16. Interest Subsidy Scheme of Ministry of New and Renewable Energy (MNRE) for purchase of Solar Water Heaters.

Objective :- To promote the widespread use of solar water heaters through a combination of financial and promotional incentives and other support measures.

Eligible Systems :- Water Heating Systems comprising of Flat Plate Collectors or Evacuated Tube Collectors (ETC).

Eligible Suppliers :- List of manufacturers are of BIS approved Solar Flat Plate Collectors and MNRE approved Evacuated Tube Collectors.

Eligibility for Loan :- All end users viz. Individual, Institution, Non-commercial organizations, or Commercial Organisations including Hotels, Hospitals etc. Association / Business establishment etc.

Loan Amount :- 85% of cost of the system – maximum amount to be restricted to the repayment capacity of the borrower as per Bank's policy / guidelines.

Rate of Interest :- Rate of interest for loans under the Scheme granted under general category is @ 10.75% p.a. For loans sanctioned under Priority Sector, appropriate interest rate will be applicable subject to maximum rate of 10.75% p.a.

Interest Subsidy :- Interest rate for the loans provided by the Ministry as per user category is :
- 2% p.a. to domestic users.
- 3% p.a. to institutional users (non-profit making and not-availing depreciation).
- 5% p.a. to industrial/commercial users availing depreciation.

MICRO CREDIT

1. Loans of very small amount not exceeding Rs. 50,000 per borrower provided by banks either directly or indirectly through a SHG/JLG mechanism or to NBFC/MFI for on-lending up to Rs. 50,000 per borrower.
2. Loans to poor indebted to informal sector
3. Loans to distressed persons (other than farmers) to prepay their debt to non institutional lenders, against appropriate collateral or group security, would be eligible for classification under priority sector.

SELF HELP GROUPS (SHGs)

A Self Help Group is a homogeneous group of the rural poor voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group from which small loans are given to the members for meeting their productive and emergent credit needs at such rate of interest, period of loan and other terms which the group may decide.

Objective
· To encourage banking activity both on thrift as well as credit.
· To evolve supplementary credit strategy for reaching rural poor.
· To build mutual trust and confidence between banks and the rural poor.

Quantum of Loan: · The proportion of savings to the loan could vary from 1:1 to 1:4 depending on the rating of the SHG by the Bank.

Security: 1. Inter Security Agreement by all members and 2. Articles of Agreement by authorised members.