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Deendayal Antyodaya Yojana- National Urban Livelihoods Mission (DAY- NULM)

Purpose

The Self Employment Program (SEP) of NULM focuses on providing financial assistance through provision of interest subsidy on loans to support establishment of Individual & Group Enterprises and Self-Help Groups (SHGs) of urban poor. The erstwhile provision of capital subsidy for USEP (Urban Self Employment Program) and UWSP (Urban Women Self-Help Program) under SJSRY has been replaced by interest subsidy for loans to Individual enterprise (SEP-I), Group enterprise (SEP-G) and Self Help Groups (SEP- SHGs). With a view to improving the livelihood opportunities for the poor in urban areas, erstwhile Ministry of Housing and Urban Poverty Alleviation (UPA Division), Government of India vide their Office Memorandum No. K-14011/2/2012UPA/FTS-5196 dated February 19, 2016 had enhanced the scope of National Urban Livelihoods Mission. The Mission with enhanced scope was renamed as “Deendayal Antyodaya Yojana - National Urban Livelihoods Mission (DAY-NULM)”.

Features

Loan Amount / Tenure of loan :
  • Individual Enterprises (SEP-I)-Loan & Subsidy:
    An urban poor individual beneficiary desirous of setting up an individual microenterprise for self-employment can avail benefit of subsidized loan under this component from any bank. The norms/ specifications for individual micro-enterprise loans are as follows:
  • Age:
    • The prospective beneficiary should have attained the age of 18 Years at the time of applying for loan
  • Project Cost (PC):
    • The Maximum unit Project Cost for an individual microenterprise is ₹ 2,00,000 (₹ Two Lakhs).
  • Margin Money:
    • No margin money should be taken for a loan up to ₹ 50,000 and for higher amount loans, preferably 5% should be taken as margin money and it should in no case be more than 10% of the project cost
  • Group Enterprises (SEP-G) Loan & Subsidy:
    A Self Help Group (SHG) or members of an SHG constituted under DAY-NULM or a group of urban poor for self-employment can avail benefit of subsidized loans under this component from any bank. The norms/ specifications for group based micro-enterprise loans are as follows:
  • Eligibility Criteria:
    • The group enterprises should have minimum of Three (3) members with a minimum of 70% of the members from urban poor families. More than one person from the same family should not be included in the same group.
  • Age:
    • All members of the group enterprise should have attained an age of 18 years at the time of applying for bank loan.
  • Project Cost (PC):
    • The group will be eligible for a maximum loan of Rs. 2 Lakh per member or Rs. 10 Lakh, whichever is lower.
  • Loan and Margin Money:
    • The Project Cost minus the beneficiary contribution (Margin Money) would be made available as loan amount to the group enterprise by the bank. No margin money should be taken for loan up to ₹ 50,000 and for higher amount loans, preferably 5% should be taken as margin money and it should in no case be more than 10% of the project cost.
  • Rate of interest : (EBLR + 3.25% ) p.a. Present effective rate = 7.55%+3.25% = 10.80% (w.e.f 15.06.2022).
  • Type of Loan : Cash Credit / Term Loan
  • Repayment schedule would range between 5 to 7 Years after initial moratorium of 6-18 months as per norms of the banks.

Collateral Security

No collateral is required in the case of loans up to ₹ 10 Lakhs extended to units in the MSE sector. Therefore, only the assets created would be hypothecated/ mortgaged/ pledged to bank for advancing loans. The branches have to obtain Guarantee cover from Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) setup by Small Industries Development Bank (SIDBI). or any other appropriate guarantee fund for the purpose of availing guarantee cover for SEP loans as per the eligibility of the activity for guarantee cover.


Interest subsidy

The financial assistance available to urban poor in setting up individual and group enterprises will be in the form of Interest subsidy on the bank loans. Interest subsidy, over and above 7% rate of interest will be available on a bank loan for setting up of individual or group enterprises. The difference between 7% p.a. and the rate of interest charged by the bank will be provided to banks under DAY-NULM. Interest subsidy will be given only in case of timely repayment of loan. Suitable certification from banks will be obtained in this regard. An additional 3 percent interest subvention will be provided to all Women Self Help Groups (WSHGs) who repay their loan in time. The Interest subsidy will be subject to timely repayment of the loan (as per the loan repayment schedule) and suitable certification obtained from bank by the ULB. The additional 3% interest subvention amount will be reimbursed to the eligible WSHGs. The bank should credit the amount of 3% interest subvention to the eligible WHSGs accounts and thereafter seek the reimbursement


Last Updated On : Saturday, 17-06-2023

Interest Rates

8.50%* p.a. onwards

w.e.f. 05.04.2024

*T&C Apply.

 

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