Tamil Nadu Group Loan Scheme: ₹15 Lakh Business Loan

Introduction of Tamil Nadu Group Loan Scheme: A Brief Insight

Starting a small business can be difficult when a person has limited savings. However, members of a Self Help Group (SHG) can pool their experience, savings and efforts to build a business together. The Group Loan Scheme (GLS) provides financial assistance to such groups, helping them turn a shared business idea into an income-generating activity.

The Tamil Nadu Backward Classes Economic Development Corporation (TABCEDCO) offers this scheme in association with the National Backward Classes Finance and Development Corporation (NBCFDC). TABCEDCO acts as the channelising agency for NBCFDC funds and provides financial assistance to eligible groups belonging to the backward communities in Tamil Nadu.

The Group Loan Scheme under the Backward Classes, Most Backward Classes and Minorities Welfare Department, Tamil Nadu is implemented through TABCEDCO. The Project Officers of Mahalir Thittam grade the Self Help Groups, while the designated co-operative banks and societies handle the loan process.

The scheme aims to help SHG members establish small businesses and undertake income-generating activities collectively. It encourages self-employment, reduces dependence on informal moneylenders and creates better livelihood opportunities for economically weaker sections of society.

Under the scheme, each eligible member can receive a loan of up to ₹1,25,000, while the maximum loan limit for an entire group is ₹15 lakh. The annual interest rate is 6%, and the group gets 2.5 years to repay the loan. NBCFDC finances 90% of the loan amount, while TABCEDCO contributes the remaining 10%. As per the scheme details, the beneficiary contribution is 0%.

Groups can use the loan to establish micro-enterprises, handicraft units, agricultural activities and small shops that their members operate together. The scheme accepts Self Help Groups formed by women, men and transgender persons, with a maximum membership of 20 members.

To qualify, a group must have completed at least 6 months from its formation, and at least 60% of its members must belong to the Backward Classes (BC), Most Backward Classes (MBC) or Denotified Communities (DNC). The Project Officer of Mahalir Thittam must also grade the group. Each participating member must be between 18 and 60 years of age and have an annual family income of up to ₹5,00,000.

The group appoints a team leader who registers the SHG and its members on the TABCEDCO portal and submits the loan application on their behalf. Groups can also apply through a printed form available at designated offices. After receiving the application, the concerned co-operative bank or society handles the loan processing and sanction. For assistance, applicants can contact the TABCEDCO Head Office at Egmore, Chennai, on 044-28190122.

Individuals planning to start or expand their own businesses can explore the Individual Loan Scheme, while dairy farmers looking for financial assistance to purchase milch animals can refer to the Milch Animal Loan Scheme. Groups and aspiring entrepreneurs can also explore the State’s New Entrepreneur-cum-Enterprise Development Scheme (NEEDS) and the Central Government’s PM Mudra Yojana for other business financing opportunities.

Self Help Groups, women, artisans, small traders and other residents looking for financial assistance or livelihood opportunities can explore more welfare programmes through our Tamil Nadu Government Welfare Schemes page.

Benefits Provided to Eligible Beneficiaries

Starting a business becomes easier when people pool their savings, skills and efforts. The Group Loan Scheme (GLS) of the Tamil Nadu Government offered by TABCEDCO in association with NBCFDC, provides financial support to Self Help Groups (SHGs) so their members can undertake income-generating activities collectively. Its low interest rate and group-based lending structure help members access credit without depending on informal moneylenders.

Loan Amount for Each Member and the Group

• Each eligible member can receive a loan of up to ₹1,25,000.
• The maximum loan available to an entire Self Help Group is ₹15,00,000.
• For example, if 12 members receive ₹1,25,000 each, the total loan amount reaches ₹15 lakh. A group with 20 members can also distribute the same maximum amount among its members according to their requirements.

Low Interest Rate and Repayment Period

• The scheme offers loans at an annual interest rate of just 6%.
• The group gets a repayment period of 2.5 years to repay the loan.
• The affordable interest rate and defined repayment period help SHGs plan their business expenses and repayments.

Financing Without a Beneficiary Contribution

• NBCFDC provides 90% of the loan amount, while TABCEDCO contributes the remaining 10%.
• As per the scheme details provided, the beneficiary contribution is 0%, so members do not need to arrange a separate share of the loan amount.

Financial Support for Group Business Activities

• Members can use the loan to establish or expand a small trade or business operated collectively by the group.
• Eligible activities may include micro-enterprises, handicraft units, agricultural activities and small shops.
• The group can use its collective experience, skills and savings to develop an income-generating activity.

