The National Backward Classes Finance and Development Corporation (NBCFDC), a government agency under the Ministry of Social Justice and Empowerment, has announced concessional loan schemes for members of notified Other Backward Classes seeking to start income-generating businesses or pursue higher education. The corporation provides financial assistance through state channelising agencies and banks to eligible applicants from backward classes communities.
Key facts
- Individual loans: up to ₹25 lakh for income-generating activities
- Education loans: up to ₹25 lakh at 8% interest per annum
- Family income ceiling for eligibility: ₹5 lakh annually
- Interest rate for loans up to ₹1.25 lakh: 7% per annum
- Interest rate for loans above ₹1.25 lakh to ₹25 lakh: 8% per annum
- Education loan repayment period: up to 10 years including moratorium
- Maximum financing of project cost: 85% for individual loans, 90% for group loans
- Group Loan Scheme: up to ₹25 lakh per group with ₹1.25 lakh limit per member
- NBCFDC establishment date: 13 January 1992
Individual Loan Scheme for self-employment
The NBCFDC Individual Loan Scheme provides funds to members of notified Other Backward Classes who wish to establish or expand income-generating activities. Members from families earning up to ₹5 lakh per year can apply for loans. The corporation will finance up to 85 per cent of the project cost, with a maximum loan amount of ₹25 lakh per beneficiary.
The interest rate charged depends on the loan size. For loans of ₹1.25 lakh or less, the rate is 7 per cent per annum. For larger loans between ₹1.25 lakh and ₹25 lakh, the rate increases to 8 per cent per annum. Additionally, the NBCFDC offers an annual timely payment rebate of 1 per cent, which is divided equally between the channel partner bank or agency and the borrower, effectively reducing the interest burden for those who repay on schedule.
Education loan facility
Recognising the importance of education in economic mobility, the NBCFDC provides dedicated education loans up to ₹25 lakh at a concessional interest rate of 8 per cent per annum. Borrowers can repay these loans over a period of up to 10 years, with a built-in moratorium period during which principal repayment is deferred. This extended repayment window is designed to accommodate students who need time to complete their education and secure employment before beginning regular repayments.
Group Loan Scheme for collective enterprise
For groups of entrepreneurs, the NBCFDC offers the Group Loan Scheme. Self-help groups can borrow up to ₹25 lakh in total, though individual members within the group are limited to ₹1.25 lakh each. Group loans can cover up to 90 per cent of the project cost at an interest rate of 7 per cent per annum. To qualify, at least 60 per cent of group members must belong to notified backward classes, while other members may belong to eligible weaker sections. Like individual loans, group loans also benefit from the 1 per cent annual timely payment rebate.
How to apply
Applicants can access NBCFDC loans through state channelising agencies or commercial banks designated as channel partners in their districts. The corporation has also created an online registration portal on its website at www.nbcfdc.gov.in/nbcfdc/web/, where interested candidates can submit applications and find detailed scheme information. Prospective borrowers should approach their district’s channel partner or use the online portal to begin the application process.
What this means for you
If you belong to a notified Other Backward Class community and your family income is within the ₹5 lakh ceiling, these schemes offer an accessible route to starting a business or pursuing higher education. The concessional interest rates and extended repayment periods make borrowing more affordable than conventional bank loans. The rebate for timely payment provides additional incentive to maintain regular repayments. For students, the education loan with its 10-year repayment window can make higher education financially feasible even without immediate employment prospects.