A. Implementing period and Area of operation
The scheme will be implemented during the remaining XI plan period through out the country. As there are slaughter restrictions in some of the states, the local laws pertaining to this should be kept in mind while processing loan applications.
B. Eligibility
Farmers, individual entrepreneurs, NGOs, companies, NGOs, SHGs, JLGs, Cooperatives, etc. Preference to be given to SC/STs, women beneficiaries & for individual units. They should constitute at least 405 of the total beneficiaries.
C. Subsidy
The ceiling on subsidy for different credit linked capital subsidy activities under the scheme are given below:-
* Where the project site is located at an altitude of more than 1000 meters above the mean sea level (MSL).
D. Funding pattern
- Entrepreneur contribution (margin) – minimum 10 % of the outlay for commercial units & 25% for industrial units. The cost of land not exceeding 10 of the project cost can form part of the promoter’s contribution.
- Back ended capital subsidy - as indicated above at C.
- Effective Bank Loan - Balance portion.
E. Linkage with credit
Assistance under the scheme would be purely credit linked and subject to sanction of the project by eligible financial institutions. In case of commercial & industrial units after sanction of the bank loan & disbursement of first installment of the loan, the bank shall apply to the concerned Regional Office of NABARD for sanction and release of entire subsidy in respect of commercial units in the Annexure II, They have to apply for 50% of the subsidy(advance) in respect of industrial units in Annexure III. After completion of the unit, the bank can apply for the final installment of subsidy in Annexure IV.
F. Eligible financial institutions
- Commercial Banks
- Regional Rural Banks
- State Cooperative Banks
- State Cooperative Agriculture and Rural Development Banks; and
- Such other institutions, which are eligible for refinance from NABARD.
The entrepreneurs shall apply to their banks for sanction of the project. The subsidy shall be released on first come first serve basis subject to availability of funds.
G. Repayment
- Repayment Period will depend on the nature of activity and cash flow and will vary between one year for model I & 4-6 years for commercial (model II) & Industrial (model III) units. The repayment period may include a maximum, grace period of one year (to be decided by the financing bank as per needs of individual projects).
- The repayment schedule will be drawn on the total amount of the loan (including subsidy) in such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding subsidy).
F. Rate of Interest
Rate of interest on the loans shall be as per RBI guidelines and declared policy of the concern bank. The bank may charge interest on entire loan amount till the subsidy is received & from the date of receipt by the implementing branch, interest has to be charged only on effective bank loan portion i.e. excluding subsidy.
H. Security
The security for availing the loan will be as per guidelines issued by RBI from time to time.
I. Time limit for Completion of the project.
- Time limit for completion of the project would be as envisaged under the project, subject to maximum of 12months period from the date of disbursement of the first installment of loan which may be extended by a further period of 3 months, if reasons for delay are considered justified by the financial institution concerned.
- If the project is not completed within the stipulated period, benefit of subsidy shall not be available and advance subsidy placed with the participating bank, if any, will have to be refunded forthwith to NABARD.
For detail circular on the scheme please visit:
