GUIDELINES FOR FUNDIN6 PROJECTS
AND
APPLICATION FORMAT FOR FINANCIAL ASSISTANCE
NATIONAL HANDICAPPED FINANCE AND DEVELOPMENT CORPORATION
(Ministry of welfare, Government of India)
Red Cross Bhavan (Opp. Mini Secretariat), Sector-12, Faridabad-121007(Haryana.)
GUIDELINES FOR FUNDING PROJECTS
The 'National Handicapped Finance and Development Corporation' has been incorporated by Ministry of Welfare, Govt. of India on 24th Jan. 1997 under section 25 of the companies Act 1956 as a company not for profit. It is wholly owned by Govt. of India and has an authorised share capital of Rs. 400 crores (Rupees Four Hundred crores only.)

OBJECTIVES

1. Promote economic development activities for the benefit of the persons with disabilities.
2. Promote self-employment and other ventures for the benefit/economic rehabilitation of the persons with disabilities.
3. Assist individuals with disabilities or groups of individuals with disabilities by way of loans and advances for economically and financially viable schemes and projects.
4. Grant concessional finance in selected cases for the persons with disability in the country in collaboration with Government Ministries/Depts. at State level to the extent of the budgetary assistance granted by the Government of India to the company.
5. Extend loans to the persons with disability for pursuing general/professional/technical education for training at graduate and higher levels.
6. Assist in the upgradation of technical and entrepreneurial skills of persons with disability for proper and efficient management of production units.
7. Set up training, quality control, process development, technology, common facility centres and other infrastructural activities for the proper rehabilitation/upliftment of the handicapped persons in support of their economic pursuits.
8. Assist the State level organisations to deal with the development of the persons with disability by way of providing financial assistance and in obtaining commercial funding or by way of refinancing.
9. Work as an apex institution for channelising the funds through State Finance Corporations for the Handicapped or through corresponding Corporations authorised by State Govts./Boards set up by Union Government/State Government/Union Territory Administrations and Voluntary Organisations. The NHFDC will receive proposals for financial assistance through above mentioned organisations and sanction loans and margin money to the beneficiaries for disbursement through these organisations.
10. Assist self-employed individuals/group of individuals or registered factories/companies/cooperatives of disabled persons in marketing their finished goods and assist in procurement of raw materials.
11. To develop, operate and implement specific pilot programmes, projects and schemes in India in support of promotion of the self-employment, economic activities of the handicapped persons with a view of introducing innovations, technological up-gradation and bridging the critical gaps of infrastructure, input supply, output processing and marketing.
12. To undertake and/or support technically, managerially or financially research and evaluation studies, techno-economic and related surveys, preparation and appraisal of project reports and documents, feasibility and other studies for developing viable programmes, projects, schemes for the benefit of handicapped.
13. To establish, maintain, subscribe or to subsidise or become member of training institution , research laboratories, research institutions and experimental experiments.

SCHEMES FOR FINANCING PROJECTS
The corporation can assist a wide range of income generating activities. Infrastructure development schemes alone will not qualify for financing unless it leads directly to income generation

For a disabled person living below the income/economic criteria, the proposals should be such which generate adequate income to the disabled person to rise above the economic criteria limit.

1. Self employment in Small Business e.g. Service/Trading sector :

Loan will be provided for self employment of disabled persons in service sector or for trading activity. The Small Business, project or activity for which financial assistance has been sought, will have to be operated by the disabled person himself and employing at least 15% disabled persons in his venture.

Maximum loan available under this scheme is Rs. 2.50 lakh. Indicative areas for financing are :

1. Shops or Stores of any type
2. Workshops or repair shops or service centres
3. Health centre/Beauty parlour
4. Computer centre (training &job work)
5. Studio/Photography
6. Printing Press
7. Telephone/Fax/E-mail booth
8. Tailoring
9. Travel agency
10. Xerox centre
11. Transport service
12. Poultry farming
13. Handicraft
14. Brassware
15. Dealership
16. Franchise
17. School for disabled
18. Weaving
19. Book Binding
20. Leather work
21. Physiotherapy
22. Music Schools
23. Computer Hardware Dealership
24. Dealership of petroleum products
25. Candle and chalk making

Any other suitable area not covered above.

