The National Scheduled Castes Finance and Development Corporation (NSFDC), under the Ministry of Social Justice and Empowerment, has facilitated the establishment of a small flour milling business in Krishnagiri district, Tamil Nadu. Smt Akalya, who completed her diploma but struggled to find regular employment, used financial support from the NSFDC to launch her own enterprise and achieve self-sufficiency.
Her journey highlights how targeted government financing schemes can convert aspirations into working businesses for educated but underemployed individuals, particularly from scheduled castes communities.
Key facts
- Loan amount: Rs 1,80,000
- Scheme: Term Loan Scheme under NSFDC
- Interest rate: 6 per cent per annum
- Disbursing bank: Tamil Nadu Grama Bank
- Loan date: 20 January 2025
- Location: Krishnagiri district, Tamil Nadu
- Business type: Flour mill (atta chakki)
What is the NSFDC Term Loan Scheme
The National Scheduled Castes Finance and Development Corporation is a public sector financial institution that provides credit to members of scheduled castes for setting up income-generating activities. The Term Loan Scheme is one of its main lending products, designed to offer working capital and asset finance to individuals and groups wanting to start or expand small businesses.
The scheme targets those who have entrepreneurial ability but lack access to conventional bank finance or collateral. By providing affordable credit at concessional rates, NSFDC aims to promote economic independence among scheduled castes populations across the country.
Akalya’s path to self-employment
After finishing her diploma, Akalya faced the common challenge of many graduates in rural and semi-urban areas: limited job openings in the formal sector. Rather than remain unemployed, she identified an opportunity to set up a small flour milling unit, a business with steady local demand in agricultural regions.
However, capital was the barrier. Without savings or collateral to offer traditional lenders, she could not access a bank loan through normal channels. This is where the NSFDC stepped in. The corporation assessed her business plan, confirmed the viability of a flour mill operation, and approved a loan of Rs 1,80,000 at a reasonable interest rate of 6 per cent annually.
The loan was disbursed through Tamil Nadu Grama Bank, a regional rural bank that serves as a lending partner for NSFDC in the state. The transaction was completed on 20 January 2025.
How the loan enabled the business
The Rs 1,80,000 loan was sufficient to purchase grinding machinery and set up a flour mill (atta chakki) at her home. Operating from home reduced overhead costs such as rent and utilities, making the business more profitable from the start. The location also allowed her to balance household responsibilities while running the enterprise.
The affordable interest rate of 6 per cent meant her monthly repayment burden remained manageable relative to the income the mill generates. This competitive pricing is a feature of NSFDC lending, which subsidises interest costs to make credit accessible to those the formal banking system often overlooks.
Current status and impact
Akalya’s flour mill is now operational and generating regular income. The business allows her to support her family and meet their basic needs without depending on external employment. Beyond personal benefit, her mill provides a service to the local community by processing grains into flour, creating a small but meaningful economic contribution to Krishnagiri district.
What this means for you
If you are a diploma or degree holder from a scheduled castes background looking to start a small business but lack capital, the NSFDC Term Loan Scheme may be available to you. Loans are offered at interest rates lower than commercial banks typically charge, and the corporation does not demand elaborate collateral documentation.
Eligible activities include food processing, retail trade, small manufacturing, services and agriculture-related enterprises. You can approach an NSFDC partner bank in your state or contact the corporation directly to enquire about loan eligibility and application procedures.
Akalya’s example shows that with determination, a viable business idea, and access to appropriate financing, self-employment is a realistic path to economic independence in rural and semi-urban India.