WHOLESALING ROLE OF RMK
(FOR CHANNELISING CREDIT)
THE LOAN SCHEMES OF RMK - AN OVERVIEW
The loan schemes of The National Credit Fund for Women or the Rashtriya Mahila Kosh (RMK) have been designed in a sequential manner - IMOs and ultimate borrowers are expected to start with the smaller loan schemes and slowly graduate to the larger loan schemes as they gain experience and increase their own outreach.
RMK borrowers are expected to form into groups, start with their own savings, and to take the first loans from their own savings to meet their immediate consumption needs, before taking loans from RMK - groups must learn to save before they can learn to borrow - RMK has found that it is best to think in terms of a sequence in which the very poor, by borrowing for consumption, are able to gradually reduce their income vulnerability and get into a position where they can think of riskier investments in working capital, hiring of extra-family labour, and ultimately fixed capital - such a sequence helps the poorest to successfully overcome the barriers of self-exclusion, social exclusion and institutional exclusion that currently block their access to loans.
The loan schemes of RMK are as under :-
1. Loan Promotion Scheme The common features
of all loan schemes are as follows :- Eligibilty Norms 2. Three years experience in thrift & credit management (Six months for applying under
Loan Promotion Scheme) 10.
NGOs seeking loan assistance of
`
1 crore and above, at the time of application should be rated by any reputed credit-rating agency like MCRL,
CRISIL, CARE, SMERA & Acess Development Services and
should earn "Minimum Investment Grade" credit rating. If
loan is sanctioned to NGO, 50% of the rating fee, subject to a max. of
`
50,000/- would be paid by RMK. Security Margin Money Maximum Loan
Repeat Loan Rate of Interest
RMK provides smaller loan maximum upto
`
10 lakhs to promote the activity of thrift and credit
among newer and smaller but potentially capable organisation. The organisation should have minimum
6 months experience in thrift and credit to apply under this scheme.
Eligibility
:
Other
norms remain the same.
2. Main Loan Scheme
3. Gold Credit
Scheme (New)
4. Housing Loan Scheme (New)
5. Working Capital Scheme (New)
(Under review)
6. Franchisee Scheme (New)
7. Re-Finance to Urban Cooperative Banks/ Mahila Cooperative Banks
(Under review)
8. Nodal Agency Scheme (New)
1. Minimum three years of registration as a society /
Co-operative society / VO/ Sec. 25 Company (Not for profit)
3. Above 90% recovery performance during last three years
4. Satisfactory fund management & financial performance
5. Good track record in the field of Socio-economic sector
6. The office bearers of the organisation should not be elected representative of any
political party
7. The organisation should have proper system of accounting, which should have been
audited & published every year and there should not have any serious irregularities
8. The application should clearly reflect the source of funds utilised earlier for credit
9. The bylaws of the organisation should have provision for getting loans from various
funding agencies
1. RMK does not take any collateral security for sanctioning loan up to
`
1 crore.
2. If total exposure of the borrowing organisation exceeds
`
1 crore it has to provide 10% of the sanction amount as security in shape of Fixed Deposit
3. In case of State Govt.organisation - borrowing from RMK the
organisation/ department has to arrange State Govt. guarantee if their balance sheet shows
deficit/loss
The organisation applying for loan to RMK has to contribute 10% of the total credit sanctions
1.
`
50,000/- per woman beneficiary for income gererating activities
2.
`
1,00,000/- for low cost house construction
Note:- The above ceiling on individual loans are subject to extant RBI
guidelines.
Repayment
Repayable in eleven quarterly installments with an initial moratorium of
six months.
On repayment of
50% of the existing loan the borrowing organization will be eligible for applying a fresh loan/repeat loan.
1. Under all
other
Schemes
i) RMK to NGO - 8% p.a. on reducing balance
ii) NGO to SHG/Beneficiary - any rate on or above 8% p.a.
subject to maximum ceiling of 18% p.a. on reducing balance
2. Under
Franchisee
Schemes
i) RMK to Franchisee - 5% p.a. on reducing balance
ii) Franchisee to Sub-Franchisee /NGO - any rate on or
above 5% p.a. subject to maximum ceiling of
8% p.a.
on reducing balance
iii) Sub-Franchisee/NGO to SHG/Beneficiary - any rate on
or above 8% p.a. subject to maximum ceiling of 18%
p.a. on reducing balance
3. Under
Working
Capital Term
Loan
i) RMK to NGO - 8% p.a. on reducing balance
ii) NGO to SHG/Individual Entrepreneur - any rate on or
above 8% p.a. subject to maximum ceiling of 11% p.a.
on reducing balance
Organisations having minimum 3 year experience in thrift and credit activities are being considered
under this scheme.