2. Assistance to Disabled Entrepreneurs :
Loan may be provided for manufacturing, fabrication and production activity. The disabled person will be the owner/chief executive of the company and employing at least 15% disabled persons.

Maximum amount of loan provided under the scheme is Rs. 20.00 lakh. Illustrative list is given below :

1. Ancillary products manufacturing
2. Software development and marketing
3. Fisheries
4. Dairy farming
5. Diamond Cutting and Polishing
6. Food processing
7. Garments Manufacturing
8. Potteries
9. Furniture manufacturing including
10. Plastic moulding
11. Agro based industry
12. Herbal products
13. Packaging

Any other suitable manufacturing/processing activity besides above.

3. Assistance to Disabled for Higher Studies or Professional Training :
Towards the fulfillment of the overall objectives of empowerment and development of disabled persons in the country, the Corporation provides financial assistance to eligible beneficiaries in two components viz., educational/training grants and loans (In pursuance of objective (5) & (6) of MOA).

Financial assistance from the corporation would flow towards training and education requirements of the disabled groups under both formal and non-formal education/training which would impart useful knowledge and skill. Formal training would equip the beneficiary to improve his/her chances of employment and self-employment through completing appropriate vocational academic courses leading to the certificate/diploma or other qualification. While higher education (under graduate, post-graduate and doctoral studies) applications would be considered for loan whereas application for technical education/training leading to diplomas and certificates will he considered as grants, which would meet the beneficiary's expenses towards both tuition fees and hostel facilities provided no other financial assistance or concessions) is available from any other source for this purpose.

Channelising Agencies are required to furnish lists of recognised institutions identified for imparting training in these areas which will be approved by the Corporation.

Additionally, technical training including non-formal training wherever required will not form part of the project and the expenditure incurred therein will not form part of a loan.

4. Assistance for Agricultural Activities
Loan assistance is provided to disabled persons for :

1. Agricultural production and related field such as irrigation, purchase of agriculture machinery, horticulture, sericulture etc.
2. Purchase of equipment for agriculture services such as custom service (pesticide spray, harvesting etc.) custom hiring of agriculture machinery.
3. Agriculture marketing (through cooperative societies/Association of disabled farmers), Setting up grading and packing houses, purchase of transport vehicles for marketing of agriculture produce etc.
4. Purchase of land for agriculture purpose by individual disabled person or by cooperative societies of disabled persons.
5. Commission agents at Mandi Samities.
6. Small business such as retail outlets for marketing Organic fertilisers, Pesticides/insecticides. Improved variety of seeds, farm machinery etc.

Maximum loan available under this scheme is Rs. 5.00 lakh.

5. Scheme to Promote Manufacturing/Production of Assistive Devices for Disabled persons :
Loan Assistance is provided for setting up small scale industry for manufacturing aids and appliances developed under R&D programmes of Govt./academic institutions of repute for disabled within the country. The company should employ disabled persons.

Maximum loan available under this scheme is Rs. 25.00 lakh.

6. Assistance for Skills & Entrepreneurial Development Programmes :

1. Financial assistance in the form of loan is provided to the channelising agencies, reputed NGO's, RRTC's and recognised technical institutions for imparting skills and entrepreneurial development training to disabled persons.

   Financial assistance is also provided for setting up vocational training centres including computer training centre, exclusively for imparting skills and entrepreneurial development training to disabled persons.

2. The proposals for loan should necessarily indicate placement/self employment opportunities to the disabled after training.
3. Financial assistance in the form of loan will also be available for upgradation of skills of disabled workers and entrepreneurs who have set up units with the financial assistance from NHFDC.

