The Cabinet on Tuesday approved increasing the National Minorities Development & Finance Corporation (NMDFC)’s authorised capital from Rs 1,500 crore to Rs 3,000 crore and restructuring of its shareholding pattern.
NMDFC provides soft loans to minority communities for self-employment and economic development.
According to the shareholding restructuring plan, the Union government will increase its stake in NMDFC from 65 per cent to 73 per cent. States and Union territories will reduce their stake to 26 per cent from 29 per cent. Individuals and institutions will hold one per cent shares against nine per cent at present. The authorised capital will have to be raised because the Union government has exhausted its contribution of 65 per cent by paying Rs 975 crore.
The Cabinet also decided to restructure NMDFC’s business model to enlarge the quantum of funds available for economic activities, better coverage and enhanced outreach.
The target of NMDFC is to cover 97,000 beneficiaries in the current financial year.
NMDFC was constituted in as a non-profit making company to provide loans at concessional interest rates for self-employment and economic development activities to the minority communities - Muslims, Christians, Sikhs, Buddhists, Jains and Parsis.
