What is the Financial Assistance provided to CBOs under NRLM?
Financial assistance in form of Revolving Fund, Vulnerability Reduction Fund, and Community Investment Fund is provided to the CBOs. NRLM does not provide direct financial support to individual members.
- Revolving Fund (RF): NRLM provides a Revolving Fund (RF) support to SHGs in existence for a minimum period of 3/6 months and follow the ‘Panchasutra’ – regular meetings, regular savings, regular internal lending, regular recoveries and maintenance of proper books of accounts. Only such SHGs that have not received any RF earlier will be provided with RF, as corpus, with a minimum of Rs. 10,000 and up to a maximum of Rs. 15,000 per SHG. The purpose of RF is to strengthen their institutional and financial management capacity and build a good credit history within the group.
- Vulnerability Reduction Fund (VRF): VRF, to the tune of Rs.1500 per member, is provided to the SHG Federations at the village level in the intensive blocks. VRF will be used for addressing the vulnerabilities of the members like food security, health security etc., and for meeting the needs of the vulnerable persons in the village.
- Community Investment support Fund (CIF): CIF, to the tune of Rs.3000 per SHG member, is provided to the CLFs in the intensive blocks, to be maintained as resource in perpetuity by the CLF. The CIF is used, by the Federations, to advance loans to the SHGs and/or to undertake the common/collective socio-economic activities. Initially, in the absence of emergence of CLF, the CIF to the tune of Rs.50000 is given to SHG directly on developing its Micro-credit Plan/Micro-plan, to be repaid to CLF via SHG Federation at the village level.
- Interest subvention: NRLM has a provision for interest subvention, to cover the difference between the Lending Rate of the banks and 7%, on all credit from the banks/financial institutions availed by women SHGs, for a maximum of Rs 3, 00,000 per SHG.
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