7. Scheme to Promote Self Employment amongst Persons with Mental Retardation, Cerebral Palsy and Autism :
Persons with mental retardation, cerebral palsy or autism may not be eligible to seek loan and enter into a legal contract. In such cases following categories of persons are eligible for financial assistance from NHFDC:-

1. Parents of dependant mentally retarded persons
2. Spouse of dependant mentally retarded persons

Persons seeking loan from NHFDC under this category should encourage self employment of the mentally retarded persons. Projects should be identified in such a way that there is direct involvement and participation of the beneficiary in the project.

Indicative areas for financing are :

1. Shop or store
2. Assembling unit
3. Workshop or repair shop
4. Envelop making unit
5. Pickle, papad, wadi making unit
6. Home unit for making squash, jam etc.
7. Bakery
8. Xerox Centre
9. Tailoring unit
10. DTP Centre
11. Screen Printing
12. Poultry
13. Dairy Farming
14. Horticulture
15. Handloom unit
16. Block, textile printing

ELIGIBILITY CRITERIA

(A)Criteria of Disability
The beneficiary should be a disabled person or a cooperative society of disabled persons or a legally constituted association of disabled persons or a firm promoted by disabled persons unless otherwise mentioned in the scheme for financing.

In order to be eligible for loans on concessional interest rates from the Corporation, the minimum degree of disability shall not be less than 40 percent.

A person with disability means a person:-

1. who is blind or
2. who is a person with low vision, or
3. who is speech and hearing handicapped, or
4. who has a locomotor disability on account oforthopaedic or neurological impairment (including cerebral palsy) or
5. who is mentally retarded, or
6. who is multiple handicapped, and includes any person who is unable to ensure by himself/ herself, wholly or partly, the necessities of a normal individual or social life including work, as a result of deficiency, whether congenital or not, in his/her physical or mental capabilities.

Explanation for the purpose of the disabilities mentioned above:

1. a person shall be deemed to be blind if he suffers from either of the following conditions, namely:-
2. total absence of sight, or
3. visual acuity not exceeding 6/60 or 20/200 (snellen in the better eye with correcting lenses) or
4. limitation of field of vision subtending an angle of 20 degree or worse.

2. a person with low vision is one who has impairment of visual functioning even after treatment and/or standard refractive correction, but who uses, or is potentially able to use vision for the planning or execution of a task with appropriate assistive device.
3. a person shall be deemed to be deaf if he/she has lost sixty decibels or more in the better ear in the conversational range or frequencies.
4. a person shall be deemed to have locomotor disability if he is having disability of the bones, joints or muscles leading to substantial restriction of the movement of the limbs or if has any form of cerebral palsy.
5. mental retardation refers to sub-average general intellectual functioning which originates during the development period and is associated with impairment in adaptive behaviour.
6. mentally ill person shall have the same meaning as assigned to the word in para (i), section 2, Chapter I of Mental Health Act, 1987.
7. Leprosy-cured persons mean and included leprosy-cured persons -

1. with loss of sensation in hands or feet as well as of sensation and paresis in the eye and eye lid but with no manifest deformity
2. with manifest deformity and paresis but having sufficient mobility in their hands and feet to enable them to engage in normal economic activity
3. suffering from extreme physical deformity as well as advanced age which prevents them from re-entering into any economic activity;

8. multiple handicapped means and includes a person with more than one disability.

B) Economic/Income Criteria
Unemployed disabled persons whose family income is below Rs. 22.000/- p. a. for rural areas and Rs. 24,000/- p.a. for urban areas (two times of poverty line) are eligible for availing loan facility. (Family means parents or spouse of dependent disabled).

In case of self dependent disabled, the income of the individual will only be taken into account.

The economic criteria will also be applicable to each member of a cooperative society of disabled persons, association of disabled persons and firm promoted by disabled persons seeking financial assistance from NHFDC.

Minimum age limit for availing loan is 18 years and maximum age is 55 years. However, the maximum age could be relaxed in the case of professionally qualified entrepreneurs.

