The venture capital assistance scheme has proved to be a blessing for the farming sector.
Farming is the single largest private sector in India that contributes immensely to the economy of India. The growth potential in this sector is enormous, considering the changing food patterns throughout the country, and there is a high demand for right valued edible products.
Framing is the root cause of the blessed agricultural sector in India. Agriculture is, in fact, the backbone of the Indian Economy. More than 70% of rural households depend upon agriculture. Agriculture is one of the critical sectors contributing a great deal to the Indian Economy. The agricultural sector contributes about 17 % of GDP and employs 60% of the population. Hence, the Indian Government’s significant duty is to leave no stone unturned in draping good benefits and schemes around the agricultural sector.
What is a Venture Capital Assistance Scheme?
The Venture Capital Assistance Scheme is the scheme under the Small farmer’s Agri-business Consortium. This scheme aims for the welfare and growth of farmers and their agri-business. The Venture capital assistance scheme intends to aid the farming sector in the form of the loan to the farmers’ qualifying projects to meet their capital requirements for implementing their project. It is indeed one of India’s best efforts to elevate the agricultural entrepreneurship in India. The scheme initiates interest-free loans to the farming sector to overcome any shortcomings in capital assistance. The initiative like this proves to be of great help for individuals and groups willing to opt for agri-business occupation and start a venture. The scheme helps in assisting Agri entrepreneurs in investing in setting up agribusiness projects through financial participation. Provides financial support to prepare bankable Detailed Project Reports (DPRs) through the Project Development Facility (PDF).
Who can apply?
Assistance under the venture capital Assistance scheme shall be available to the following set of people:
- Individuals.
- Farmers.
- Partnership/ Proprietory firms.
- Producer Groups.
- Self-help Groups (SHG)
- Companies
- Agri-export units.
- Agriculture graduates taking up agri-business projects.
Eligible Financing Institutions
All the banks/financial institutions regulated by the Reserve Bank of India, where the ownership of the Central or State Government is more than 50%, such as nationalized banks, SBI & its Subsidiaries, IDBI, SIDBI, NABARD, NCDC, RRBs & other State Financial Corporations.
Objectives of the venture capital assistance scheme
The primary objectives of the venture capital assistance scheme are as follows:
- To assist and aid the entrepreneurs in setting up an agribusiness venture approved by banks and other financial institutions.
- To promote agricultural entrepreneurship in the right direction and with the right policies.
- To encourage private investment in the agribusiness projects.
- To assist the backward linkages of agribusiness projects.
- To arrange for training programs and ensure frequent visits of Agri entrepreneurs.
- To strengthen the existing state and central SFAC.
- To motivate the farmers, SHG, through the Project Development Facility.
Quantum of Loan
Under the Venture Capital Assistance Scheme, the Quantum of the loan depends on the project’s cost. However, the minimum and maximum amount is specified below:
- The Quantum of the loan is 26% of the promoter’s equity.
- The limit of the amount of loan under the scheme is INR 50 Lakhs.
However, loan for the projects in the north-eastern area differs a great deal and includes:
- The Quantum of the loan is 40% of the promoter’s equity.
- The limit of the amount of loan under the scheme is INR 50 Lakhs.
Venture Capital Assistance Application Procedure
To apply for the Venture Capital Scheme, one needs to use it online by visiting the official website of SFAC, Government of India. All they need to step on is submit the online form after fulfilling a few essential documents’ requirements, which need to be infused. Upon the proper submission of the application form, the bank or financial institution is dutiful for the loan amount’s approval. The bank, if satisfied with all necessary criteria, will forward its authorization to the SFAC. The SFAC will then work upon loan amount for qualified projects.
Important Documents
The following documents are mandatory while submitting your application form:
- Promoter’s request letter
- Sanction letter of the sanctioning authority
- Banks’ approved appraisal
- A current statement of the account
- If it is a partnership firm, a copy of the partnership firm certificate is needed.
- An equity certificate is a must.
- Farmer’s backward linkage duly backed by the agreement
- Affidavit of the promoter stating that VCA was not used earlier
- The CA certificate for unsecured loans.
- Copy of current/last bank inspection report
- Bank’s confirmation that it might not release primary & collateral security without SFAC consent Justification for margin on working capital taken in the project cost.
The Venture Capital Assistance scheme is to benefit the agri-business entrepreneurs throughout the country, bringing in the best results. It is necessary to keep the farmers at the center for now and provide all good opportunities and benefits for their better contribution; this, in turn, would improve the agricultural sector and contribute immensely to the Economy of India. All we need is to spread awareness of these schemes. As an Aatmnirbhar Sena, our prime duty and responsibility are to help all eligible individuals grasp a good opportunity under the plan and spread the word. We shall also conduct seminars and professional vocational workshops for agri-business entrepreneurs to sync with all such schemes and benefits.
