Rural Housing Loans to Self
Objectives: To finance Self Help groups for on lending to members
for housing in rural areas, covering the following purpose.
For the purchase or
construction of a house exclusively or including the housing needs of
activities carried by them. (Dairy shed, tailoring shed/shop, grocery
For the renovation or
repair of an existing house/shed.
For the purchase of a
plot of land for the purpose of house construction.
For the extension of
existing house/work space.
If the plots owned are in
different places in the same village two separate loans for the purposes of
dwelling area and work shed may be extend.
Operational Area : In semi-urban and rural areas where SHGs are
Eligibility: SHGs which are in existence for more than 2 years
and with a good track record of payment record for 2 years.
SHGs fulfilling the above
conditions but maintaining their accounts with other banks are also
eligible. In this case the following stipulations will be applicable:
The SHG should open
their account with our bank.
The loan amount will be
equivalent to 10 times of the corpus amount available in this account with
us. (Inclusive of the amount transferred from other banks and kept in
their account with us.)
All the other accounts
of the SHG maintained with other banks, if any, should be transferred to
our bank, say within a period of 6 months and their passbook/statement of
account etc. may be kept alongwith our documents.
A certificate from the
sanctioning/recommending authority stating that they have satisfied
themselves about the credentials, track record and existence of the SHG
for a minimum period of 2 years should be incorporated in the appraisal/proposal(s).
However, it will not be necessary to get a certificate to this effect from
any bank, which is currently the banker to the SHG.
Loan amount:10 times the savings of the corpus of SHG. This
ceiling would include the loan outstanding in the limits already sanctioned
to SHGs. SHG will on lend its members for housing subject to a maximum of Rs.
50,000/- per member for purchase/construction of house and Rs. 25,000/- for
repairs/renovations/purchase of plot.
Classification : All loans under this scheme will be classified
as priority sector advances under SHG.
Processing charges : All handling such as processing fee, ledger
folio fee etc. are waived-except legal scrutiny fee which should not exceed
Security: Primary : Group Guarantee of SHG members.
Repayment: The repayment of installment to be spread over a
period of 15 years and the installment amount to be fixed at
monthly/quarterly/half yearly/yearly as in convenient.
Rate of interest: As offered under GJRHFS, (Golden Jubilee Rural
Housing Finance Scheme) a concession of 0.25% below the card rate is
Specimen copy of the
“Application to be submitted by SHG to the bank branch
while applying for housing loan for its members” is enclosed.
Article of Agreement
for financing Housing loan to Self Help Groups (Annexure=XIII SN2)
Other terms and conditions
SHG should not charge to
its members more than 3% of interest rate charged by the bank under this