The sanctioned loan amount and repayment period will depend on the age of applicant.

C) Other Requirements
The applicant :

1. should be an Indian citizen;
2. should be domicile of the state where the project is proposed to be put up;
3. should have relevant educational/technical/vocational qualification/experience/background;
4. should not have any large outstanding debt from other organisation and should not be a financial defaulter:
5. should be from agricultural background and project location should be in agricultural area if seeking loan under the scheme 'Assistance for Agricultural Activities'

TYPES OF FUNDING

NHFDC can consider following types-of loans;

1. Term Loan
The Corporation can consider grant of Term Loan to a disabled entrepreneur or group of disabled entrepreneurs through the channelising agency.

Under Term Loan Scheme, loans are given upto 100% of project cost as follows:-

For the project with high working capital component, quantum of loan will depend upon the total cost of the project as follows :

1. Where the total cost of the scheme does not exceed Rs.50,000 the scheme will be treated as a composite loan and no distinction will be made between fixed asset and working capital. In such cases loans can be granted upto 100% of the total cost.
2. Where the unit cost of the project is more than Rs.50,000 but does not exceed Rs. 1,00,000 the ratio of fixed assets to working capital will not exceed 1:3.
3. Where the unit cost of the scheme exceed Rs.1.00 lakh, only 50% of the working capital requirement will be added in the project cost as working capital margin to arrive at the unit cost of the project, remaining amount of the working capital will have to be financed by the banks as cash credit limit.

In order to cover maximum number of beneficiaries, 75 % of the amount of term loans sanctioned in any financial year to a Channelising Agency shall be for those projects where NHFDC loan component is below Rs. 1,00,000 per unit.

2. Margin Money Loan (Seed Capital)

1. Seed Capital assistance is provided to entrepreneurs availing term loan from State Financial Corporations (SFCs) /other financial institution but not able to bring in their share of equity stipulated by the term lending institutions.
2. Seed Capital assistance is to meet the gap in the equity stipulated by the term lending institutions as per their norm of debt equity ratio.
3. The entrepreneur is to bring in a minimum of 20% of the equity.
4. NHFDC may provide Seed Capital assistance upto 80% equity required to be funded by tne beneficiary for the total project cost upto Rs. 50 lakhs.
5. Seed Capital assistance is free of interest but the channelising agencies will levy a service charge of 1% p.a. from the beneficiaries and pay 0.5% p.a. to NHFDC.
6. Seed Capital is to be repaid within a maximum period of 7 years from the date of first disbursement, inclusive of suitable moratorium. Incases where Seed Capital assistance remains unpaid beyond 7 years, the same shall be converted into term loan at the expiry of 7th year at an interest applicable to NHFDC term loan and shall be paid within 3 years in quarterly instalments from the date of conversion into term loan.The Margin Money Loan may be recovered from the beneficiary along with bank loan in the same proportion which the Margin Money bears to the bank loan. Based on such recoveries the Channelising Agency or other agency will make the repayment schedule of margin money.
7. Projects considered for Seed Capital assistance shall not be eligible for any other financial assistance from NHFDC.

* For women with disability, a rebate of 2% on interest is provided.

** A rebate of 0.5% on interest is provided for timely repayment of loan.

ALLOCATION OF AVAILABLE FUND FOR DISBURSEMENT

1. In order to cover maximum number of beneficiaries, 75 %of available fund is earmarked for those projects where NHFDC loan is below 1.0 lakh.
2. In order to ensure economic empowerment of disabled women and to ensure general balance, channelising agencies are to give due weightage to women applicants and special efforts should be made to attract projects from women.