Encouragement for Self-Employment and Financial Independence

• The scheme provides access to affordable institutional credit and reduces dependence on informal moneylenders.
• It supports Self Help Groups formed by women, men and transgender persons.
• Groups with up to 20 members can work together, share responsibilities and build a common business.
• It encourages self-employment and creates opportunities for economically weaker communities to participate in income-generating activities.

Simple Group-Based Application Process

• The SHG can appoint one team leader to register the group and its members on the TABCEDCO portal.
• Members can submit a joint application instead of approaching the corporation separately.
• Application forms are available free of cost at the TABCEDCO Head Office, district offices, Joint Registrar offices, Co-operative Credit Societies and District Co-operative Banks.
• Co-operative banks and societies process the loans, making the institutional lending process accessible to groups in their respective areas.

Eligibility Conditions Required to be Fulfilled

The Government of Tamil Nadu’s Group Loan Scheme (GLS), offered by TABCEDCO in association with NBCFDC, considers the eligibility of both the Self Help Group (SHG) and its individual members. The group must meet the prescribed conditions related to its formation, membership and grading, while every participating member must satisfy the age and family income limits. Check the following requirements before submitting an application.

Eligibility Conditions for the Self Help Group

• The applicant group must be a Self Help Group (SHG) formed by women, men or transgender persons.
• The group must have completed at least 6 months from its date of formation.
• The group must have a minimum of 2 members and a maximum of 20 members.
• At least 60% of the total members must belong to the Backward Classes (BC), Most Backward Classes (MBC) or Denotified Communities (DNC).
• The Project Officer of Mahalir Thittam must grade the group and certify its suitability for receiving a loan.
• The group must propose a small business or income-generating activity that its members will undertake collectively. Eligible activities may include micro-enterprises, handicrafts, agricultural activities and small businesses.
• The members must select a team leader to register the SHG and its members on the application portal.

Eligibility Conditions for Individual Members

• Each participating member must be between 18 and 60 years of age.
• The annual family income of a member must not exceed ₹5,00,000.
• Only one member from a family can receive a loan under the scheme.
• A member cannot avail of more than one TABCEDCO scheme at the same time.
• Each member can receive a loan of up to ₹1,25,000, subject to the overall group loan limit of ₹15 lakh.

Loan-Related Conditions

• NBCFDC provides 90% of the loan amount, while TABCEDCO contributes the remaining 10%. The scheme page does not specify any separate contribution from the beneficiary.
• The loan carries an annual interest rate of 6%, with a repayment period of 2.5 years.
• The loan is processed through District Central Co-operative Banks, Urban Co-operative Banks, Urban Co-operative Credit Societies or Primary Agricultural Co-operative Credit Societies.
• The financing institution may ask the group to provide security according to its applicable lending rules.

Who Is Not Eligible?

• Self Help Groups that have not completed 6 months from their formation.
• Groups that have not received the required grading from the Project Officer of Mahalir Thittam.
• Groups with fewer than 2 or more than 20 members.
• Groups in which less than 60% of the members belong to the BC, MBC or DNC communities.
• Members below 18 years or above 60 years of age.
• Members whose annual family income exceeds ₹5,00,000.
• Individuals seeking financial assistance for a business they intend to operate independently. They may check the Individual Loan Scheme instead.
• Applicants seeking financial assistance to purchase milch animals. They may check the Milch Animal Loan Scheme instead.

Documents Required to be Attached

The Tamil Nadu Government’s Group Loan Scheme (GLS), offered by TABCEDCO in association with NBCFDC, provides loans to Self Help Groups (SHGs) rather than individual applicants. Therefore, the application requires two sets of documents: one covering the group and another containing the required papers of every participating member. The team leader should collect and arrange these documents before starting the application process.

Documents Required from the Self Help Group

• Proof of the SHG’s formation and registration, showing that the group has completed at least 6 months
• Grading certificate issued by the Project Officer of Mahalir Thittam
• List of group members mentioning their names, ages and communities, with a maximum of 20 members
• Group resolution signed by the members, approving the loan application and authorising the team leader
• Details of the team leader responsible for registering the group and its members on the portal
• Bank account details of the SHG’s savings account, including the account number and IFSC code
• Records of the group’s savings and internal lending activities

Documents Required from Every Member

• Copies of Aadhaar Card, PAN Card, Community Certificate, Income Certificate, Nativity Certificate and Smart Family Card of each member
• Recent passport-size photograph of every participating member
• Details of the loan amount required by each member, subject to the individual limit of ₹1,25,000

Documents Related to the Group’s Business

• Scanned copy of the project report explaining the trade or business activity that the group plans to undertake
• Quotation from a recognised company or seller for the required goods, machinery or raw materials
• Details of the proposed business location, such as a shop, shed or shared workspace
• Details of how the group will divide work responsibilities and share the business profits among its members

