The National Scheduled Castes Finance and Development Corporation (NSFDC) provides concessional credit to economically weaker sections — Scheduled Castes, Scheduled Tribes, Other Backward Classes, and minorities — for income-generating self-employment. Operating under the Ministry of Social Justice and Empowerment, it channels loans through State Channelising Agencies at below-market interest rates. The corporation also runs skill development programmes to complement credit access, aiming to make beneficiaries financially self-reliant rather than dependent on recurring government transfers.

NSFDC was set up in 1989 as a not-for-profit company under the Companies Act, fully owned by the Government of India. Its mandate is to address a structural gap: marginalised communities face collateral barriers and credit-history exclusions that keep them outside formal banking channels even after financial inclusion policies widened bank account access.

The delivery model is two-tier. NSFDC does not lend directly to individuals; it refinances State Channelising Agencies (SCAs) — typically state-owned corporations for scheduled castes or backward classes — which then on-lend to beneficiaries. This makes SCAs the critical last-mile link. Beneficiaries must fall below a specified income ceiling (currently ₹3 lakh per annum for urban areas).

Key schemes operated by NSFDC include: (i) Term Loan Scheme for micro and small enterprises; (ii) Mahila Samridhi Yojana for women beneficiaries; (iii) Laghu Vyavsay Yojana for small trade; (iv) Shilp Sampada for artisans; and (v) Education Loan Scheme. Interest rates are deliberately concessional — typically 2–5% at the beneficiary level — far below commercial rates.

From a financial inclusion perspective (RBI angle), NSFDC complements Priority Sector Lending targets by serving segments that banks structurally under-serve. From a rural credit angle (NABARD angle), its artisan and agricultural allied schemes overlap with rural livelihood programmes. For UPSC, NSFDC represents the state's affirmative financing instrument within the broader social justice governance framework.