Nabard

Swarojgar Credit Card Scheme

Overview

Swarojgar Credit Card Scheme (SCC Scheme) was introduced in September 2003 consequent upon the announcement made by Hon'ble Prime Minister in his Independent Day Speech on 15 August 2003.

Objective

• SCC Scheme aims at providing adequate and timely credit i.e. working capital or block capital or both to small artisans, handloom weavers, service sector personnel, fishermen, self employed persons, rickshaw owners, other micro-entrepreneures, SHGs, etc., from the banking system in a flexible, hassle free and cost effective manner.
• Borrowers in urban areas can also be covered under SCC Scheme. Small business covered under priority sector is also eligible under SCC Scheme.
• Any scheme/project that is income generating/ employment generating may be covered under the scheme. The facility may also include a reasonable component for consumption needs.
• Farm sector activities like fisheries, dairy, etc., can also be covered under the scheme. Generally such of the self-employment activities which have regular turn-over/income stream on short-interval basis can be covered under SCC scheme.

SCC is a credit delivery mode and not a purpose. Coverage of SCC will not make a unit ineligible for subsidy. Banks can issue SCCs to target borrowers of SCC scheme for disbursing credit under any scheme whether it is covered under subsidy or not.

(1) Nature of final accommodation (2) Quantum of limit

(3) Renewal of SCC limits (4) Interest on credit balance

(5) Validity (6) Issue of cards

(7) Operation of the scheme (8) Insurance

(9) Security/Margin/Rate of interest/Prudential norms (10) NABARD refinance

(11) Monitoring (12) Publicity on SCC Scheme

SCC to SHGs

Self Help Groups (SHGs) can also be issued SCC and members will be liable jointly and severally for repayment. As the Groups mature, some members may graduate to entrepreneurs and start their own micro- enterprises with or without the support of the SHGs. In such cases, SCC may be issued to members in individual capacity.

Nature of financial accommodation

The credit facility extended under the Scheme is in the nature of a composite loan including term loan / cash credit or both.

Quantum of limit

Upto Rs. 25,000/ per borrower as composite loan. This is indicative. Banks may consider higher limits on the merits of the case. A component for consumption credit could be built in keeping in view the value of the family labour in the productive activity. The total limit would have a relationship with the projected net earning and the repayment capacity of the borrower

Renewal of SCC limits

Limits will be renewed annually based on the amount credited to the cash credit account /repayments.

Interest on credit balance

Interest as applicable to SB A/c may be paid to the borrowers on the credit balance under the account.

Validity

SCC is normally valid for 5 years subject to satisfactory operation of the account and renewed on a yearly basis through simple review process.

Issue of cards

The beneficiaries under the scheme will be issued with a laminated credit card and a passbook. This will serve as an identity card and facilitate recording of the transactions on an ongoing basis. Banks may modify the format keeping in view the relevant data/ information required. A passport size photograph of the holder will be affixed on the card in the space provided for .The card holder would be required to produce the card and the pass book for operations in the account. As far as possible cluster approach may be followed in implementing the scheme. In case smart cards are issued, fees towards issue of card/processing may not exceed Rs 50/- per card.

Operation of the scheme

The banks may at their discretion permit operations through the designated branches, taking into account the convenience of the clientele. Opening of SB A/c should not be a precondition for issue of SCC.

Insurance

Beneficiaries under the scheme would automatically be covered under the group insurance scheme and the premium would be shared by the bank and the borrower equally. Each bank may negotiate the terms of insurance with a company of its choice on a national or regional basis. Further, as advised by General Insurers’ (Public Sector) Association of India (GIPSA), it would be advisable for the banks to take up the matter of Personal Accident Insurance linked with SCC scheme individually with the Insurance Companies. Since many banks have tie-ups for bancassurance agreement with General Insurance Companies they may decide to include SCC scheme also under their tie-ups.

Security/Margin/Rate of interest /Prudential norms

Security, Margin, Rate of interest and Prudential norms are applicable as per RBI/NABARD norms. The interest rate would not exceed that for comparable farm loans. However banks may follow RBI instructions in this regard. Interest linked incentives may be given for timely repayment. Women borrowers may be given preference. Joint liability groups could be encouraged as a collateral substitute.

NABARD refinance

NABARD refinance will be provided for advances under SCC Scheme to eligible banks against their lendings to the borrowers in rural areas as per norms under the Enterprise Loan Scheme.

Monitoring

NABARD has been nominated by Govt. of India as the nodal agency for monitoring the scheme. Banks are required to report monthly progress to concerned Regional Offices of NABARD to facilitates monitoring.