Maximum Loan : `
6 crores (Max.`
2
crore per State per NGO)
Gold Credit Scheme
Maximum Credit Limit :
` 5 crores.Two types of facilities under this scheme may be available to NGO/MFIs as under :-
i) Partner and Non-partner NGOs of RMK may be sanctioned credit limit depending upon their track record with RMK/other funding agencies.
ii) Existing borrowers can also apply for additional loan, sanctioned amount would be added with the existing
credit limit and fresh limit will be extended for 3 years from the date of sanction.
Eligible Organisations
1. NGO/Social Organisation/Voluntary Agency.
2. Women Development Corporation.
3. Cooperative Sectors.
4. Suitable State Government Agencies such as DRDA, Federation, Municipal Corp.
5. Non Profit making companies registered under Sec.25 of the Indian Corp.Act 1956.
Repayment period : Five half yearly installments with an initial gestation period of one year.
Housing Loan Scheme
Housing Loan Scheme has been designed with a view to provide Shelter to Self Help Group members through Partner NGOs of RMK.
Maximum Credit Limit :
` 1,00,000/- per beneficiary for construction of low cost house.
Requirments
1. Receipt of allotment of land to be deposited with NGO partner. It shall not be released by NGO partners till whole of loan is repaid by the concerned allottee to the NGO partners.
2. Furnishing of personal guarantee by 2 of NGO partner officers/trustees for repayment of whole loan.
3. It should be ascertained through the officials of NGOs that the concerned plot is not disposed off by the
allottee in favour of any person without making payment to the NGO partners.
4. NGO/SHG/Actual women beneficiaries should not have received financial assistance in any from any other
source for consturction of houses.
Repayment Period
The Partner NGO has to repay back the loan within 3 years with a initial gestation period of 6 months.
Working Capital Term Loan Scheme
(Under review)
Eligible Organisation
Any Non-Profit making organisation working in the field of micro-credit, SHG promotion & development having excellent credibility, adequate infrastructure, good goverance, sound financial health and recovery management can be considered under this scheme.
a) NGOs/VO/COs/Registered SHGs.
b) Women Development Corporation/Federation/or any such Govt. organisations.
c) Non-Profit making companies registered under Section 25 of the Indian Companies Act 1956.
d) Co-operative Societies (having at least 1/3 women members in their General Body and also adequate
representative of women as its/their managing committee.
Eligibility Norms
a) The organisation should be registered for more than 3 years as on the date of application to RMK.
b) The organisation should have minimum three years experience in the field of micro-credit management,
SHG formation, SHG promotion & development.
c) It should have excellent recovery management (at least maintained 90% recovery rate in case of loan availed from other funding agencies/internal loan of SHG).
d) There should be a proper & specific clause/provision in the By-laws Memorandum of Association of the
organisation having power to borrow or to raise loan from any outside agencies.
e) The office bearer of the organisation should not be elected members of any political party.
f) The organisation should have a proper system of maintaining accounts, which should have been audited &
published every year and there should not have been any serious irregularities.
g) The organisation has to submit a detail project proposal, which should be economically and technically
viable and fulfill the social objectives/reponsibilities of the organisations.
h) The borrowing organistion should have availed a minimum loan of
`
25 lakhs or above under micro-credit scheme of RMK/SIDBI/NABARD/Commercial Banks/Other Financial Institutions.
(This condition will not be applicable for Govt. organisation).
Preferential Conditions
1. The organisation should preferably employ women members of the SHG or any poor women entrepreneur
or women getting shelter in the shelter home run by various Ministries of India, State Govts. and other Funding Agencies.
2. The NGO has to ensure `End to End' solution of the women SHG members/women entrepreneurs for smooth
operation of their activities.
Purpose of Loan
The loan under WCTL can be utilised by the borrowing organisation for the following purpose :-
1. For development of infrastructure to implement micro-credit programme like :-
- Vehicle to carry SHG product from production place to market place.
- Work shed to carry out SHG activities.
- Business outlets/shops for selling of SHG products.
- For establishment of chilling plant, small size cold store, godwn, local hat etc.
2. To carry out various Govt. program by investing fund availed from RMK by employing SHG members/
women entrepreneur.
