Coronavirus stimulus: NABARD, SIDBI, NHB launches refinance schemes for NBFCs, MFIs

Coronavirus stimulus: NABARD, SIDBI, NHB launches refinance schemes for NBFCs, MFIs

Due to the outbreak of COVID-19 and nationwide lockdown, Reserve Bank of India has come up with refinance scheme for NABARD, NHB, SIDBI. With the financial support, the specialized institutions can offer help to different agricultural and industrial sectors to cope up with credit requirements during the lockdown. The details of the monetary help to different financial institutions are given in the following part of the article.

Launch details of the scheme

Name of scheme


Refinance schemes
Target group of scheme


Specialized financial intuitions like SIDBI, NABARD, NHB
Main objective of scheme


The institutions will offer finance to small industries, housing finance companies and the agricultural sector
Scheme announced by


Reserve Bank of India
Amount allotted for the scheme Rupees 50, 000 crores


highlighting features of scheme

  • Amount allotment under the scheme – Rupees 25, 000 crores have been given to National Bank for Agriculture and Rural Development, rupees 15, 000 crores offered to Small Industries Development Bank of India and rupees 10, 000 crores for National Housing banks.
  • Target group of the scheme – NABARD will help the rural banks and cooperative banks along with micro-financial houses. Also, SIDBI will give the money to medium and small business owners, and NHB will provide help to the housing financing companies during the lockdown.
  • Special refinance scheme by NHB – The NHB has come up Special refinance scheme to offer periodic loans to HFCs along with eligible money lending firms.
  • Objective of the scheme – The main objective of the financial help from the financial institution is to help the small and medium enterprises handle liquidity and the involved risks due to the outbreak of the pandemic.
  • Help for PLIs and HFCs – The HFCs and eligible PLIs need to disburse housing loans with the financial help offered within a year.

Eligibility to get loans given by NHB

  • Offer loan to HFCs and PLIs up to one year with a maximum of rupees 750 crores
  • The institutions with Net NPA less than 7.5 percent are eligible to get the help
  • The centers should have a minimum of 51 percent of total loans given to individuals
  • It should have 15 per cent or even more of cash flow during the time of moratorium

Eligibility to get loans under NABARD

  • The RRBs, NBFCs, MFIs and cooperative banks of the rural sector are eligible to get loan from NABARD
  • The long term for the institutors will be of 18 months along with one year benefit under the refinance scheme
  • Borrowers need to pay suitable amount in large at the end of the loan tenure

Eligibility to get loans underSIDBI

  • Under SIDBI, the NBFCs, MFIs, and other banks can get financial help
  • The entities should have a minimum investment and it should not depend on the size of its business to get coverage under the scheme
  • The entity should be in business operation for a minimum of three years as on 31st March, 2020.
  • The selected NBFCs should have as lowest as rupees 20 crores net worth along with rupees 50 crores of business assets.

For all the above cases, the borrowers had to repay the loan amount within tenure of three months. However, due to the outbreak of the pandemic, it has been extended to one year.

Documents required under the scheme

  • Identification details – It is important for the financial organizations to furnish suitable identification details about the organization for registration under the scheme. In this, one shall mention the name of the organization, owners, partners, and other service details.
  • Annual income – The organizers need to produce suitable income details of the enterprise to justify whether they are eligible to get the scheme benefits or not.
  • Business details – Here, the date of starting the organization, employee detail, service, and product details and the like documents should be furnished to avail of the benefits under the different financial institutions.
  • Bank details – The bank details of the financial institute shall help to transfer the beneficiary amount that they can help to cope with different credit needs.

Details of online application procedure of scheme

To offer suitable liquidity support, the government authorities are trying their best to come up with an online registration process of the newly launched schemes. After it comes up, the eligible financial institutions would be the first one to know about it.

The liquidity repo rate will be given by the guidelines of RBI, and it is 4.4% for the financial institutions. Therefore, RBI is offering help to the financial institution so that they can cope up with the situation during the lockdown.

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