TomorrowMakers

Rashtriya Mahila Kosh is a facilitating agency that extends monetary benefits to women through other Intermediary Microfinancing Organisations without the need for any collateral

Rashtriya Mahila Kosh: Micro-credit assistance to women

For a country to truly prosper, the economic empowerment of women cannot be side-lined. In a bid to increase economic diversification, boost productivity and improve income equity, the Government of India has established the Rashtriya Mahila Kosh (RMK) also known as the National Credit Fund for Women (NCFW). This is an autonomous body under the aegis of the Ministry of Women & Child Development.

1. Aims and objectives of Rashtriya Mahila Kosh

Through the Rashtriya Mahila Kosh, the government is looking to provide micro-credit assistance to women who belong to economically weaker sections. RMK is a facilitating agency that extends the monetary benefit through other Intermediary Microfinancing Organisations (IMOs) in a friendly and hassle-free manner, without the need for any collateral. This step has been taken to encourage women to take the entrepreneurial route.

Through IMOs and other Women Self Help Groups (WSHGs), the RMK aims to bring in all-round socio-economic development. They work to provide support schemes, improve amenities, facilitate networking groups for development, skill development as well as enterprise development and assistance in marketing.

Additionally, the RMK is looking to sensitise the government and other private agencies towards increasing the visibility of poor women. It also promotes experimentation in the formal sector to reach socially backward women with credit and other social benefits using innovative methods.

Related: Government’s social welfare and health schemes – are you eligible?

2. Loan schemes offered by Rashtriya Mahila Kosh

As mentioned, the RMK does not directly disburse the loans to the women. It does so through other IMOs and WSHGs working at the grass-root level. There are many different types of credit facilities, each with different eligibility criteria, maximum loan amounts, tenures and other specifications.

Women could avail loans for setting up a small business or shop, livestock rearing, transport services, etc. They could also take loans for building a house, education, marriage, retirement, as well as medical emergencies, natural calamities, etc.

Here are some of the loan schemes available for women:

  • Working capital term loan.
  • Loan promotion scheme.
  • Main loan scheme.
  • Franchisee scheme.
  • Housing loan scheme.
  • Family loan scheme.
  • Revolving fund scheme.
  • Refinance scheme.
  • Repeat loans.

At the beneficiary end, the cap on the loan amount is fixed at Rs 60,000 for new borrowers and Rs 100,000 for repeat borrowers (for the existing plus new loan).

RMK offers the loans to the IMOs and WSHGs at 6% per annum on a reducing balance basis, and the agency can forward the loan to the individual beneficiary at any rate on or above 6% per annum. This is subject to a maximum ceiling of 10% per annum on a reducing balance basis.

Related: Government initiatives for education and skills. How to apply for one? 

3. What sets Rashtriya Mahila Kosh apart from other credit organisations?

The RMK has a strong risk management process in place to minimise defaults. It conducts regular audits of the IMOs to ensure that they meet the criteria for disbursals. The IMOs also need to get adequate insurance to cover all assets created out of RMK's loan. Additionally, for loans in excess of Rs 50 lakh, the RMK insists on a 10% collateral in the form of a fixed deposit.

RMK strives to go beyond credit delivery for integrated development centred on the needs of impoverished women. It provides loans to women, literally at their doorstep without the need to run from pillar to post. It looks to assist the beneficiary by arranging capacity building training in collaboration with local IMO's for sustained employment.

The interest rate from 6% to 10% unlike other loans is calculated on a simple rate of interest and on reducing balance basis with a view to ease the debt burden.

As of January 2019, RMK had disbursed close to Rs 31,112 lakh to 7.4 lakh women beneficiaries across 28 states in the country through nearly 1500 IMOs.

RMK has a long trajectory to cover. However, this is a step in the right direction. Take a look at these 7 Government schemes to aid economic development and financial stability that you can benefit from.

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