Our Microcredit Criteria

Shalmala Finance Limited provides micro-finance loans to SHG, JLG and individual borrowers for short to medium terms ranging from 6 months to 3 years. The loans are disbursed after due diligence of the borrower and based on satisfaction of guidelines and criteria laid down for loan approval.

  1. Sponsor: Loans will be given to SHGs and JLGs (groups) promoted and maintained by Kadamba Trust.
  2. Group Tenure: Groups will have to have been formed a minimum of 12 months prior to disbursement of the first loan. As the tenure of the group increases, the loan amount will also be increased. The following guidelines would be followed for loan amounts.
Group tenure Maximum Loan Amount
1 Year Rs. 50,000
2 Years Rs. 100,000
3 Years Rs. 200,000
3-5 Years Rs. 350,000
More than 5 Years Rs. 500,000


  1. Loan amount: Maximum loan disbursed per member of the group not to exceed Rs. 35,000 for the first loan and Rs. 50,000 for subsequent loans.
  2. Meetings: Groups must meet a minimum of 2 times a week and demonstrate good accounting and record keeping practices.
  3. Rating: Groups must have demonstrated ability to operate effectively with regular meetings and internal savings. A measure of this will be provided by the ratings obtained during the group review process. To qualify for a loan, a group must obtain minimum rating of 75.
  4. Savings: Groups must have internal savings and also have given internal loans to their members. Loan amounts disbursed by Shalmala will be determined as a multiple of the savings of the group provided the maximum limits are adhered to as above.
  5. Loan History: Groups must demonstrate a good history of previous loans. There should have been no defaults or payment delays on any prior loans given by Shalmala or any other organization. No loans will be disbursed to any group that has a recovery suit filed against it.
  6. Concentration risk: At least 50% of the members of the group must avail of loans from the amount disbursed by Shalmala. No single member of the group will borrow more than 25% of the total loan amount.
  7. Income: Total family income of the member borrowing the money should be at least 2 times the loan amount. Total income for the family cannot be more than Rs. 60,000 in rural villages and Rs. 1,20,000 in semi-urban areas.
  8. Use of funds: Loans can only be given for income generating activities. No loans can be given for non-income generating activities unless this amount is less than 25% of the amount borrowed by the member.
  9. Installment: Monthly installment for loan repayment not to exceed Rs. 650 per member per month.
  10. Health Insurance: Each member of the group with 2 additional family members, must have signed up for the health insurance program provided by Shalmala.