Societies tend to carry myths like differently-abled individuals are incapable of working and therefore employers also sometimes overlook them. Starting a business venture is one of the healthy alternatives for them. However, businesses cannot run without sufficient capital investment in them. Therefore, business loans are needed in making the dreams of differently-abled individuals come true and allowing them to be self-reliant.
Disabled or differently-abled individuals can avail all of the government-sponsored services and facilities like all other Indian nationals. The Indian government has launched various business loan facilities for helping differently-abled folks to start their business venture and become self-sufficient as well as independent.
To benefit differently-abled people and to change society’s perspective of them, the government has started a corporation by the name ‘The National Handicapped Finance and Development Corporation’ (NHFDC). The primary objective of this establishment is to help in the smooth functioning of financial assistance to disabled people and the economic empowerment of differently-abled individuals. NHFDC offers loans for different business-related initiatives which include sourcing of commercial vehicles, funding of agriculture activities, industrial initiatives, and to take up professional or technical skill related education.
Types of Business Loans under NHFDC
Business loans offered by NHFDC cover any business which is economically feasible and has the potential to generate sufficient income for sustaining the individual in-charge or a family. Some of the operational schemes offered by NHFDC are as below:
Educational Loan Scheme
Purchase of Assistive Devices scheme
Micro Credit Scheme
|Scheme||Purpose||Rate of Interest (p.a.)||Loan Amount|
|Wide range of income-generating activities to disabled persons||For setting up a small establishment within the service or trading sector
Purchasing vehicle meant for commercial activity
Setting up of the small-scale industrial unit
|5% to 8%||
Up to Rs. 25 lakhs
|Loan for education/training to disabled persons||Funding professional courses offered by recognized institutions across India and also abroad||4%||
Up to Rs. 20 lakhs
|Financial assistance for skill & entrepreneurial development||Training offered to disabled individuals with the objective to make them self-reliant via technical training||-||-|
|Scheme for disabled young professionals||Funding professionally educated disabled youth who are looking for employment||5% to 8%||
Up to Rs. 25 lakhs
|Micro Financing Scheme||Starting a new source of income or adding to existing income-generating initiatives||Up to 5%||Rs. 10 lakhs|
The government, under NHDFC, offers business loans at considerably low rates of interest. The interest rates on business loans offered by NHDFC are:
|Interest Rate – Self Employment Scheme – 2020|
|For Loan less than or up to Rs. 50,000||5%|
|Loan Amount of Rs. 50,000 – Rs. 5 lakhs||6%|
|Loan Amount of Rs. 5 lakhs – Rs. 15 lakhs||7%|
|Loan Amount of Rs. 15 lakhs – Rs. 25 lakhs||8%|
Women can enjoy even lower interest rates if they are enrolled in Mahila Samridhi Yojana. 1% reduction is offered to women for the schemes mentioned above. Young disabled women can avail 1% rebate upon furnishing necessary documents.
Additional Reading: Schemes for Persons with Disabilities
Loan Amount Offered
NHFDC offers loan mainly for the upliftment of differently-abled individuals and here is a brief of the maximum loan amount offered by the institution:
For establishing a small business in sectors of service or trade, a maximum loan amount of Rs. 3 lakhs is offered by NHFDC. For transport-related activities, a maximum loan amount of Rs. 5 lakhs is sanctioned.
For setting up a small industrial establishment, Rs. 5 lakhs is offered as the maximum loan amount.
For education-related or professional training courses offered to the disabled individuals, a loan amount of Rs. 10 lakhs is offered. (For studies in India loan amount is limited to Rs. 10 lakhs and for studies that are taken up abroad, the loan amount is Rs. 20 lakhs).
For financing agricultural activities, a maximum loan of Rs. 5 lakhs is offered.
Individuals with cerebral palsy, autism, or individuals with mental retardation, loan amount of maximum Rs. 3 lakhs is offered for providing and encouraging self-employment.
Here are some of the eligibility criteria set out by NHFDC for individuals who wish to apply for the loan:
The applicant must be an Indian citizen.
Applicants above 18 years of age are eligible.
Applicants must furnish proof of minimum 40% disability.
The applicant must possess a professional degree from a recognised educational institute.
The business started by the applicant must be legal and should have been approved as per the CGS.
If an individual has already applied for an NHFDC educational loan, he or she can apply for a business loan. It is to be noted that the combined loan amount must not exceed Rs. 25 lakhs.
The NHFDC offers preference to women beneficiaries.
The applicant must be a registered member of Thrift and Credit Group (which is a Self-Help Group).
The final step in getting a business loan from NHFDC is applying for the same and getting approval. As a first and important step in the application process, you must have all the required documents which can act as proof of your eligibility for getting the loan. Some of the basic documents that are required include voter’s ID, Aadhar card, certificate of educational qualification, valid hospital records which can act as proof of minimum 40% disability, documents of any previously taken educational loans. After obtaining these documents, the applicant can furnish the application via a stipulated format using State Channelizing Agency.
Disabled people can greatly benefit from the business loan initiative set up by the Government of India. It acts as a boost for many individuals and they can benefit from it by having a successful business which allows them to be financially independent.
Additional Reading: Loans For Disabled
The loan repayment tenure under the business loans offered by NHFDC is very long. It allows a person sufficient opportunity to gain back the capital and repay as per his or her convenience. Minimum repayment tenure set by the agency is 3 years and the maximum goes up to 10 years. This applies to various schemes by NHFDC. Moratorium period is also calculated as part of this tenure.