The entrepreneurs of the State, more particularly the 1st generation entrepreneurs are facing problem to convert their ideas into reality due to lack of adequate resources in the form of equity, loan, etc. Getting loan or financial assistance from Bank/Financial Institutions for any new venture is a major problem in the State as Banks/Financial Institutions are very reluctant top rovide loan considering it as a risk for them. To remove this hurdle of equity /fund crunch, the State Government has proposed to launch a new scheme called Chief Minister's Start-up fund“Sarothi” with an initial amount of Rs.10 Cr during 2016-17. The fund shall be managed by the Industries & Commerce Department as per its operational guidelines. The scheme shall be operational from the financial year 2016-17 and shall be valid for a period of five years.
Proposed guidelines of the scheme do not supplement the argument given above as it does not propose to give equity support, instant aimed at giving interest concession.
Objective of the scheme:
The basic objective of the scheme is to provide financial assistance in the form of loan with Interest subvention through a designated Bank covering whole of Assam. The loan so availed by the beneficiaries will be supported by the State Govt. through Interest Subvention @5% P.A.
The financial assistance has been proposed to be provided in the form of Interest Subvention on loan (Term Loan +Cash Credit) @ 5% P.A. initially through Assam Gramin Vikash Bank (AGVB) to applicant industries. Later on Government may bring in more bank's under the purview of the scheme.
As Assam Gramin Vikash Bank don’t have it existence in the Hill Districts of the Assam viz, Karbi Anglong & Dima Hasao, DIC, Govt. of Assam shall arrange to rope in any other Bank for implementation the scheme in those Districts.
Coverage and Target group:
The coverage of the scheme shall be: -
- All innovative start-up industrial activities and new individual applicant shall beeligible to get the benefit under the scheme.
- New MSME units.
- Priority shall be given to the applicant having any kind of skill developmenttraining.
- The applicant should not be a defaulter of any Bank/ Financial Institution.
Role of the State Government:
- All new innovative start-up industrial activities and individual applicant for newunit shall be eligible for interest subvention on credit upto Rs. - 10.00 lakh.
- The funding of this Subvention will be meet out of the fund parked at the EscrowAccount to be specifically maintained at Assam GraminVikash Bank, Chandmari,Guwahati Branch.
- DICC shall finalise AGVB Branch wise/District-wise target for a financial yearand communicate it to the AGVB Head Office and get it accepted by the bankbefore starting the process of selection of beneficiaries under the scheme.
- On receipt of the Application by DICC from the applicant, it shall be scrutinisedby the official of DICC and placed before District level Committee (DLC)constituted for approval.
- DLC shall include the Branch Manager of the nodal Branch of AGVB in thedistrict, who will be involved in the process of selection of beneficiaries under thescheme.
- On receipt of approval of the DLC, the proposal shall be forwarded to theconcerned Branch/es of Assam GraminVikash Bank for sanction.
- The department of Industries &Commerce,Govt.of Assam shall participate in thejoint inspection of the units financed under the scheme along with the bankofficials of the financing branch periodically to ensure utilization of loaninstalments before release of the subsequent loan instalments to the beneficiariesto ensure creation of asset and successful implementation of the scheme.
- The department of Industries &Commerce,Govt.of Assam shall assist the Bank inthe recovery of loans sanctioned under the scheme and participate in the jointrecovery drives,as and when requested by the Bank.
Financial Assistance & Equity:
- Loan amount shall be maximum of Rs. 10.00 lakh.
- Equity/Promoter’s Margin shall be 15% of the project cost.
- All the beneficiaries under the scheme will be eligible for interest subvention oncredit up to Rs.10.00 Lakhs.
- Banks will charge the borrowers as per their respective lending norms and 5% willbe subverted in the loan accounts of the beneficiaries by the DIC, GOA based onclaim prepared by the bank and submitted to the DIC, GOA. The balance interest calculated (@ Lending Rate of Interest levied on the loan amount disbursedminus 5%) will be repaid by the Borrower in Equated Monthly Instalment (EMI).The beneficiary who fails to meet his/her repayment obligations in timeand the account becomes NPA, the benefits of interest’s subvention will not beavailable to them from the date of account becoming NPA. All other eligiblebeneficiaries shall continue to get the benefit of interest subvention for amaximum period of 5 years or the agreed term of the loan whichever is less.
- A Current Account (Escrow Account) shall be opened at AGVB, ChandmariBranch by DIC or parking of the fund “SAROTHI”– THE START-UP ASSAMreceived from the State Govt.
- The Bank will have the authority to debit the Escrow Account to realize theInterest Subvention @5% due to the bank on the loan amount disbursed as on thelast day of each quarter of the financial year.
- The Bank will not charge any processing fees/ documentation fees from thebeneficiaries. The processing fees/ documentations fee shall be borne by DIC,govt. of Assam on behalf of the beneficiaries as per the extent guidelines of thebank or at a specified rate of 3% of the sanctioned amount as mutually agreed bythe Bank and DIC, GOA. As such, the Bank will also have the authority to debitthe Escrow Account to realize the one-time processing fees/ documentation.
- In order to avail the Interest Subvention on credit up to Rs.10.00 Lakhs extended to thebeneficiaries under the Scheme, all branches of the Bank across the State are required tosubmit their claims to the Head Office of the Bank for onward submission to theCommissionerate of Industries and Commerce, Assam on a quarterly basis as at June 30th,September 30th, December 31st and March 31st of the corresponding Financial Year. Theclaims for the last quarter of the Financial Year should be accompanied by a StatutoryAuditor’s Certificate (in original) certifying the claims of the Corresponding FinancialYear as true and correct.The Bank will submit Quarterly Utilisation Certificate indicating interest subventionamount transferred from the Escrow Account to the loan account of eligible beneficiariesas well as the amount of processing fees/ documentation fees realised by the Bank fromthe Escrow account.
For more details about the scheme please refer to the Downloads.