Beneficiaries would submit the loan applications in the prescribed format to SCA

The beneficiary should fulfill the eligibility criteria of NHFDC for financial assistance as on the date of making application for repeat financial assistance.

The beneficiary should have a good repayment track record; i.e. he should not have defaulted the repayment of dues in respect of the earlier loan by a period of 3 months or more at any point of time.

The repeated financial assistance may be made available to the same beneficiary and for the same project/ unit for the purpose of expansion / diversification for the project / unit/ scale of operations of an activity, as the case may be.

The loan for the said purposes may be sanctioned;

the sanctioning limits upto which sanctioning authority has been delegated to the SCA by NHFDC from time to time; and

the sanction limits (sectorwise financial limits) laid down/ specified in the lending policy of the company from time to time.

by NHFDC upto such amount so that the aggregate of loan(s) sanctioned, whether as repeated financial assistance or otherwise, in respect of an individual beneficiary, and / or an individual unit/project does not exceed the limit stated at a(ii) above.

Here it is clarified that for extending the repeat loan it is not necessary that the loan given earlier should have been completely repaid. The point to be examined is the repayment history and  current status against the dues.

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 period 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. Any default will attract penal interest as per para 18.

The SCA is expected to contribute 5%for project above Rs. 50,000/- as their share of the project (except education loan scheme for which refer Annexure-I.)

(except education loan scheme)

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 be beneficiaries.

SCAs shall have the authority to extend the moratorium period beyond three months, but one year (maximum) in respect of projects, the sanctioning authority of which have been delegated to them i.e. at present projects the unit cost of which does not exceed Rs. 1.00 lakh.

However, the aforesaid authority of State Channelising Agencies to increase the Moratorium period upto one year as above could be exercised subject to the condition that such exercise of authority should be immediately informed to NHFDC with the detailed reasons for the same. It should also be reflected in the detailed list submitted with the utilization certificate.

The SCAs are required to use this authority judiciously in such cases only where the gestation period of the project is long. The CMD, NHFDC may withdraw the authority delegated to SCAs as above for any or all SCAs on his being satisfied about the improper exercise of the authority by any SCA in particular or by SCAs in general. The CND, NHFDC will also be authorised to withdraw the longer moratorium given in any particular case or cases. So whenever moratorium period has been extended by the SCA, the authority of CMD, NFDC to effect change in the moratorium period should be suitably incorporated  in the agreement between the beneficiary and the SCA.

The loan other than the education loan scheme and micro credit scheme is required to be repaid in quarterly instalments upto a maximum period of 10 years after the expiry of moratorium period. Shorter repayment is also allowed. SCAs are advised to normally keep the repayment period to 5 years or less, for all loans below Rs. 1.00 lakh.

For loans under micro credit scheme, the repayment period should be 36 months or less including moratorium period.

The funds are provide 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 default, 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 grant of loans.

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.

NHFDC shall reimburse expenses for publicity/awareness creation programmes of SCAs for NHFDC schemes upto an amount of Rs. 50,000/- (Rupees Fifty Thousand only) per year or 0.25% of the amount disbursed by the SCAa in the immediately proceeding financial year, whichever is higher.

For loans above Rs. 1.0 lakh forms are provide for free distribution to the beneficiaries by NHFDC.  So far all loans above Rs. 1.0 lakh, SCA may use these forms or get it printed in the same performa. in respect of loan application for projects upto Rs. 1.0 lakh, the SCA may devise and print own application forms.