vi) After the sanction, the
SCA would communicate the sanction to NHFDC along with particulars of the
beneficiaries for incorporation in the beneficiary-database of NHFDC.
vii) The SCA would raise a
demand to NHFDC for release of fund for further disbursement to
viii) The fund would be
released by NHFDC to SCAs after considering the status of government
guarantee/suitable security, General Loan Agreement, sanction order, recovery
& utilisation, beneficiary data etc.
9. Utilisation of loan
The fund released by NHFDC is to be
utilised by the SCA within 90 days from the date of issue of demand draft. 7
days grace period is allowed towards transition period of demand draft. During
this prriod of 90 days, an interest of 2% per annum would be charged. However,
applicable interest rate would be charged from the date of disbursement of loan
to the beneficiary. In case, the loan amount is not utilised within 90 days,
the undisbursed amount is to be returned to NHFDC immediately.
10. Share of SCAs
The SCA is expected to contribute 5%
for project above Rs. 50,000/- as their share of the project.
11. Promoter’s Contribution
i) Upto Rs. 1.0
lakh - Nil
- ii) Above Rs.
1.0 lakh and - 5%
- upto Rs. 5.0
12. NHFDC share of the
Project cost -
i) Upto Rs.
50,000/- - 100%
- ii) Above Rs. 50,000/-
and - 95%
- upto Rs. 1.0
- iii) Above Rs.
1.0 lakh and - 90%
upto Rs. 5.0 lakh
13. Moratorium Period
A moratorium of three months will be
available to the SCAs in repayment of principal after the expiry of utilisation
period. The SCAs are expected to provide the similar moratorium to the
beneficiaries. The longer moratorium period may be considered in specific cases
depending upon the nature of the project.
Repayment Period -
The loan is required to be repaid in
quarterly instalments over a period of 10 years after the expiry of moratorium
The funds are provided to the
Channelising Agencies nominated by respective State Governments against the
State Government Guarantee. In exceptional circumstances, NHFDC may consider
financing the Channelising Agencies nominated by it (NHFDC) on the guarantee of
the said agency with the approval of the Board. In case of persistent defalt,
the NHFDC will be at liberty to invoke the guarantee or deduct its instalments
from the future projects of the concerned agency to be financed. NHFDC may also
accept Bank Guarantee or any other form of security acceptable to it for grant
16. Liquidated Damages on
Defaults in the repayment of NHFDC
dues (principal as well as interest) shall attract liquidated damages @ 2% p.a.
over and above the normal rates of interest.
In case the loan is not disbursed to
the beneficiary by the SCA within 90 days of receiving the fund from NHFDC, the
interest on un-utilised amount will be @ 3% p.a. over and above the normal rate
of interest on term loan for next 90 days. Thereafter, the un-disbursed amount
will be refunded by SCA to NHFDC and additional penal interest of 2% will be
charged till the date of refund.