3. Procurement of SHG product and marketing.
4. Purchase/Lease of land to carry out corp cultivation by employing SHG members.
5. To provide loan to individual women micro entrepreneur or group of women entrepreneurs to undertake
income generating activities. The organisation has to undertake the to marketing of the product of women
entrepreneurs and ensure for repayment of loan.
6. To rehabilitate sick societies, (the societies should have 1/3 women
members) sick women SHG.
7. To repay the loan availed by the societies (1/3 women members)/women SHG in higher interest rate either
from money lender or funding agencies.
8. To provide technical services to women SHG/women entrepreneur.
9. To carry out various training/capacity building/skill upgradation/education program of SHG members/small women entrepreneur.
10. For export business of the products of SHG/women entrepreneur.
11. To organise "Exhibition and sale" for marketing of products of SHG/micro entrepreneur.
12. To extend loan to women SHG/group of women entrepreneurs for the purpose mentioned in SL.1 to 11.
Maximum Amount of Loan
1. The maximum amount of loan to be provided by RMK to borrowing organisation will be Rs. 1 crore per State.
However the organisation could avail maximum loan of
` 3 crores to operate in 3 States.
2. Loan amount is to be decided on case to case basis considering the actual need of the loan, financial health/mamagement of the organisation, experience/exposure in micro-credit & creditability of the organisation.
3. The second loan will be considered only after complete repayment of first loan.
4. The working capital loan will be assessed as under :-
Amount of proposed credit proposal - available margin with the
organisation = Working Capital Term Loan (WCTL).
5. The review of WCTL will be made at the end of each financial year.
Security
1. No security will be taken for loan upto
`
1 crores.
2. In case of loan above
`
1 crores, the organisation has to arrange 25% of the sanctioned amount as security in shape of fixed deposit/mortgage of land and building.
3. All the movable assets created out of RMK's loan will be hypothecated to Rashtriya Mahila Kosh.
4. The organisation has to mortgage (equitable mortgage of immovable properties that is deposited of title deeds of immovable properties) the immovable properties which will be created out of RMK's loan.
5. In case of corporation/federation or any such State Govt.Organisation will require to be arranged State Govt. guarantee for borrowing if running in deficit/loss.
6. The immovable assets which would be created out of RMK loan would continue to be used for various activities of self help groups, in future even after the borrowing organisation repays the entire loan to
Rashtriya Mahila Kosh.
7. Where the on lending of the loan is made to the self help groups by the NGO/IMOs the assets created out of
the loan will continue to remain in the same of the self help groups.
Insurance
The borrowing organisation has to ensure adequate insurance cover of the movable properties/assets
which will be created out of RMK's loan.
Repayment
To be repaid within 36 months in 8-10 quarterly installments with an initial gestation period of 6 months.
Margin
The organisation is required to contribute a margin of 10% of the total working capital term loan to be
availed form RMK.
Disbursement
To be disbursed in two installment (50% each) depending upon satisfactory utilisation of loan.
Monitoring
Like other schemes ther will be one pre sanction monitoring and one post monitoring to be
conducted by RMK to evaluate the loan proposal/utilisation of loan.
MIS
1. Every quarter the organisation has to be submit Quarterly Performance Report/Progress report of the micro
credit program implemented by the organisation.
2. The organisation has to submit Annual Report and Audited Financial Statement every year within six month
of completion of the financial year.
3. Balance confirmation certificate after every half year of each financial year.
Franchisee Scheme
The important aspect of the niche role proposed for RMK is that of bulk financer to intermediary Micro Credit organisations, MFIs and NGOs as RMK's loaning has not been evenly spread across the country, it is proposed that responsible agencies be appointed to undertake RMK activities in a system similar to that of franchisee.
Eligibility Norms
a) The NGOs/SOs/VAs should have broad based objectives, serving the socio economic needs of the community
especially the women & weaker sections.
b) The Organisations should have necessary flexibility and professional competence, basic financial management
capacity & organisational skill to implement the lending programs.
c) The office bearers of the NGOs/SOs/VAs should not be elected members of any political party.
d) The NGOs/SOs/VAs should have a proper system of maintaining accounts which should have been audited &
published every year and there should not have been any serious irregularities.
e) The organisation should be registered for more than 3 years as on the date of application to RMK.
f) The NGO should have successful track record for a minimum period of 3 years in implementation of RMK
scheme or similar.
g) The application form should clearly reflect the source of funds utilised earlier for credit.
h) The recoveries of loan should be of high order (of at least 90% of its due.)
i) There should be an adequate infrastructure & staff to implement micro credit program.
j) There should be a proper & specific clauses in the bylaws/Memorandum of Association of the organisation
having power to borrow from any outside agency.
k) There should be an appropriate reflection in the organisation audited accounts and balance sheet in
respect of its experience in providing credit and recovery etc., audited account should reflect sound
financial image and there should be no observation of a serious nature by the auditor.
