The Government of India has come up with various initiatives to ensure that physically handicapped individuals or people with disabilities (PwD) have easy access to financial assistance.
Is there a loan facility for physically handicapped persons or a ‘handicapped loan’? Or is there a specific government aided loan for handicapped persons?
Continue reading to know more.
Many employers do not consider physically challenged individuals as an ideal candidate for employment which means their source of income is impacted. Which is why a loan facility for a physically handicapped person is not easily available.
But, there are many avenues for self-employment which a physically handicapped individual can make use of with the help of financial assistance from the Government.
There are a few government loan facilities for physically handicapped persons that can help them become more financially independent.
The National Handicapped Finance and Development Corporation (NHFDC) is a Government-owned organization under the Ministry of Social Justice and Empowerment.
NHFDC functions as an apex institution for channeling funds to physically challenged individuals through State Channelising Agencies (SCAs) nominated by the State Government(s).
Some of the important schemes offered by National Handicapped Finance and Development Corporation (NHFDC) for the physically handicapped or PwD are -
Divyangjan Swabhalaman Yojana
Vishesh Micro Finance Yojana (VMFY)
Educational Loans for Physically Handicapped
This is the flagship scheme of NHFDC. The main objective of this scheme is to assist PwD (People with Disabilities) by providing concessional loans for their economic and overall empowerment.
Under Divyangjan Swabhalaman Yojana, concessional credit is available for all those with a disability( as qualified by PwD Act 2016) for the following activities -
Activities contributing directly or indirectly to income generation or their overall empowerment
Pursuing higher education post class 12th (UG, PG, Professional courses and other courses approved by UGC/AICTE/ICAR/Government etc.)
Pursuing vocational or skill development (IT, Diploma any other course leading to better employment or self-employment)
Purchase of any assistive device(s)/customization/retrofitting or conversion of an available machine, equipment, vehicle into disabled-friendly mode
Any Indian citizen with 40% or more disability (Disability as defined in PwD Act, 2016 or its amendments).
Applicants should be above 18 years. However, in the case of persons with mental retardation, the eligible age would be above 14 years.
The rate of interest depends on the amount of the loan availed as given below.
Amount of the Loan Availed
Rate of Interest Charged Per Annum
Less than Rs 50,000
Rs 50,000 - Rs 5 Lakhs
Rs 5 - Rs 15 lakhs
Rs 15 lakhs - Rs 30 lakhs
Rs 30 lakhs -Rs 50 lakhs
A rebate of 1% in interest will be allowed for women with disabilities/persons with disabilities other than OH (orthopaedically handicapped) for self-employment loans of up to Rs.50,000/-
The maximum tenure offered is 10 years. Prepayment of the loan is also allowed without any prepayment penalty.
Reasonable collateral or security may be asked for availing the loan. The disbursing agencies may even co-opt family members of the applicants as co-borrowers. The assets and beneficiaries of the scheme will also be insured through various available government schemes.
NHFDC intends to reach out to the unbanked population of the target group by offering financial assistance at reasonable /moderate rates of interest. The aim of this scheme is to promote sustainable livelihoods that are also inclusive.
In order to do so, NHFDC has partnered with NBFCs, MFI, SHG Federations, State Govt Missions, etc to pursue small/micro business and developmental activities.
The eligibility conditions for availing funds under VMFY will be the same as the ones followed by SIDBI (Small Industries Development Bank of India) or NABARD (National Bank for Agriculture and Rural Infrastructure Development Fund).
Maximum finance allowed is Rs.60,000/-.
NHFDC's share shall be up to 90% of the project cost. The balance 10% will be contributed by Implementing Agencies or other organizations, and/or beneficiaries.
The rate of interest would be 12.50 % p.a.
The maximum tenure of the loan can be 3 years. In addition, a period of 120 days is allowed for fund utilization. There shall not be any moratorium period for payment of interest.
Any Indian national with 40% disability could apply for an educational loan to pursue higher education in India or abroad
Loan quantum that is available is Rs 10 lakh for studies in India and Rs 20 lakh for studies abroad
Rate of interest charged is 4% p.a with a rebate of 0.5% for female students
Tenure of the loan is as follows -
The loan to be repaid within 7 years after commencement of repayment
The repayment as per schedule would commence one year after completion of the course or 6 months after securing a job, whichever is earlier
Interest on term loan would be charged from the date of disbursement of loan by NHFDC (grace period as per lending policy is permissible)
NHFDC allows various channels to avail their loan facility as given below -
Apply through State Channelising Agencies
You can apply for a business loan or an educational loan for the handicapped through the State Channelising Agencies that are appointed by the State Govts or Union Territories.
Projects up to Rs. 10 lakh is sanctioned by State Channelising Agency and projects that cost over Rs. 10 lakh is sanctioned by NHFDC
Nationalised Banks/ Regional Rural Banks
The National Handicapped Finance and Development Corporation extends a loan to PwD through Punjab National Bank, Andhra Bank, IDBI Bank and also through Regional Rural Banks in the State of Haryana, Gujarat, Uttar Pradesh and Uttaranchal.
You could also choose to submit the application through NGOs in the field. They will, in turn, forward the application to the respective State Channelising Agency to help you avail the loan
The documents that are required for availing a loan from NHFDC are -
Loan Application form that can be obtained from implementing agencies or may be downloaded from NHFDC.
The other supporting documents needed would be
Approved Identity Proof
Unique Disability ID or Disability Certificate issued by the competent authority
Proof of educational qualifications
While loans from the government are extremely helpful, if you need a loan urgently and do not want to go through cumbersome application process, you can always avail a personal loan.
Money View offers instant online personal loans of upto Rs. 5 lakh to all individuals meeting their simple eligibility criteria. The physically challenged can avail these loans from the comfort of their homes without having to make multiple trips to the banks/financial institutions.