Mahila Udyam Nidhi Scheme

This scheme aims to provide soft loan (Quasi equity) assistance to women entrepreneurs besides usual term loans for setting up industrial units in the small scale and tiny sector, as also for undertaking service activities eligible for assistance under the SIDBI refinance scheme.

Eligibility

	New projects in tiny and small-scale sectors for manufacture, preservation or processing of goods (Tiny enterprises would include all industrial units and services industries (except Road Transport Operators) satisfying the investment ceiling.
	Existing tiny and small scale industrial units and service enterprises as mentioned above (including those which have availed of this loan earlier) for undertaking expansion, modernisation, technology upgradation and diversification.
	Sick units in the tiny and small-scale sectors including service enterprises as mentioned above, which are considered potentially viable.
	All industrial activities and service activities (except Road Transport Operators) in the SSI sector.
	Projects which avail of any margin money or seed/special capital assistance under the schemes of Central/State Governments, State Financial Corporation and other state level institutions or banks (except State investment subsidy) are not eligible for assistance under the scheme.

Project Outlay

Project cost (including margin money for working capital) should not exceed Rs.10.00 lakh in case of new projects. In the case of existing units and service enterprises, the outlay on expansion/modernisation/technology upgradation, or diversification or rehabilitation should not exceed Rs.10.00 lakh per project.

Amount of soft loan

Soft loan up to 25% of the project cost with a ceiling of Rs.2.50 lakh per project to meet the gap in equity as per prescribed Debt Equity Ratio (DER) of 1.857:1 (excluding State subsidy which may be retained for meeting working capital) after taking into account the promotors' own contribution equivalent to 10% of the project cost. In addition, term loan may be sanctioned as per usual norms under Refinance Scheme of SIDBI.

Security

Hypothecation of the articles purchased. 3rd party guarantee acceptable to the bank. No security including collateral security will be insisted upon from borrowers in respect of soft loan.

Rate of Interest

	Soft loan: Only service charge @ 1% p.a. is payable, which may be retained by lending office.
	Term Loan: As per interest rates advised from time to time or structure under Refinance Scheme as fixed by SIDBI from time to time, in case refinance has been availed. For such prevailing rates, the concerned branch may be contacted.

Repayment

Soft loan is repayable within 10 years (inclusive of initial moratorium period of not more than five years). However, the period of repayment of soft loan will be co-terminus with that of term loan.

Extent of Refinance/Reimbursement of the Soft Loan

	Term Loan: As provided under the Refinance Scheme.
	Soft Loan: Soft Loan is reimbursed to the extent of 100%.

Disbursement

	Soft loan is to be released in accordance with terms and conditions of sanction thereof and after the promoter(s) has (have) brought in her (their) own contribution in full.
	Bank has to act as agent of SIDBI for sanction, disbursement and recovery of soft loan.