Chief Minister's Micro Finance Initiative

Funding Pattern and Subsidy Support

Financing through Banks

• All banks in the State of Nagaland will be eligible as lending institutions in the Scheme.

• All participating banks must develop product codes for the Scheme.

• The quantum of loan, subsidy, and borrower's margin will be as follows:

Sl. No. Particulars Share in Project Cost

1 Beneficiary Minimum 10%

2 Bank Finance Maximum 60%

3 Back-ended Subsidy from Government of Nagaland Fixed at 30%

In addition to the above, the State Government will provide interest subvention of an additional 4% for fresh KCC loans and credit linkage to NSRLM SHGs, over and above the 3% provided by GOI. Loans approved under CMMFI shall not be treated as KCC for the purpose of interest subvention as a 6-month moratorium period is already there.

In case of KCC loan and agriculture infrastructure loans, proposed for subsidy under CMMFI, for loans above 1.6 Lakh, respective VDBs may undertake to provide Credit Guarantee Fund from their fixed deposits. In case of NSRLM SHGs, respective Cluster/Block Level Federations may undertake to provide Credit Guarantee Fund from their Community Investment Support Fund. Bank loan for KCC will be determined as per the scale of finance published by NABARD. Bank loan to NSRLM SHGs will be determined as per NRLM/NSRLM guidelines depending on the corpus fund and savings of the SHGs. The applicant may furnish a personal guarantee or guarantee of a salaried employee in lieu of VDB guarantee.

In case of Micro and Small Enterprise loans, loans are mandated to be collateral-free up to 10 Lakh for individual borrowers. Beneficiary seeking loans up to 10 Lakh and above will have the option to seek collateral-free loan through the CGTMSE Scheme, wherein the Government of Nagaland shall pay the Annual Guarantee Fee of 0.37% on behalf of the beneficiary.

The commitment from the State Government shall be in the form of:

Additional Interest Subvention of 4% on KCC loans.

Subsidy of 30% on Term Loans for Agricultural-Allied activities, Entrepreneurship, and other activities.

Coverage of Annual Guarantee Fee of 0.37% for small and medium enterprise loans under the subsidy category or loans up to 50 lakhs for non-subsidy category.

Payment of Interest during the Moratorium. The moratorium shall be uniform across all projects for a period of 6 months.

The tenure of the loan will be fixed for a maximum of 5 years, extendable to 7 years or more at the discretion of the banks.

Two years lock-in period before foreclosure of the loan to prevent the loan from being claimed only for the purpose of the subsidy component rather than actual entrepreneurship/livelihood projects.

All livestock (cows, sheep, chickens, pigs, etc.) loans shall be mandatory to obtain livestock insurance, and this component shall be part of the DPR and loan approval process, wherever insurance coverage is available.

Eligible Beneficiaries

A. Individual Farmers and Entrepreneurs: Individuals who are keen to invest in Agri-allied activities, Entrepreneurs, and other activities for a better livelihood would be assisted as per the norms of the Scheme.

Eligibility Criteria

They should not be defaulters to any bank.

They should not be serving Government Employees.

They should have sufficient land for land-based activity in the name of the borrower or on lease with a remaining period of the lease agreement not less than the tenure of the loan. In the case of non-cadastral areas, a document issued by the concerned Village Council and countersigned by the area administrative officer certifying the land-holding shall be sufficient for the purpose.

They should generally have adequate experience or training in respect of the activity for which they seek assistance.

B. Self Help Groups (SHGs): SHGs have been a key element of credit extension to the poor and small entrepreneurs. They undertake activities in a group mode which benefit the community as well as provide meaningful livelihood opportunities to the members. SHGs have been supported under various programs being implemented in the State. The Government of Nagaland endeavors to further support the SHGs through this scheme to expand the scope of economic activities that can supplement the needs, especially of the rural household.

Eligibility Criteria

All SHGs (including non-NSRLM SHGs) fulfilling the Panchasutra concept i.e., holding regular meetings; regular savings; regular inter-loaning; timely repayment; and up-to-date books of accounts shall be considered for assistance under the Scheme.

SHGs would be financed, primarily, by the bank where they have their Bank Account.

SHGs shall be graded on the basis of the “Panchsutra” concept.

The group members should have sufficient land, either self-owned or on lease, to carry out land-based activities.

C. Farmer Producer Organizations (FPOs): Farmer Producer Organizations are Farmers’ Collectives with characteristics of legal personality and limited liability similar to a company, can attract investments, modern technology, catalyze aggregating and marketing of bulk produce to fetch better remuneration and in turn lead to improved means of production. Although very few in number at present, in the state, they present huge opportunities and have been considered as eligible entities under the scheme.

Eligibility Criteria

The FPO should have been registered and should have at least three years of Audited Balance Sheet.

Board members of FPOs and all members should be non-defaulters to any bank/financial institutions.

The FPO should not be in losses.

The FPO should have at least 100 shareholders and a minimum paid-up capital of Rs 1,00,000.

The activity should be relevant to the prime activity of the FPO.

The maximum borrowing of the FPO should be restricted to 2/3rd of their paid-up share capital or as per the borrowing power of their bye-laws.

At least 80% members should be participating in and benefitted by the FPO either through supply of input or aggregation of produce and marketing.

Eligible Lending Institutions

As the subsidy is credit-linked, the projects will be eligible for subsidy only if financed by either a commercial bank (Public & Private Sector Banks), the Nagaland Rural Bank, or the Nagaland State Cooperative Bank.

Online

Step 1: Eligible applicants must apply online through the Credit Portal of Nagaland.

Step 2: On the homepage, click on the ‘Register’ button. Select the type of beneficiary, enter the legal name, and set a password. Register here

Step 3: After successful registration, log in using the registered email or mobile number along with the password. Login here

Step 4: Fill out the application form, upload all mandatory documents, and submit the form.

Detailed Project Report

Proof of Address

Aadhaar Card

PAN Card (PAN can be procured post application and can be submitted later)

3 Passport size photos (SHGs & FPOs have to submit 3 passport size photos of any two of the following:- 1. Treasurer 2. Chairman 3. Secretary)

Bank Account Details (If it exists, otherwise have to open new account with the bank approving the loan)

Udhyam Registration (For MSME projects and not for core Agri projects)

Land Holding certificate (only for Piggery Loans and other Livestock loans excluding Mithun rearing)

License (For trade/business establishments):

For Urban Areas: Business trade license in case of business establishment in urban areas.

For Rural Areas: NOC from village council if business is under rural areas