Maximum Credit Limit :
` 5 crores.
1. To be eligible for credit limit above
`
1 crore,the NGO should have availed of minimum Rs. 2 crore loan under
Micro Credit Scheme of RMK/SIDBI/NABARD/Commercial Banks/Other Financial Institutions.
2. To be eligible for credit limit upto
`
1 crore, the NGO should have availed of minimum Rs. 1 crore loan under
Micro Credit Scheme of RMK/SIDBI/NABARD/Commercial Banks/Other Financial Institutions.
Loaning Procedure
Franchisee will accept applications on behalf of the RMK, do preliminary scrutiny, conduct
pre-sanctioned study by the identified monitors or their own officers and sanction loans to
the eligible applicants as per the existing norms of RMK.
The franchisee will then sanction, disburse the amount, accept disbursement certificates,
utilization certificates etc, conduct post-sanction study and release subsequent installments
as per the existing procedures. Besides sanctions and disbursements, the franchisee will also
undertake responsibility for recovery and follow-up action of loans disbursed by them/RMK.
Note:
Organisations eligible for Franchisee Scheme / any other schemes of RMK may
avail facilities under both the schemes. While loan availed under Franchisee Scheme would be
utilized for on lending to other NGOs, loan availed under other schemes of RMK would be utilized
for on lending to the SHGs developed by the organisation exclusively.
(Please apply in the prescribed application form for the Franchisee Scheme)
Re-finance Scheme for Mahila Cooperative Banks/Urban Cooperative Banks
(Under
review)
This Scheme provides 100% re-finance assistance to Mahila Cooperative Banks & Urban Cooperative Banks which provide financial assistance to the urban/ rural poor women living below poverty line. The normal terms & conditions of RMK loans in respect of unit cost, repayment period and rate of interest are applicable in such re-finance.
Eligibility Norms
Re-finance is available only for financing women below poverty line in areas which have not been covered by any other financing agency or the women have not availed assistance under any other Government supported/subsidy scheme.
Eligible criteria
1. The bank should have been registered for at least 5 years at the time of applying for
re-finance.
2. The bank should not have been making any losses as per its audited balance sheet for
the previous 3 years.
3. There should not be any major adverse remark in the Audit Report of the bank in the
previous 3 years.
4. Recoveries of loans by the banks in the previous 3 years should be of a reasonably high
order.
Upper ceiling for re-finance
Total re-finance to any Mahila/ Urban Cooperative Bank at any given time will not be more than 4 times the "Owned Funds" of the bank as reflected in its balance sheet of the previous year.
The Nodal Agency (NOA) Scheme was originally introduced by RMK in 1986-97 with the objective
of taking the help of repaid and experienced organisations, which may not necessarily be borrowing
partners of RMK, for identifying and assisting new NGOs to eventually link-up with RMK to extend
credit facilities to women for their income generating activities.
Based on the experience gained the scheme has been revised to make it more attractive.
Salient Features :
A. Nomenclature :
a) The NGO/IMO implementing the Scheme would be designated as Nodal Agency (NOA).
b) The officer undertaking the work of Rashtriya Mahila Kosh in the Nodal Agency Scheme would be designated
as Nodal Officer (NO)
B. Eligibility
a) NGO/VO/VA should have Experience in Micro-Credit for minimum 5 years.
b) NGOs/VOs/VAs having availed loan of
`50 lakhs and above from Rashtriya Mahila Kosh would be considered.
c) NGOs/VOs/VAs should have adequate infrastructure & training capabilities for implementing RMK’s various
schemes.
d) Proposal for appointment as Nodal Agency of Rashtriya Mahila Kosh would not be considered from defaulting
NGOs/VOs/VAs.
e) NGOs/VOs/VAs should have resource Personnel having experience in micro-credit/social activities/law
/accounting etc.
f) Dynamic young persons having experience in micro-credit, accountancy, capacity building, preparation of
financial statements, annual report etc., sponsored by NGOs/VOs/VAs designated as Nodal Officer (NO) for
implementing RMK’s scheme & the organisation represented will be accorded the Status of NOA.
g) The above eligibility criteria’s may be relaxed in deserving cases by the Executive Director.