SANCTION OF LOAN

1. Loan will be sanctioned by channelising agency for final disbursement to beneficiary with prior approval of NHFDC. The channelising agency will send all applications for loan duly recommended for approval of NHFDC.
2. For loan under scheme (5) - production of assistive devices and scheme (6) - assistance for skill & entrepreneurial development, application will be received and appraised by NHFDC directly. The loan will be sanctioned and disbursed by NHFDC.
3. All projects with loan component exceeding Rs. 10 lakhs will be sanctioned by Board of Directors ofNHFDC

RECOVERY OF LOAN

1. The entire loan shall be repaid within a reasonable period but not exceeding 7 years including the moratorium period. The repayment shall be on half yearly / quarterly / monthly basis. For agriculture and horticulture projects repayment shall be on yearly basis. The repayment period will be worked out during appraisal and sanction of scheme on the basis of income potential of the proposed project.
2. A suitable moratorium period depending on the merit and requirement of the project will be allowed.
3. A rebate of 0.5% on interest is provided for timely payment of all instalment.
4. A penal interest of 3 % will be charged from channelising agency for default in timely repayment. The channelising agency will also charge penal interest of 3% from the beneficiary for default in repayment.

SECURITY

1. Block Government guarantee is required from concerned State Govt. for the sanction and disbursement of loan by NHFDC to State Channelising Agencies. In case of persistent default the NHFDC will be at liberty to invoke the guarantees or deduct its instalments from the future projects of the concerned agency to be financed.
2. NHFDC may also accept Bank Guarantee or any other form of security acceptable to it for grant of loans.

FORMAT OF APPLICATION FOR FINANCIAL ASSISTANCE
(UNDER SCHEME 1, 2, 4, 5 & 7 ONLY)
(This is only a format and not an application form)
INSTRUCTIONS FOR SUBMITTING PROJECT PROPOSAL

1. Tern-is and conditions of the loan including interest thereon shall be subject to guidelines or special directive issued by Govt. of India, the RBI or NHFDC from time to time.
2. An affidavit stating that no loan has been sanctioned to the applicant or financial assistance received from any other Govt. funding agency for the same project/scheme is to be attached.
3. All clearances required have been obtained from respective central/state govt. agencies including clearance from state pollution control board. Copy of all such clearances are to be attached.
4. The sole-proprietor in the case of sole-proprietary concern; all the partners in respect of partnership firm; two of the directors (authorised in this behalf) in the case of company; two office bearers (authorised in this behalf) in respect of co-operative society should append their signatures against their names which should be given in block letters in the application form. They should also sign and certify all other papers to be submitted along with the forms or subsequently.
5. Partnership concerns where minors have been admitted to its benefits, permission of court will be required.
6. Application complete in all respect alongwith a passport size photograph and a postcard si7.e full photograph and all relevant papers to be submitted in duplicate to the channelising agency except for scheme 5 (Production of assistive devices) which is to be submitted directly to NHFDC.
7. Each column of the application format alongwith attached proformas should be properly tilled up giving appropriate information/suitable remarks. No column should be left blank. Instead write "NA" (not applicable) in the blank column.

PARTICULAR OF PROMOTER(S)

1. Name and Address of the Promoter(s)
2. Father's/Husband's name
3. Details of disability & percentage of disability (attach attested photocopy of certificate from competent authority)
4. Family detail
5. Annual income of individual. If dependent, please give income of family/spouse, (attach attested copy of income certificate)
6. Date of birth and age as on 1st of following month during which the application is submitted. (attach attested copy of birth certificate)
7. Educational and technical background particularly related to proposed project/scheme.
8. Domicile certificate or proof of residence during last three years.
9. Employed/self-employed/unemployed. Give detail if employed or self-employed.
10. Whether belong to SC/ST/OBC/Other
11. Constitution of propsed venture Proprietors-/Partnership/Cooperative Society/Pvt. Ltd./Public Ltd. company (attach documentary support)
12. Existing activities and financial status including land holding, fixed assets in the name of applicant (attach copies of last 3 years Balance Sheets and P&L A/C) in case of existing companies.

