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India is a diverse country where people from different religions and castes live together. Many minor communities living in this country are not employed. To make them self-employed and provide them economic support, the Government of India introduced different self-employment loan schemes.
Credit Line 1-term Loan Scheme and Credit Line 2-term Loan Scheme are the most effective among the Self Employment Lending Schemes. These self-employment lending schemes help the minority population to be self-employed with their small scale business. The maximum loan amount in Credit Line 2-term Loan Scheme is Rs. 30 Lakhs for the project.
Self Employment Loan Scheme
Self-employment refers to the system in which an individual or group works for them instead of working for others. In a country like India, where the population is second highest after China, the problem of unemployment is expected. To tackle this problem, the government of India runs many schemes to encourage the people toward self-employment.
Self-employment loan schemes are the schemes in which the government provides financial support through loans and subsidies to its citizens to establish their businesses. The list of self-employment schemes in India is listed below.
- Aspire Scheme: A Scheme for Promotion and Innovation, Rural Industries and Entrepreneurship (ASPIRE) is aimed to make the people of rural areas self-employed by providing financial support from subsidies and loans.
- Self-Employment Landing Scheme: The Self-Employment Landing Scheme is run by the National Ministry Development and Finance Corporation (NMDFC) for the minority population to help them in self-employment.
- Kausal Se Kushalata Scheme: This scheme is run by the NMDFC to improve individuals’ skills and encourage them to be self-employed.
- Prime Minister Employment Generation Programme- This scheme is for the village industries.
- Self Employment Scheme- This scheme is for disabled individuals who want to set up their business in their area.
Other important self-employment schemes:
Self Employment Programme for Urban Poor Scheme | Mahila Samridhi Scheme |
Pradhan Mantri Rozgar Scheme | Start Up India Scheme |
Pradhan Mantri Mudra Scheme | Atma Nirbhar Bharat Scheme |
Marketing Assistant Scheme |
Self-Employment Lending Scheme
National Ministry Development and Finance Corporation (NMDFC) was founded in September 1994 for the growth of minor communities in the country. There are many schemes run by the NMDFC to uplift the minority population by funding them to set up their business. The main objective of this scheme is to encourage self-employment among the minor community and provide them financial support for the same. The scheme targets the minor community from several fields such as agriculture, small scale business, transport sector, service sector, technical sector etc.
Credit Line 1-term Loan Scheme and Credit Line 2-term Loan Scheme are the two types of self-employment lending schemes.
Class | Participants |
Credit Line 1-Term Loan Scheme | The credit of the Credit line 1-Term Loan scheme is based on the existing level of income. |
Credit Line 2-Term Loan Scheme | Credit line 1-Term Loan scheme is focused on the minority population. |
Credit Line 1-term Loan Scheme
Credit Line 1-term Loan scheme is the Scheme of the National Ministry Development and Finance Corporation. The loan is given for the project cost of Rs. 20 Lakhs, with an interest rate of 6%. The National Ministry Development and Finance Corporation provides 90 percent of the project amount of up to Rs. 18 Lacks under this scheme.
Self Employment Lending Schemes- Credit Line 2-term Loan Scheme
Credit Line 2-term Loan scheme is the Scheme of the National Ministry Development and Finance Corporation (NMDFC), which was launched to encourage the new entrepreneurs from the minor communities to set up their business units. NMDFC provides funds to the enterprise or entrepreneurs to be self-employed with their innovative ideas. The loan is for a project cost under Rs. 30 Lakhs in the credit line-2term loan scheme. The scheme targets the minor community, which is selected on the points of the creamy layer.
Important facts of Credit Line 2-term Loan Scheme
- The maximum value of the loan amount sanctioned under this scheme for the project is Rs. 30 Lakhs.
- The rate of interest charged on this amount to the minor communities is 3%.
- For the first six months, the person who gets the loan does not have to pay any amount.
- The borrower under this scheme can repay the loan amount within five years from the loan is granted. This period is extended for three more years (a total of eight years) for special centre assistance.
- Up to 90% of the amount is granted as a loan of the total project cost.
Self Employment Direct Loan Scheme
The self-employment direct loan scheme is for the unemployed population of the Scheduled Caste (SCs). Financial support is provided to this caste to buy the handicrafts and agricultural products used in daily life, such as vegetables and fruits. The cost per unit in this scheme is Rs. 50,000, in which Rs. 25,000 is the subsidy provided by the government and Rs. 25000 given as a loan. To get the benefits of this scheme, the person should belong to the Karnataka state and be related to Schedule Caste.
Conclusion
India is a developing country where unemployment is the major problem. The Self Employment Loan Scheme is the initiative of the government of India for unemployed people. Self Employment Lending Schemes are the scheme for minor people who are unemployed. The government provides the required skills and funds to encourage the minor community to be self-employed with this scheme.
