North Eastern Development Finance Corporation (NEDFi)

North Eastern Development Finance Corporation (NEDFi) is a Public Limited Company registered under the Companies Act, 1956 and also registered as an NBFC with RBI. NEDFi offers financial support to MSMEs and large enterprises for setting up infrastructure, industrial and agri-allied projects in the North Eastern Region of India.

NEDFi also provides microfinance funding through Micro Finance Institutions (MFIs) and Non-Government Organizations (NGOs). The corporation provides consultancy and advisory services to private sectors, State Governments and other agencies. Under its Techno-Economic Development Fund (TEDF), NEDFi also conducts sector or state specific studies.

Also Read- What is Mudra Scheme? What is the process and eligibility criteria to avail this loan?

NEDFi Financial Products & Schemes

NEDFi offers a range of financial products and schemes for the development of North East region of India which are as follows:

 

Rupee Term Loan (RTL) Scheme

This scheme provides medium to long-term funding for setting up new projects or expansion of existing projects in manufacturing and services sectors.

The proposed unit should be located within any of the eight North-eastern states of India. The term loan is offered for the creation of fixed assets that shall create revenues for the unit.

Features

• Interest Rate: Prime Lending Rate (PLR) + maximum spread of 3% per annum
• Loan Amount: Maximum loan of up to 12% of its Net worth in a single project
• Promoter’s Contribution: Minimum of 35%-40% of the total project cost
• Up-front fee: 1% of the loan amount for loans upto Rs.10 crore and 0.75% for loans above Rs.10 crore
• Primary Security: Assets of the unit
• Repayment Period: From 5 year – 8 years, excluding moratorium period
• Debt Equity Ratio: Maximum of 1.85: 1
• Documents Required: As per the norms of the Corporation

Equipment Finance Scheme

This scheme provides funding support for acquiring equipment/machinery by financially strong companies with good credit score.

Eligibility:

• Location of the unit should be within eight North-eastern states
• Financially strong companies with existence of minimum 5 years in the same industry and making profit for last 3 years
• Loan shall be offered in the creation of fixed assets that shall generate revenue in future

Equipment Finance Scheme is not available in the following cases:

• In-house fabrication of equipment or machinery
• Acquisition of second hand equipment or machinery
• Grass root projects
• Reimbursement of the cost of machinery or equipment

Features

Loan Amount

Maximum 70% of cost of equipment + taxes, duties, and installation and transportation charges

Minimum Rs. 25 lakh & Maximum Rs. 10 crore

Interest Rate: Prime Lending Rate (PLR) + maximum spread of 3% per annum

Promoters’ contribution: Minimum of 30% of the cost of equipment proposed to be acquired

Debt Equity Ratio: Maximum 2.33:  1

Up-front fee:  1% of the loan amount

Repayment tenure: Maximum up to 6 years, including moratorium period

Corporate Finance Scheme

Under this scheme, funding is offered for various purposes, such as capital expenditure, to meet working capital requirements, improving cash flow, debt consolidation and corporate purposes.

Eligibility Criteria

• Minimum net worth of a unit should be Rs. 5 crore which can be lowered to Rs. 3 crore depending on the merit
• Minimum 5 years of operations with 3 year of profitable operations
• Good track record with banks and financial institutions

Features

Loan Amount: Minimum Rs.50 lakh and maximum, as per the norms of the Corporation

Long Term Debt to Equity (DER): Maximum = 1.25:  1

Current Ratio: 2: 1

Interest Cover: Minimum 2: 1

Repayment Tenure: Up to 5 years, including moratorium period

Security:

• Adequate collateral security
• Corporate guarantee of the group companies
• Escrow of receivables of good corporates
• Minimum security margin of 25%

Working Capital Term Loan Scheme

This scheme provides one-time funding assistance in form of working capital term loans.

Features

Loan Amount: Upto a Maximum of 75% of the working capital requirements

Interest Rate: Prime Lending Rate (PLR) + maximum spread of 3% per annum

Upfront fee:  1% of the loan amount for loans up to Rs.10 crore and 0.75% for loans above Rs.10 crore

Repayment Tenure: 1 bullet repayment after a period of 18 months

Security:

• Collateral security, if necessary
• Personal Guarantee of Promoter(s)
• First charge by way of hypothecation of current assets
• Charge on fixed assets of the unit
• Corporate Guarantee of Group Companies, if necessary

 

Micro Finance Scheme

Micro Finance Scheme offered under NEDFi is offered for entrepreneurs, self-employed personnel, small and mid-sized agriculturists, etc. Micro Finance can be instantly used for business related purposes and can be reached effectively to the North eastern India with ease of access.

Eligibility Criteria

• Business existence for at least 3 years
• MFIs with good credibility and performance work
• Should have experience in developing SHG/JLGs
• Should maintain proper system of book keeping

Features

• MFIs should use the funds only for the Income generation activities of the borrowers
• Interest Rate: Prime Lending Rate (PLR) + 0.5% (administrative charge)
• Processing fee: 1% of loan amount
• MFI shall have to obey with RBI norms

Repayment period: Maximum 5 years, including moratorium

Collateral: Should be provided in proportionate percentage of loan amount

Security:

• NGO’s Promissory note
• Hypothecation of NGO’s all the movable assets
• Chief functionaries’ Personal Guarantee

Documents Required: Deed of Hypothecation, Loan Agreement & Promissory Note

 

Since 2001, NEDFi is an ISO 9001:2008 certified company that promotes economic development of North Eastern Region of India by identifying and financing commercially viable projects in the North East region of India.

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