2. PROPOSED ACTIVITY

1. Name of the Scheme/Project
2. Details of the project or proposed activity
3. (i).Location of Unit
   (ii).Whether confirming or non-confirming (Please specify if location confirms to location policy of the state govt./local authority)

3. COST OF THE PROJECT(Rs in Lakhs)

Note:

1. Furnish details as per Annexure-I for item No. (i), (ii), (iii) and (iv) above.
2. Working capital amount may be included as part of cost of project as per the guideline.

4.MEANS OF FINANCE

5. TECHNICAL DETAILS

1. Technical Know-how
   Arrangements made for technical know-how for erection/commissioning of the plant and for manufacturing of the proposed products.
2. Manufacturing Process
   Details of different operations starting from raw materials to finished goods and also justifying requirement of each machine proposed in the project.
3. Raw Material Requirements
   Major row materials, quantity, source of supply and price of material itemwise and availability position also.
4. i) Power (Load required, sanctioned etc.)
   ii)Water
   iii)Fuel
   Indicate separately for each item total requirement of above & arrangements made for the supply thereof.
5. Effluent Disposal Arrangements made for disposal of effluent, if applicable.

6. ECONOMICS OF THE PROJECT
Give Details of cost of production, sales and profit as per Annexure-II

7. MANPOWER REQUIREMENT

8. MARKETING ARRANGEMENTS

1. Aggregate Demand and Supply position in the area
2. Competitors Activities
3. Selling Arrangements

9. REPAYMENT SCHEDULE

1. Please indicate Moratorium Period needed with Justification
2. Repayment in terms of quarterly/half yearly/yearly instalments (maximum repayment period is 7 years including moratorium period)

10. IMPLEMENTATION SCHEDULE

11. WORKING CAPITAL REQUIREMENT
Please give justification for the estimates made in the scheme and give details as per Annexure-III and indicate whether working capital is required from NHFDC also. In case working capital is arranged/to be arranged from other source, give the name and address of the Bank/Institution etc.

12. OTHERS

1. Government Consents
2. Environmental Clearance
3. Other Govt. Clearance, if any

CERTIFICATE

1. I/We certify that all information furnished by me/us is true; that I/We have no borrowing arrangements for the unit with any bank/financial institutions, except as mentioned above; that no legal action has been/is being taken against me/us; That I/We shall furnish all other information that may he required by you in connection with my/our application; that this may also be exchanged by you with any agency you may deem fit; and that you, your representatives, representatives of RBI or any other agency authorised by you may at any time, inspect/verify our assets, books of account, etc. in our factory and business premises.
2. I/We further certify that I/We do not have any overdues in respect of any financial assistance I/We have availed so far.

Place................
Date...................

Signature of applicant

TECHNICAL DETAILS
PART- A BUILDING

PARTICULARS :

1. Location
2. Own/Leased
3. Rent per month in case of leased/rented
4. Construction cost of New Building/civil works (Type of structure, dimensions, area and cost of construction per square feet etc. may be furnished)

PART-B PLANT AND MACHINERY

Note: Add Transportation and installation cost also.

PART-C MISCELLANEOUS FIXED ASSETS

COST OF PRODUCTION AND PROFITABILITY STATEMENT
(for a period till repayment of loan)

DETAILS OF WORKING CAPITAL (PER UNIT) AT FULL CAPACITY UTILIZATION

Less : Credit on purchases _______________________
Net working capital requirement_______________________

APPRAISAL FORM
To be filled up by the applicant along with the application form

For Office Use Only

1. Name of official who interviewed the applicant
2. Remarks

1. Has the applicant necessary determination, experience,
   know-how, knowledge of market for achieving the
   anticipated turnover (Please mention the ground on
   which you have based your opinion)
2. Repayment schedule for term loan/working capital
   1. Repayment programme
   2. Repayment capacity
      Monthly surplus (term 1(c))
      Monthly instalments proposed
      Monthly instalments for existing term
      loan and other obligations (to be specified)
      Total monthly obligations
      Debt service ratio
   3. Comments

4. Remark of the technical report, if obtained
5. Loan sanctioned
6. Other remarks

Place :

Appraising official/Sanctioning Authority

Date :