Documents Required by the Bank

• Hypothecation or mortgage documents, wherever required by the financing bank or credit society
• Any additional documents requested by the District Central Co-operative Bank, Urban Co-operative Bank or Primary Agricultural Co-operative Credit Society processing the loan

Application-Related Documents

• Completed TABCEDCO Group Loan Scheme application form, signed by the participating members
• Acknowledgement slip issued by the office or institution receiving the application

How Beneficiaries Can Apply to Avail the Benefit of this Scheme

Under the Group Loan Scheme (GLS), the Self Help Group (SHG) applies for the loan as a team. One member acts as the team leader and completes the application formalities on behalf of the group. Before applying, the members must prepare their business plan, complete the required grading process and collect everyone’s documents.

The group can submit its application online through the TABCEDCO portal or use a printed form available at the designated offices. Here is how to complete the process step by step.

Step 1: Prepare Your Self Help Group

First, sit together with all the members and make sure your group meets the basic conditions of the scheme.

Step 1: Count all the members. Your group must have no more than 20 members.

Step 2: Check the formation date of your group. It must have completed at least 6 months.

Step 3: Make sure that at least 60% of the members belong to the BC, MBC or DNC communities.

Step 4: Check the age and family details of every member. Each member must be between 18 and 60 years old, and only one person from a family can receive a loan.

Step 5: Decide what business the group wants to start or expand. All members should understand the activity and agree to work together.

Step 6: Calculate how much money the group needs. Remember that one member can receive up to ₹1,25,000, while the maximum loan for the entire group is ₹15 lakh.

Step 7: Prepare a written resolution stating that the group has agreed to take the loan. All members must sign this resolution.

Step 8: Select one member as the team leader. This person will handle the registration, application and communication with the concerned offices.

Step 9: Read the official Tamil Nadu Group Loan Scheme details and the TABCEDCO Loan Eligibility Guidelines before moving ahead.

Step 2: Get Your Group Graded by Mahalir Thittam

After preparing the group, the next task is to obtain its grading certificate. The Project Officer of Mahalir Thittam checks the group’s activities and records to assess whether it is suitable for receiving a loan.

Step 1: Visit the office of the Project Officer of Mahalir Thittam in your district.

Step 2: Request the officer to grade your Self Help Group for the TABCEDCO Group Loan Scheme.

Step 3: Show the group’s formation documents, savings records, internal lending details and other required papers.

Step 4: Once the grading process is complete, collect the certificate and keep it safely with the other application documents.

Remember, the group must obtain the required grading before it can proceed with the loan application.

Step 3: Submit the Application Online Through the Team Leader

TABCEDCO provides an online portal where the team leader can register the group and submit its loan request. The group should keep all documents ready before opening the portal.

Step 1: Open the TABCEDCO Online Loan Application Portal using a mobile phone or computer.

Step 2: Register the Self Help Group and its participating members by entering the information requested on the portal.

Step 3: Log in using the registered details. Select the Group Loan Scheme (GLS) from the available scheme options.

Step 4: Enter the group’s details, including its name, number of members and proposed business activity.

Step 5: Mention the total loan amount required and the amount requested by each member.

Step 6: Upload the scanned documents. These include the group’s registration and grading papers, resolution, identity and income documents of members, project report and relevant quotations.

Step 7: Review the application carefully. Ask the members to check their personal details and loan requirements before the team leader submits the form.

Step 8: After submission, save the application details. The team leader can log in again to check the application status and share updates with the other members.

Step 4: Apply Offline Using a Printed Form

Groups that cannot complete the online process can submit a printed application. TABCEDCO provides application forms free of cost through its offices and designated co-operative institutions.

Step 1: Download and print the TABCEDCO Loan Application Form. You can also collect a free copy from the concerned office.

Step 2: Visit any of the following offices to obtain guidance and the application form:

• TABCEDCO Head Office, Egmore, Chennai.
• District Backward Classes and Minorities Welfare Officer or Regional Manager. You can find the relevant details on the District Welfare Offices Directory.
• Joint Registrar of Co-operative Societies. Check the Joint Registrar Offices Directory to locate an office.

Step 3: You can also approach a nearby Co-operative Credit Society or District Co-operative Bank and ask for the group loan application form.

Step 4: Confirm with the concerned office whether it requires a separate application form for the Self Help Group.

Step 5: Fill in the form with the group’s details, names of its members, proposed business activity and required loan amount.

Step 6: Get the required signatures from the members and attach the grading certificate, group resolution, individual documents, project report and other supporting papers.

