Interest Subsidy Scheme for Scheduled Caste/Scheduled Tribe Entrepreneurs

Interest Subsidy Scheme for Scheduled Caste/Scheduled Tribe Entrepreneurs (SC/ST उद्यमियों के लिए ब्याज सब्सिडी योजना)

The Government of Karnataka has launched an initiative to support Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs in establishing and enhancing their micro or small-scale service enterprises. This scheme is designed to promote the expansion, diversification, or modernization of existing business units, facilitating access to loans at a significantly reduced interest rate.

Scheme Overview

The Interest Subsidy Scheme specifically targets SC/ST entrepreneurs by providing financial assistance through loans sanctioned by the Karnataka State Financial Corporation (KSFC). The goal is to empower these entrepreneurs to create new ventures or improve their current operations.

Key Benefits of the Scheme

• Loan Amount:
  • The minimum loan amount available under this scheme is ₹20.00 lakhs.
  • The maximum loan amount can reach up to ₹1,000.00 lakhs, which may include a term loan and a one-time working capital term loan based on the project proposal.
  • It is important to note that the working capital term loan is capped at ₹50.00 lakhs, and applicants cannot request this loan multiple times.
  • Loans can be secured for the establishment of new units or for the expansion, diversification, or modernization of existing units, up to the maximum limit set by the scheme.
• Interest Rate: The interest rate applicable to the loans is a nominal 4%.
• Repayment Duration:
  • The repayment period is set at eight years, including a moratorium period for loans up to ₹500.00 lakhs.
  • For loans ranging between ₹500.00 lakhs and ₹1,000.00 lakhs, the repayment period extends to ten years.

Eligibility Requirements

• The business unit must be entirely owned by SC/ST entrepreneurs, meaning all promoters in any form of business organization (proprietorship, partnership, or company) must belong to the SC/ST community.
• Units with any ownership or shareholding from individuals outside the SC/ST community will not qualify for the interest subsidy.
• Eligible entrepreneurs can be either SCs, STs, or both.

Additional Terms and Conditions

• Units that have previously benefited from an interest subsidy under any other government scheme (either from the Government of Karnataka or the Government of India) are ineligible for this scheme.
• To qualify for the interest concession, the units must not have any outstanding repayment defaults to KSFC.
• While KSFC has the discretion to determine the project’s total cost, the interest subsidy is limited to loans of up to ₹1,000.00 lakhs. Any interest on loans exceeding this amount must be covered by the entrepreneurs themselves.
• KSFC can approve loans at the standard interest rate, but the effective rate paid by borrowers will remain at 4%, with the difference reimbursed by the Government of Karnataka.

Exclusions

Applicants should be aware that certain exclusions apply to maintain the integrity of the scheme. Units that have availed benefits under other subsidy schemes are not eligible.

Application Procedure

To apply for the Interest Subsidy Scheme, interested candidates must follow these steps:

• Step 1: Visit the nearest Branch Office of KSFC during working hours and request a hard copy of the application form.
• Step 2: Complete all mandatory fields in the application form and attach the necessary documents, ensuring they are self-attested if required.
• Step 3: Submit the filled and signed application form along with the required documents to the Branch Office.
• Step 4: Obtain a receipt or acknowledgment from the authority to whom the application was submitted. Ensure that the receipt includes important details such as submission date and time, along with a unique identification number if available.

Official Resources

For further details, applicants may refer to the official site: myScheme.gov.in.