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This Circular permits:
1. increased limit up to which Non-Government Organisations (NGO) can borrow funds from overseas lender by way of External Commercial Borrowings (ECB), under the Automatic Route, from US $ 5 million or its equivalent to US $ 10 million or equivalent during a financial year for permitted end-uses.
2. the following Micro Finance Institutions (MFI) to borrow funds from overseas lender by way of External Commercial Borrowings (ECB), under the Automatic Route, up to US $ 10 million or equivalent during a financial year for permitted end-uses from recognised lenders.
Eligible borrowers:
1. MFI registered under the Societies Registration Act, 1860.
2. MFI registered under Indian Trust Act, 1882.
3. MFI registered either under the conventional state-level cooperative acts, the national level multi-state cooperative legislation or under the new state-level mutually-aided cooperative acts (MACS Act) and not being a co-operative bank.
4. Non-Banking Financial Companies (NBFC) categorised as ‘Non-Banking Financial Company-Micro Finance Institutions’ (NBFC-MFI).
5. Companies registered u/s.25 of the Companies Act, 1956 and involved in micro finance activity.
Recognised lenders:
1. In case of NBFC-MFI — Multilateral institutions, such as IFC, ADB, etc./regional financial institutions/ international banks/foreign equity holders and overseas organisations.
2. In case of companies registered u/s.25 of the Companies Act, 1956 and involved in micro finance activity — International banks, multilateral financial institutions, export credit agencies, foreign equity holders, overseas organisations and individuals.
3. In case of other MFIs — International banks, multilateral financial institutions, export credit agencies, overseas organisations and individuals.
Permitted end-use — Lending to self-help groups or for micro-credit or for bona fide micro finance activity including capacity building.
credit agencies, overseas organisations and individuals. Permitted end-use — Lending to self-help groups or for micro-credit or for bona fide micro finance activity including capacity building.
