A member can have only one loan outstanding at any point of time, i.e., concurrent loans are not allowed. However, an emergency loan may be given even if the member has an outstanding loan.
Loans are sanctioned in proportion to the total savings of the SHGs in the federation – the regular savings amount and the fixed deposit should be 1/10 of the total loan demand. In case a group does not have the requisite savings deposited in the federation then it is supposed to deposit 1/10 of the loan amount required as fixed deposit a month before the loan is applied. Fixed Deposits are for a 3 - 5 year period.
Service Fees at the rate of 2% of the total loan amount sanctioned is charged
The emergency loan portfolio should be no more than 2% of the total outstanding portfolios at the Branch levels. The consumption loan portfolio should not exceed more than 10% of the total loan portfolio.
Life Insurance is mandatory for all members who take a loan. When a loan is taken to purchase an asset (e.g., buffalo, 3-wheeler) the asset is to be insured. |