Friends, We know that for starting even a small business we required some capital. If we don’t have the money for investment, we can not go ahead with our idea.
Many a time we approach the Bank for a loan to start a new business but banks are reluctant to give credit to such businesses as the risk is high.
Here I come with a new scheme of the Government of India which purpose is to generate self employment in urban areas.
Yes, the name of the scheme is Deendayal Antyodaya Yojana- National Urban Livelihood Mission.
This scheme is under implementation in all district headquarters irrespective of population and all the cities with population of one lakh and above.
The National Urban Livelihood Mission which is a self employment program focuses on providing financial assistance through provision of interest subsidy on loans to support establishment of Individual & Group Enterprises and Self-Help Groups (SHGs) of urban poor.
Through this program the underemployed and unemployed urban poor are encouraged to set up small enterprises relating to manufacturing, service and small business for which there is considerable local demand. Local skills and local crafts are particularly encouraged through this scheme.
Anyone who wishes to start his own business can contact the local body like the Municipality office where DAY-NULM Department is there and submit your application & documents at the prescribed format.
The beneficiaries desirous of seeking financial assistance for setting up an enterprise can submit an application of intent to the concerned ULB officials on a plain paper with basic details viz: Name, Age, Contact details, Address, Aadhaar details (if any), amount of loan required, bank account number (if available), type of enterprise/ activity, category etc. The intent could also be sent by mail /post to the ULB office. The ULB shall accept such intents throughout the year.
ULB will call the beneficiaries in order of the waiting list to complete requisite documentation including filling of Loan Application Form (LAF), activity details, identity proof, address proof, bank account details etc. To verify the identity of the beneficiary, her/his Aadhar number will also be brought on record. If beneficiary does not have Aadhaar card, his/ her any other unique identification document like voters’ card, driving license etc. will be taken and s/he will be helped to obtain Aadhar card as soon as possible.
A Task Force constituted at ULB level will scrutinize the applications based on experience, skills, viability of activity, scope of the activity etc. Thereafter, the Task Force will shortlist the applications and call for an interview of the applicants before recommending or rejecting the application or call for additional information from the applicant if required.
The case duly recommended by the task force will be forwarded by the ULB to the concerned banks for further processing. Such cases recommended by the task force have to be processed by concerned banks within a time frame of 15 days. As these cases are already recommended by the task force, such cases may be rejected by banks only in exceptional circumstances
There is no minimum educational qualification required for prospective beneficiaries under this component. However where the identified activity for micro-enterprise development requires some special skills appropriate training will be provided to the beneficiaries before extending financial support.The prospective beneficiary should have attained the age of 18 Years at the time of applying for loan.
Financial assistance extends only after the prospective beneficiary has acquired required skills for running the proposed micro-enterprise. Such training may not be necessary if the beneficiary has already undergone training from a known institution, registered NGO/Voluntary Organization or trained under any government scheme provided a requisite certificate is produced. In case the beneficiary has acquired requisite skills from family occupation such cases it should be certified by the ULB before extending financial assistance.
The Maximum unit Project Cost for an individual micro-enterprise is ₹ 2,00,000 (₹ Two Lakhs).
The financial assistance available to urban poor in setting up individual and group enterprises will be in the form of Interest subsidy on the bank loans. Interest subsidy, over and above 7% rate of interest will be available on a bank loan for setting up of individual or group enterprises. The difference between 7% p.a. and the rate of interest charged by the bank will be provided to banks under DAY-NULM. Interest subsidy will be given only in case of timely repayment of loan. Suitable certification from banks will be obtained in this regard. An additional 3 percent interest subvention will be provided to all Women Self Help Groups (WSHGs) who repay their loan in time. The Interest subsidy will be subject to timely repayment of the loan (as per the loan repayment schedule) and suitable certification obtained from banks by the ULB. The additional 3% interest subvention amount will be reimbursed to the eligible WSHGs. The banks should credit the amount of 3% interest subvention to the eligible WHSGs accounts and thereafter seek the reimbursement.
No collateral required.No margin money will be taken for a loan up to ₹ 50,000 and for higher amount loans, preferably 5% will be taken as margin money.
This scheme is good for setting up a small business, however if you repay the loan timely the bank may extend the loan amount to you under other collateral free loan schemes like Pradhan Mantri Mudra Yojana.
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