NEW PRODUCT DEVELOPMENT

Financing of small-scale enterprises in

unorganized sector.
Introduction to the sector
 Rural Non Farm Sector (RNFS) holds the key to faster
economic development of the country. It has potential
and promise for generating employment and increased
income in the rural areas. Since non-farm unorganized
enterprises alone have the potential to create large scale
employment at low capital cost, in a context where large
industries are experiencing negligible employment
growth while the employment elasticity of agriculture is
also low and declining; it is essential that non-farm
unorganized enterprises should get at least the same
treatment as is given to agriculture. They need adequate
and timely credit at reasonable cost.
What the product is all about?

 To set up new units as well as for modernization/ renovation/

expansion/diversification of existing units.
 It can also be for the replacement of old and obsolete
machinery.
 To change over to new process of manufacturing/introduction
of new technology/ computerization.
Whom to lend?

Borrowers include:
 Individuals,
 artisans,
 small entrepreneurs,
 groups of individuals, associations (formal and informal),

proprietary/partnership firms
Loan amount &Repayment period of loan

The part of the land( premises) will be kept as an

collateral security
 The loan amount may differ from concern to
concern depending upon the project evaluation
report and project viability report
 The loan limit will be in between 2 lacs to 25 lacs for
SSI
 The repayment period should be fixed between 2
years and 10 years with a need based moratorium
of up to 30 days for individual cases, based on the
debt servicing capacity of the borrower and taking
into account the nature of activity to be financed,
operating cycle, cash flow and the borrower’s
sustenance needs.
Rate of interest
 As we are having tailored made schemes so
the rate of interest may vary from 12% to
16% p.a.
THANK YOU