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Community Investment Fund

Community Investment Fund (CIF)

Community Investment Funds (CIF) are grants which are provided to Self-Help Groups. It is administered under the National Rural Livelihood Mission (NRLM) for improving the quality of life and for providing other social needs of the members in the Self Help Group. It is intended to encourage innovative community enterprise and also to provide small amounts as loan or grant to those tormented by poverty.

Objectives of CIF

Community Investment Fund (CIF) is instated with the following aims:

1. To provide financial support to the members of Self-Help Groups and thus improving their quality of life
2. To improve the activities of the Self-Help Groups
3. To provide financial assistance to be self-reliant by setting up small scale industries under Self-Help Groups
4. To assist the poor by testing innovative products and delivery systems
5. To make financial services more efficient and accessible to destitute

Releasing CIF

The Community Investment Fund is administered through the federations. The grants are extended to Federations, and they provide these funds to Self Help Groups. It is usually provided in the form of loans by the federations under a nominal interest rate. The federations enjoy the right to decide the interest rate of the loans.

Quantum of CIF

The Ministry of Rural Development decides the amount distributed through Community Investment Funds. According to the regulations, a Self Help Group is eligible for CIF between Rs.40,000 and Rs.60,000. Usually, the same amount is granted to all the Self Help Groups in a particular region.

Eligibility Criteria to Avail CIF

1. The funds will only be provided to SHG subject to some criteria. If the Self-Help Group does not comply with the standards, the federations have the power to withholds grants under CIF.
2. The SHG should constitute of women from a very poor household and should be following Panchsutra at least for the last 26 weeks.
3. Functional committees have been formed and ensured that they are trained in CIF management
4. At least for the last 6 months, the SHG should be having an internal savings fund that is being circulated between the members in times of need.
5. Self Help Group should have a separate Bank Account opened for the Community Investment Fund.
6. Perfect Accounts and bookkeeping should be in place, and a person should be appointed for the same.
7. The SHG should have developed its participatory micro-plan.

Application forms to avail CIF are available below:

CIF-Application form

Mechanism of Fund Flow in CIF

On achievement of certain milestones of the Gram Panchayath Level Federation (GPLF), a part of the amount from the Community Investment Fund can be allocated to it. The CIF can be credited to the GPLF in two instalments. Usually, the instalments are of the ratio of 40:60.

In the first instalment, 40% of the CIF fund entitled or total required fund, whichever is lower is released. For this release of the first instalment of the Community Investment Fund, micro-planning is to be done with the eligible Self Help Group. This process usually takes about three months. Further, the Gram Panchayath Level Federation will conduct an improvement strategy aimed at nurturing the remaining Self Help Groups to make them eligible.

The Micro Investment Plans are consolidated before the release of the second instalment of the Community Investment Fund. A time gap of a quarter to half a year is mandatory between the release of the first and the second instalments. During the time period, the Gram Panchayath Level Federation has to utilise the first instalment of the fund and ensure the inclusion of the Self Help Groups that have been left out.

It is mandatory to release 40% of the amount allocated as the first instalment. However, the rest of the 60% of the amount can be released in one or many instalments. This depends on the requirement of the Self Help Organisations. However, the organisations have to fulfil certain criteria before they can avail the funds.

Disbursement Process of CIF

The CIF is disbursed after following certain procedures and criteria. They are as follows:

1. Eligible SHGs shall prepare Micro Investment Plan and submit the plan to Gram Panchayath Level Federation (GPLF)
2. After receiving of CIF loan from Gram Panchayath Level Federation, CRP shall facilitate MIP process at SHG level and will be reimbursed Rs.300 per SHG
3. GPLF shall appraise and consolidate all MIP plan and prepare GPLF-CIF plan to Block Mission Management Unit (BMMU)
4. BMMU shall appraise based on the eligibility of the Self Help Group and endorse to BMMU for releasing fund directly to GPLF CIF account
5. At Block Mission Management Unit (DMMU) level, DMMU shall constitute a committee comprises (DPM, APD–credit cum PE-FI, APD–training-cum-PE-IB&CB) for scrutiny, appraise and recommend for approval of MIP plan of GPLFs to disburse CIF. PD DRDA shall sanction and order for timely release of the fund to GPLF
6. From DMMU the fund shall be transferred directly to GPLF CIF account or transfer through BMMU. BMMU shall communicate a copy of sanction order to sanctioned GPLF

Interest Rate of CIF

The rate of interest is decided by the Executive Committee of the Gram Panchayath Level Federation and other federations. The interest rate has to be charged from the Self Help Groups by the VOs. The federation above the VO charges interest rate from the VO. The rates have to be recorded in the minutes book if at all possible. The federations have the power to look into the rates in other states. This reference provides uniformity in the interest rates.

The Utilisation certificates for SHGs are available below:

CIF-Utilisation_Certificates