C. Duties of Nodal Agency/Nodal Officer
1. To market RMK’s various loan schemes in uncovered/marginally covered area of the State.
2. To identify potential NGOs & mobilize quality loan proposals from the NGOs who have already gained
experience in formation/ promotion of SHG, mobilization of savings, internal lending & recovery management.
3. To help in capacity building of NGOs/SHGs which would be extended financial assistance by RMK.
4. To act as coordinator of RMK for conducting meetings/seminars/workshops/trainings in the area of
operation of the Nodal Agency.
5. To monitor/follow up loans proposal of RMK.
6. To monitor the IMOs for recovery of loans given by RMK.
D. Implementation of the Scheme
1. Appointment of Nodal Officer
a) Appointment of Nodal Officer(NO) would be done by the IMO once NOA status is conferred upon it by RMK.
The Nodal Officer(NO) would be appointed by the IMO from its own staffs having following qualification and
experience.
b) Graduate.
c) Having good knowledge of accounts.
d) Experience in Micro-Credit activities like formation of SHG, mobilization of savings of the group members, internal lending, recovery management, conducting meeting of NGOs/SHGs and group members.
e) RMK’s decision would be final in selecting Nodal Officer out of the names recommended to it be the NOA.
2. Identification of Potential NGO
The Nodal Officer(NO) of the NOA would identify approximately 15 numbers of potential NGOs to avail loan
under LPS/MLS of RMK in each stream. NGO shortlisted should fulfill all eligibility criterion for availing loan from
RMK. Some of the important eligibility criteria are as under:-
• The NGO identified should have completed 3 years of Registration.
• Should have a minimum of 6 months experience in micro-credit activities like formation of SHG, Savings
mobilization, internal lending and recovery
• The NGO/VO/VA should not have deficit in its balance sheet for the last 3 years, should have sufficient
surplus/ other source to meet 10% margin requirement for the programme proposed to be implemented
& should have sound financial background.
• The NGO/VO/VA identified should have adequate trained staff & infrstructure to implement RMK's scheme.
Responsibilities of Nodal Agency
1. Preparation of Annual Action Plan for the NGOs.
2. Supervise implementation of action plan for each NGO.
3. To provide awareness regarding RMK’s scheme to the NGOs working in its area of operation.
4. To act as a resource personnel in training program to NGO/SHG.
5. Collection of application & other documents from potential NGOs.
6. Verification/scrutiny of loan proposal as per RMK’s norms/terms/rules etc.
7. To conduct Pre-Sanction study & submit Pre-Sanction Study report with specific recommendation.
8. To educate NGOs/ SHGs in their activities like formation SHG, lending process, selection of activities, recovery,
thrift, conducting meetings etc.
9. Follow-up for sanction/disbursement of loan at RMK/NGO/SHG level.
10. Verification of all original documents at NGO/SHG level.
11. Help in recovery of loans.
12. To visit each NGO & their SHG at least once in a month.
13. To submit performance report every month for release of honorarium/salary to the Nodal Officer.
14. Pre sanction study would be conducted by the Nodal Officer of the nearby Nodal Agency/Officers of Rashtriya Mahila Kosh.
15. To coordinate other activities of RMK like meetings/seminars/training camps/workshops etc. in their areas.
16. Execution of documents would be undertaken in presence of the Chief Functionary of the Nodal Agency at
Rashtriya Mahila Kosh.
Reimbursement to Nodal Officer/Nodal Agency
Through above process, each Nodal Agency will link about 15 NGOs with RMK in one
stream of six months duration. The reimbursement of expenses incurred by the Nodal Agency
will be made available from RMK as per following norms:
Training/Workshop for Nodal Officer/Chief Functionary of Nodal Agency
1. Salary/honorarium of Nodal Officer will be paid each month after receiving the performance report of
Nodal Officer duly recommended by Chief Functionary of the Nodal Agency. The honorarium would be of
`5000/- per month for six months depending upon the performance of the Nodal Officer.
2. The Nodal Officer should be exclusively utilized for implementation/follow up of scheme of RMK and recovery of loan of RMK.
3. Advance payment will be made for conducting meeting/training/seminars before 15 days. The final payment would be released after receiving all bill/receipt etc. relating to expenditure incurred by the
NGO for the above work.