Step 7: Submit the complete application to the concerned office, co-operative society or bank. Do not leave without collecting an acknowledgement slip as proof of submission.

Step 5: Complete the Loan Verification and Sanction Process

Submitting the application does not mean that the loan has been approved. The concerned financing institution checks the group’s application and completes the required formalities before sanctioning the loan.

Step 1: Your application will be handled through the concerned District Central Co-operative Bank, Urban Co-operative Bank, Urban Co-operative Credit Society or Primary Agricultural Co-operative Credit Society, as explained on the TABCEDCO Loan Sanction Guidelines.

Step 2: If the bank officer asks questions about the proposed business or group activities, the members should provide the required information together.

Step 3: Submit any additional documents or security papers requested by the financing institution under its applicable rules.

Step 4: Wait for the institution to complete its verification and communicate the loan decision.

Step 5: If the loan is sanctioned, read the loan agreement, repayment conditions and other terms with all members before signing the documents.

Step 6: After receiving the loan, use the money for the approved business activity. Maintain proper records of purchases, expenses and the group’s income.

Step 7: Repay the loan within the prescribed period of 2.5 years. The members should decide how they will arrange their respective repayments and ensure that the group pays on time.

Step 6: Contact TABCEDCO If You Need Assistance

If your group faces difficulty with registration, grading or the application process, contact TABCEDCO through the following details:

• Telephone: 044-28190122, 044-28190145
• Email: tabcedco@tn.gov.in
• Official Contact Page: TABCEDCO Contact Details

Important: The application form is available free of cost. Do not pay an unauthorised person for obtaining a form or promising loan approval. A person who wants financial assistance for an independently operated business can explore the Tamil Nadu Individual Loan Scheme. Applicants planning to purchase milch animals can check the Tamil Nadu Milch Animal Loan Scheme.

Three TABCEDCO Loan Schemes: Which One Should You Choose?

TABCEDCO offers three different loan schemes to support self-employment, group businesses and dairy activities. Although applicants can access these schemes through the same portal, each loan serves a different purpose. The right choice depends on whether you want to run a business independently, start an activity with a Self Help Group or purchase milch animals for dairy farming.

Which scheme should you choose? If you want to establish or expand a business on your own, consider the Individual Loan Scheme. If you are part of a graded Self Help Group and plan to run a business collectively, the Group Loan Scheme is the relevant option. If you are a member of a Milk Producer Co-operative Society and want to purchase cows or buffaloes, consider the Milch Animal Loan Scheme.

Important Links Available of the Scheme

• Tamil Nadu Group Loan Scheme (GLS): Official Scheme Details and Loan Benefits for Self Help Groups
• TABCEDCO Online Application Portal: Register Your Self Help Group and Apply for a Loan
• Download TABCEDCO Group Loan Scheme Application Form (PDF)
• Group Loan Scheme Eligibility Conditions, Application Process and Required Documents
• TABCEDCO Loan Sanction Process Through Co-operative Banks and Societies
• NBCFDC Loan Schemes Implemented Through TABCEDCO in Tamil Nadu
• National Backward Classes Finance and Development Corporation (NBCFDC), Official Website
• District Backward Classes and Minorities Welfare Offices, Tamil Nadu
• District-Wise Joint Registrar of Co-operative Societies Office Directory
• TABCEDCO Official Website, Tamil Nadu Backward Classes Economic Development Corporation

Contact Details in Case of Help Needed

• Head Office: The Managing Director, Tamil Nadu Backward Classes Economic Development Corporation Limited (TABCEDCO), 1/1 (1), Mayor Ramanathan Salai (East), Near Gengu Reddy Subway, Egmore, Chennai – 600008
• Phone: 044-28190122, 044-28190145
• Email: tabcedco@tn.gov.in, tabcedco@gmail.com
• Grading Office: The Project Officer of the Mahalir Thittam in your district, who grades your Self Help Group before it applies
• District Office: The District Backward Classes and Minorities Welfare Officer or the Regional Manager of TABCEDCO in the Collectorate, who gives the forms and guides the team leader
• Co-operative Office: The Joint Registrar of Co-operative Societies of your region, who also gives the forms
• Bank Level: The District Co-operative Bank, the Urban Co-operative Bank or the Co-operative Credit Society near your village, which takes the application and gives the loan to the group

Frequently Asked Questions (FAQs)

Tabassum

Tabassum is a government schemes researcher and writer with 5 years of experience tracking Central and State welfare scheme programmes across India. She has covered 500+ schemes spanning agriculture, women welfare, education, and housing, helping lakhs of beneficiaries understand their entitlements in simple language.