Publicity on SCC Scheme

NABARD has published brochures on SCC scheme in English, Hindi and various regional languages. Regional Offices of NABARD conduct familiarisation programmes for bankers on the scheme.

1. What is RIF?

Rural Innovation Fund (RIF) is a fund designed to support innovative, risk friendly, unconventional experiments in Farm, Non-Farm and micro-Finance sectors that would have the potential to promote livelihood opportunities and employment in rural areas.

2. What are the guiding principles for operations of RIF?

The guiding principles for the operations of RIF are broadly as indicated below:

• The activities must have the rural poor in their focus and must be innovative, experimental and demonstrative in nature leading to explicability and commercial viability
• The activities funded may involve development of new products, processes, prototypes, technology, patenting and extension support.

Appropriate action research and studies contributing to better understanding of rural development issues, policy and process implementation may be undertaken.

3. What type of projects can be supported under RIF?

• All innovations and related activities in the Farm, Rural Non-Farm and Micro-Finance sectors can have access to the RIF. Assistance from RIF will be available for all activities which are in keeping with the guiding principles of RIF and specifically those which.
• Provide technology and skill up gradation, inputs supply and market support leading to promotion of viable enterprises, sustainable employment, infrastructure development, improved flow and access of credit to rural entrepreneurs.
• Undertake innovations so as to improve efficiency of credit delivery and other support services to the rural resource poor.

Patenting innovations leading to commercialisation of the idea through licensing or otherwise.

(i) These would include innovative proposals which aim at increasing productivity and profitability of operations of the farmers, artisans, handicraft persons and rural people in general, projects that help in reducing drudgery, improving access to market, projects that help better sanitation, health and hygienic conditions and environment in rural areas.

(ii) Proposals, which improve rural credit, outreach.

(iii) Proposals, which help in creating sustainable employment opportunities in rural India.

(iv) Proposals, which improve, farm practices, and help in conserving the land fertility.

(v) Research studies for documenting the innovations already taking place in rural areas and examining issues concerned with rural cottage & village industries /farm sector / farming practices.

4. Preferred Sectors

The following areas/ sectors will be considered for support from the Fund, to start with:
Dry land / rain fed farming, Innovative rainwater harvesting for rural dwellings, Rural energy from biomass/ agricultural wastes, Techniques for increasing the value of crop residues and non-crop bio mass, Community regulation of distribution and use of water and energy, Storage devices for agricultural and rural products, Innovative methods of managing Common Property Resources, Materials and designs for rural roads and Rural sanitation and waste disposal.

Apart from this, activities trying to bring in more innovative approaches/ ideas with greater focus on the following areas will also be supported:

Rural Entrepreneurship/ skill Development, marketing Strategy and Networking, Rural Housing and Habitat Development- Low cost and natural calamity resilient housing structures for providing safe habitat to rural population, Rural service sector, Financial inclusion, micro-Finance to micro-Entrepreneurship, Financial and technological model for Health Care and Hygiene, Evolving package of products on Rural Tourism and Culture, Rural Sanitation and Rural Haats in collaboration with Panchayat Raj Institutions

5. Who are eligible to apply under RIF?

Individuals, NGOs, Community Based Organisations, SHGs, Farmer’s Club, Panchayati Raj Institutions and Corporate who have the expertise and willingness to implement innovative ideas for improving the quality of life in rural areas may apply.

6. How to apply?

Approach the District Development Manager (DDM) of NABARD in the district or the Regional Office of NABARD at State Capitals. For details of address of the Regional Offices, please see relevant section of the NABARD web-site. The proposals can also be directly emailed to NABARD HO (dpd.nfs@nabard.org).

7. What is the application format?

In view of the fact that there will be different types of innovative proposals expected to be received, no format has been prescribed. The Institutions / Individuals eligible to avail assistance under the RIF may submit their proposals containing adequate information / data as indicated in question 12 below about the competence of the propose to implement the project, how the project will impact the life of the target population etc.

The project should have positive economic impact on the rural masses; it should be implement able and replicable in a reasonable time frame of , say 1 to 2 years.

8. What is the prima facie competence of the proposer to apply under RIF?

(i) NGO’s/CBO’s Peoples Based Organisations should be duly registered under relevant Act, have a minimum of 2 years audited A/c’s, should have a good track record and relevant experience in the field. They should not have been blacklisted by GoI /State Govt/ other Donor / Financing Agencies and should not have political affiliations and their activities should not discriminate on the basis of caste, creed or religion.

(ii) Individuals applying for support from the fund should have proven competence and commitment.

9. What type of financial support is available under RIF?

Support available under RIF can be in the form of loan / grant/ incubation fund support, or a mix of all the three components. The support would be need based, cost effective and dependent on the requirement of the project, also taking into account some financial involvement by the proposer. This will be decided on a case-to-case basis.

