Frequently Asked Questions
NBFC means a non-banking financial company that performs functions similar to banks in the absence of banks in rural areas. MFI means for microfinance institutions which operate at a further smaller level than NBFC. MFI provides very small loans to the underprivileged sections of society.
Microfinance companies are non-banking finance (NBFC) companies registered with Reserve Bank of India (RBI) that provide short term loans to people at lower interest rates than primary lenders.
WHITE-ELEPHANT is providing loans on the interest rate from 19.65% – 21.65% on Reducing Balance.
The different types of microfinance loans include Self Help Group (SHG), Joint Liability Group (JLG), The Grameen Bank Model and Rural Cooperatives.
WHITE-ELEPHANT shall meet the requirement of those customers by extending an individual loans, as the group lending model does not work effectively beyond a certain loan amount. WHITE-ELEPHANT shall build a seamless experience in giving individual loans to graduating JLG customers.
WHITE-ELEPHANT provides JLG loans from 5,000/- up to Rs. 80,000/- .
JLG is a group of 4-10 small farmers, rural entrepreneurs, people of the same village/locality having the same socioeconomic background. The JLG is formed with the purpose of availing loan from a microfinance company without any collateral.
AHMEDABAD, India
NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:
i. NBFC cannot accept demand deposits;
ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
iii. deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
A Joint Liability Group (JLG) is an informal group comprising of 4-10 individuals coming together for the purpose of availing bank loan on individual basis or through group mechanism against mutual guarantee. Generally, the members of a JLG would engage in a similar type of economic activity.
The group-lending model of microfinance is a development intervention in which small-scale credit for income-generation activities is provided to groups of individuals especially women, who do not have material collateral.
