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New Schemes

2. National Equity Fund Scheme:

The scheme has been extended for application to the SSI units in the Metropolitan areas with a view to enlarge the scope of scheme and to cover more beneficiaries. The corporation adopted the scheme w.e.f. 15.02.2002 with result that eligible projects under the scheme upto project cost of Rs. 50 lacs can be facilitated to avail financial assistance at lower promoters Contribution & lower effective interest rates. The parameters of the scheme are as under:-

Eligibility Criteria

  1. New projects in tiny and small scale sectors for manufacture, preservation or processing of goods.
  2. Existing tiny and small scale industrial units including those which have availed of NEF assistance earlier, undertake expansion/ modernization/technology upgradation/ diversification etc.
  3. All new and existing service enterprises, including those which have availed of NEF assistance earlier [except Road Transport Operators]. However, in case of service enterprises, the assistance under NEF would be made available only for acquisition of fixed assets.
  4. Sick units in the tiny and small scale sectors including service enterprises which are considered potentially viable.
  5. Projects which avail of any margin money or seed / special capital assistance under the schemes of Central or State Government, State Financial Corporations and other State level institutions or banks will not be eligible for assistance.
  6. Availment of refinance in respect of term loan for the project by SIDBI is a pre-requisite for extending equity type assistance under the scheme.

Project Cost

Project cost [including margin money for working capital] should not exceed RS 50 lakh in case of new projects. In case of existing units and service enterprises, the total outlay, including the proposed outlay on expansion/ modernization/ technology uprgradation/ diversification or rehabilitation should not exceed RS 50 lakh.

Promoter's Contribution

Minimum 10 % of project cost.

Debt Equity Ratio

65 : 35 or 1.857 : 1 [excluding State investment Subsidy]. However a flexible approach may be followed in the case of rehabilitation proposals.

Nature of Assistance

Equity type assistance in the form of sort loan.

Amount of Assistance

Amount as may be required to meet the gap in equity as per prescribed debt equity norm, after taking into promoters' contribution, subject of maximum of 25% of project cost or RS 10 lakh per project, whichever is lower.

Terms of Assistance

    1. Interest
      No interest is charged on the soft loan component except service charge of 5% p.a. of which, PLIs would retain service charge of 1% p.a. , and remaining 4% should be passed on to SIDBI.
    2. Repayment period 7 years ( including moratorium upto 3 years) for the soft loan. The repayment period should be coterminous with repayment period of normal term loan for the project. Whenever borrowers are making repayments/ prepayments of term loan alone, the PLIs may insist on repayment of soft loan and whenever soft loan repayments are not received, the repayments/ prepayments so received may be proportionately adjusted by the PLIs towards term loan and soft loan, payments to SIDBI may correspondingly be made.
    3. Security
      No security [including collateral] is to be insisted upon for the soft loan.

Others

    1. The projects covered under single window scheme can also be extended assistance under NEF Scheme. NEF assistance in such cases would be restricted to 25% of cost of the fixed assets (project cost less margin money for working capital).
    2. Credit risk in respect of assistance out of NEF is shared equally by GOI and SIDBI.
 

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