10. What will be the general procedure followed by NABARD in dealing with the proposals?
On receipt of the proposals, NABARD (Office of DDM / Regional Office/Head Office) will issue an acknowledgment of the receipt of the proposal.

Within a month, further information’s/details if any required for processing will be called for.

In case the proposal is sanctioned, the proposer will be informed about the anction of the proposal and the terms and conditions of sanction.

Further details of implementation, monitoring and review will be contained in the terms and conditions of sanction. In case of rejection, the reasons for rejection will be intimated to the proposer.

The average time period from the date of receipt of complete proposal to sanction thereof is expected to be 3 months.

In the sanction letter the monitoring process and indicators will be stipulated, in relation to the specific nature of the proposal.

11. Who would be the Implementing Agency?

The Agency /individual submitting the proposal will have to implement the proposal.

12. Check-list for submitting proposals for assistance from RIF?

The proposals received will be subjected to scrutiny by the Regional Office of NABARD. The Regional Office will verify whether information on the following is available in the proposal or not (the list is illustrative and not exhaustive). Therefore, the proposer should ensure that information together with supporting documents, wherever deemed necessary, is furnished to avoid repeated correspondence. The following is the checklist:

12.1 Details of the Initiator of the ProposalName of the Agency/individual

Address

Past experience if any (Specific details on types of projects undertaken, support received from NABARD or any other Institution/ Body/ authority.)

Financial stake in the proposal; to what extent? Item wise financial details, contribution of the proposer, other partners/ stakeholders, their role and contribution, if any

Whether the Proposer’s role is limited to conceptualization of the idea only or is it up to implementation stage.

Management of the Project: Whether the model suggested for project implementation is participative in nature (involving the people whom it is likely to benefit) or does the proposer solely manage it?

Track Record: What has been the record in initiating similar project(s)/ideas in the past?

If the proposal is from any Agency, (not an individual) audited balance sheet, registration details if any, copy of bye-laws/Memorandum & Article of Association as the case may be, may be submitted.

12.2 About the project/ proposal

The project proposal should contain

• Details of the proposed project/purpose and expected outcome.
• Financial costs (component wise)
• Cost benefit analysis (including social cost benefit) wherever necessary
• Profitability/break even wherever necessary
• Comments on the uniqueness of the Project/ proposal

Please comment on the uniqueness, keeping in view the following points:

A project could be

(i) Not Unique at all, (ii) Unique to the particular State/Region or (iii) Totally Unique.

Uniqueness could also be in terms of the Core Idea:

(i) is it a mere replication of an existing programme/idea, or

(ii) is it an adaptation from an existing idea, or

(iii) is it a totally new idea-an insight?

Uniqueness can also be evaluated in terms of the end results:

(i) Does it address a large size problem existing or

(ii) Is it concerned with only a peripheral issue of a larger problem?

(iii) Does it offer a complete solution to the problem or (iv) is it confined to a partial solution?

Expected Impact of the proposal :

Please comment on the impact, keeping in view the following points

The impact of the project can be measured in terms of:

(i) The number of people likely to be impacted by the project,

(ii) the profitability to the ultimate beneficiaries,

(iii) the strata / segment of society impacted (the poorest to the upper segment of the society) and

The social objectives served by the impact of the project could be in terms of

(i) reducing poverty,

(ii) improving literacy/ awareness levels,

(iii) enhancing life expectancy,

(iv) reduction in the drudgery levels,

(v) better environment and better rural habitat.

• Impact also needs to be assessed in terms of Sustainability/ Scalability of the project.
• How to replicate the experience of the present project for wider coverage?
• Expected outcome of the project.

This could be gauged from the time taken to deliver gainful outcome and what magnitude it is expected to achieve in the next few years.

12.3. About the Context (Environment)

The relevance of the project to the political, social, environmental and economic climate also needs to be assessed for funding under RIF. That is:

• Are the Project benefits in alignment with the political climate of the project area?
• Are the project benefits in harmony with the social needs?
• Are the project benefits environmental friendly or against the environment concerns?

Does the Project make any positive impact on the community in terms of economic benefits?

Contact Us

The Chief General Manager
Development Policy Department (Non-Farm Sector)
NABARD
Plot No: C-24, 'G' Block, Bandra - Kurla Complex
P.B. No.8121, Bandra (E)
Mumbai 4000051

Tel: 022-26524207, 022-26539638, 022-26539639, 022-26539640, 022-26539654

Fax:022-26530082

Email: dpd.nfs@nabard.org

For your nearest contact NABARD