Notification

Matching Grant Program

Matching Grant Program

Matching Grant Program (MGP) is a financial instrument developed to fill the demand and supply gap in lending to rural enterprises. It will help to incentivise the entrepreneurs, who repay the loans taken from the Partnering Financial Institutions (PFIs) with the Matching Grant.

Beneficiaries

Example:
Loan sanctioned by the PFI: Rs.1,00,000

On prompt repayment:

70% of the loan (Rs.70,000) – considered loan amount

Balance 30% (Rs.30,000) – waived off as grant contribution by the Project

Objective

  • To promote rural enterprise, enable access to finance and create job opportunities in selected blocks
  • To address the issues of demand-supply gap in lending to the rural enterprises such as Enterprise Groups, Producer Collectives, First-generation entrepreneurs, Women-led businesses and other enterprises that are perceived as high risk entities by the mainstream finance sector
  • To facilitate a robust financing mechanism through matching grant which will also lead to improved
    loan repayment discipline among borrowers
  • To enhance the scope for sustainability of enterprises
  • To encourage mainstream financial institutions to proactively participate and extend timely credit support

Operative Guideline