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Deendayal Antyodaya Yojana (DAY)-National Urban 

Livelihoods Mission (NULM): Self-Employment Programme 

(SEP): Component 4  

Name of NULM changed to DAY-NULM.  

The Government of India, Ministry of Housing and Urban 

Poverty Alleviation (MoHUPA) has restructured the Swarna 

Jayanti Shahari RozgarYojana (SJSRY) and launched the 

National Urban Livelihoods Mission (NULM) w.e.f. September 

24, 2013 in all district headquarters (irrespective of 

population) and all the cities with population of 1 lakh or 

more. 

NULM -Self Employment Programme (SEP) is implemented in 

our Bank and will focus on providing financial assistance 

through a provision of interest subsidy on loans to support 

establishment of Individual, including street 

vendors/hawkers of urban poor for setting up gainful self-

employment ventures/micro-enterprises, suited to their 

skills, training, aptitude and local conditions.  

The programme also supports Group Enterprises and Self-

help Groups (SHGs) of urban poor. 

 

  

The erstwhile provision of capital subsidy for USEP (Urban 

Self Employment Program) and UWSP (Urban Women Self-

Help Program) under SJSRY has been replaced by interest 

subsidy for loans to Individual enterprise (SEP-I),Group 

enterprise (SEP-G) and Self Help Groups (SEP-SHGs). 

Type of Subsidy: 

Interest Subsidy, being interest charged over and above 7% 

rate of interest, will be available for the term loans granted 

under Individual Enterprises (SEP-I) and Group Enterprises 

(SEP-G). 

Interest subsidy will be given only in case of timely 

repayment of loan. 

An additional 3% interest subvention will be provided to all 

Women SHGs (WSHGs) who repay their loan in time. 

Loans granted under NULM (SEP-I, SEP-G and SHG) are 

eligible to be covered under appropriate guarantee cover. 

Loans granted under NULM scheme to be classified as 

advances to weaker section under priority sector. 

Finance can be extended to individuals for capital 

expenditure in the form of Term Loan and Working Capital 

loans through Cash Credit. Composite Loans can also be 

extended consisting of Capital Expenditure and Working 

Capital components, depending upon individual borrower’s 

requirement. 

Cases recommended by task force have to be processed by 

the Bank with in a time frame of 15 days. 

Updation of Mobile Numbers in all eligible accounts – 

mandatory field for claiming interest subvention through 

the portal. 

Loans to beneficiaries for carrying out Retail Trade activity 

can be permitted under NULM, without insisting on 

collateral security, subject to fulfillment of the eligibility 

conditions. 

Only need based finance should be extended and to be 

covered under CGTMSE as per revised guidelines where cover 

is available to retail trade up to Rs.100 lakhs. 

Selection Of beneficiaries: 

The application for individual and group enterprise loans will 

be sponsored by the Urban Local Body (ULB). 

Selection Of beneficiaries in the town would be done as per 

following guidelines: 

Women beneficiary - 30% 

SCs & STs - at least to the extent of the proportion of their 

strength in the city/town population 

Differently abled - 5% 

Minority Community - 15% 

Educational Qualifications: No minimum educational 

qualification is required for prospective beneficiaries under 

this component. However where the identified activity for 

micro enterprise development requires some special skills 

appropriate training must be provided to the beneficiaries 

before extending financial support by linking for training 

under Em- ployment through Skills Training and Placement 

(EST&P). 

Financial assistance should be extended only after the 

prospective beneficiary has acquired required skills for 

running the proposed micro-enterprise. 

  

In addition to skill training of the beneficiaries, the ULB will 

also arrange to conduct Entrepreneurship Development 

Programme for 3-7 days for individual and group 

entrepreneurs. 

Project Cost: The Maximum Project Cost for individual 

micro-enterprises cases is Rs.2,00,000/- (Rupees Two Lakhs) 

and The Maximum unit Project Cost for a group enterprise 

is Rs.10,00,000 /- (Rs. Ten Lakhs). 

No collateral required. Only the assets created would be 

hypothecated / mortgaged / pledged to banks for advancing 

loans. 

Margin: For loan upto Rs.50000 Nil, 

For loan above Rs.50000 Minimum 5 % and maximum 10 % 

The group enterprises (SEP-G) should have minimum of Three 

(3) major (above 18) members with a minimum of 70% of the 

members from urban poor families. More than one person 

from the same family should not be made a member of a 

group. 

Repayment– 5 years inclusive of maximum moratorium of 6 

months for Individuals and for groups repayment schedule 

ranges between 5-7 years after initial moratorium of 6 

months. 

Under SEP-G, Loan can be extended either as a single loan to 

the group functioning as one borrowing unit or each member 

of the group can be provided individual loans upto 2 lakhs 

and an overall cap of 10 lakhs based on the principal of joint 

liability of the group

  

Lending to SHGs : 

Opening of savings bank account of Self Help Groups 

(whether registered or unregistered) which are engaged in 

promoting habit of savings among their members as a 

starting point. Thereafter, the SHGs may be sanctioned 

Savings Linked Loans (varying from a saving to loan ratio of 

1:1 to 1:4) after due assessment of grading. 

However, in case of matured SHGs, loans may be given 

beyond the limit of four times the savings as per the 

discretion of the bank. 

Identification, selection, formation and monitoring of SHGs 

who are to get interest subvention would be the 

responsibility of State/ULBs and Bank would not be liable for 

wrong identification of SHGs who gets interest subvention. 

SHGs can avail either Term loan or a Cash Credit Limit loan 

or both based on their needs. In case of need, additional loan 

can be sanctioned even though the previous loan is 

outstanding. 

Prompt Repayment from SHGs: 

For Cash Credit limit to SHGs- 

Outstanding balance shall not have remained in excess of 

the sanctioned limit / drawing power continuously for more 

than 30 days. 

There shall be regular credits and debits in the account. In 

any case there shall be at least one customer induced credit 

during the month which shall be sufficient to cover the 

interest debited during the month. 

  

For Term loan to SHGs- a term loan account where all of the 

interest payments and /or installments of principal were 

paid within 30 days of the due date during the entire tenure 

of the loans would be considered as an account having 

prompt payment.

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