Apply Start up fund scheme in Assam | Sarothi Startup Loan Assam

Apply Start up fund scheme in Assam | Sarothi Startup Loan Assam

The state government of Assam state announced the launch of easy loan scheme “Sarothi” with an aim to eliminate financial crunch for new investors. Under the new loan scheme the process of getting loan from different financial institutions and banks will be less time consuming and simplified. The new scheme is also called as CM’s start-up fund scheme. Under this scheme the funds shall be handled by commerce departments and industries. The scheme is also aimed to lower the risk factor for financial institutions and nationalized banks.

Objective

• The main aim of launching the new scheme by the state government is to try and offer with complete financial help to the investors. Apart from this, the scheme also aims at offering the loan amount with much lower interest rate.
• It is also stated that the loan amount shall be disbursed to the investors through nationalized and reputable bank within the state of Assam. The bank shall also be responsible for covering the process of loan sanction within the state. The state government shall also provide all assistance required to avail the loan at 5 percent interest rate.

Target Audience / Eligibility

• It is expected that the scheme launched by the CM of Assam state shall offer benefit to any investor who is willing to set up innovative industrial activity in the state. So if you are an individual and who is willing to start a new project then you shall benefit under this scheme.
• It is also certain that the new loan scheme is designed to help set up new MSME unit within the state. Apart from this the scheme is also aimed to offer priority to individuals who are having experience in setting up such units. This includes professionals who are trained and have special skills for setting up such units.
• Any individual who has any previous debts with any other financial institutions or bank shall not be eligible to benefit from this scheme.

Banks under the scheme

• According to the Sarothi scheme financial help shall be offered in the form of lowered rate of interest equivalent to 5 percent for cash credit and term loan. The state government has announced that the assistance shall be provided by Gram vikas bank of Assam state. It is also certain that on later stages other banks shall also be recruited by the government.
• For providing financial assistance in Hill district where this bank does not have its branch the state government shall try and offer the service via other banks in the district.

Required documents

It is required that when applying for the loan investors are expected to submit a copy of the following documents at the time of submitting the application form or loan application.

• Two copies of black and white photographs (passport size) of the applicant are required to be submitted along with the loan application in the correct format. If you are an entrepreneur then it is certain that you also have to submit a copy of your memorandum Part-1 along with Udyog Adhar.
• Before claiming for the loan amount it is also required that applicant has to submit a copy of prepared project report for the proposal. A legal proof of applicant’s identity is also required. This means that you have the convenience of submitting multiple identity proofs like voters card, driving license, Aadhar card, Job license and Pan card.
• A verified address proof is also important document that should be submitted. This includes documents like Telephone bill, Electricity bills, voting card, a copy of ration card, bank statement or a copy of letter from a reputed person or a letter from public authority services.
• You also have to submit a copy of your trading license along with the caste certificate (ST, SC or OBC) category. If you are having a training certificate then it is best to submit it at the time of filling the application.

Key Features of Sarothi startup loan

• The main key feature of the scheme is that it is aimed for offering funds in the form of start up fund for entrepreneurs who are interested in investing in the state of Assam. This is provided in the form of finance assistance by reputable bank and financial institutes under interest subvention category.
• It is also certain that the scheme is aimed to benefit as many people as possible within the state offering them with a flat 5 percent per annum rate of interest. It is also certain that the subsidy shall be offered to the investors by financial institutions and bank involved in the scheme.
• The scheme is also expected to offer benefit for new entrepreneurs and investors who are willing to implement new and innovative projects in the state.

Loan amount and duration

• According to the new scheme the government has made it very clear that it shall offer assistance with a loan amount equivalent to around Rs ten lakh per loan application. Apart from this the fixed promoter’s margin amount has been set to around 15 percent of the overall cost of the project.
• It is also certain that he beneficiary shall be subjected to avail subvention interest credit that is equivalent to around Rs 10 lakh. An additional amount of 5 percent of the overall loan amount shall also be charged by the bank as processing fee. Apart from this the total loan amount has to be repaid back to the bank within the period of five years.

Interest Rate

• According to the latest reports submitted by the state government the scheme is very much flexible and that the rate of interest shall be decided depending on the loan amount disbursed by the bank or the financial institute. Apart from this the rate of interest is also subject to vary as per the rules applied by RBI /Bank/NABARD directives.

Repayment facility and penalty

• It is certain that the repayment time of the loan amount shall depend on the type of business activity involved and other terms and conditions that the investors have signed with the bank. In general the bank offers a repayment time of five years for most investors.
• Apart from this the bank shall also be offering a moratorium period for investors that will be equivalent to around ten months from the date of disbursement of the loan. This also depends on the nature of the activity involved by the loan beneficiary.
• It is certain that a penalty amount of 2 percent shall also be charged to the default investors in case they fail to repay the loan or interest on time.

Security

• As this is a loan scheme offered by the state government so it is certain that the entrepreneurs have to hypothecate their machinery and plant along with all other assets that are considered as fixed and miscellaneous.
• Apart from this all other current assets including semi-finished products and goods, raw materials, finished goods and products and stocks shall be considered as current assets for hypothecation against the loan. The bank shall not be considering any type of security that is liquid security in nature.
• It is also obvious that the entrepreneur shall have to pay decided premium amount in case hypothecated assets are insured. This premium amount shall depend on the total value of the asset. A copy of the insurance shall also be attached with the loan application with the bank or the financial institution.
• It is also expected that the borrower shall have to provide a copy of life insurance at the time of application. It is also certain that the loan shall not be valid for micro and small entrepreneurs.

How to apply for the loan

• To apply for the loan the borrower is expected to submit the application along with all documents required to the GM (DICC). All documents have to be according to the checklist provided by the government. Before getting started with the loan processing the DICC shall coordinate with the bank for the approval of the application amount.
• The application shall then be scrutinized by the government officials at the district level. This shall include the approval letter from the Branch manager of the bank involved. After this the application shall be forwarded for further approval to the bank.
• The proposal shall then be examined by the requested bank for validation and sanction or rejection. This whole process shall take around 30 days before the loan is disposed to the borrower.
• The overall approval depends on the total target set for the particular district bank depending on the eligibility of the borrower. DLC is also expect to maintain a waiting list of all other borrowers who are eligible for loan approval. In case there are any rejections then the applications shall be immediately returned to the respective agency.

Application form

• When applying for the loan the borrower is expected to fill in a simple application form. Some general information is required to be filled in the form (Name and other details of the applicant). Apart from this the applicant is also expected to provide a valid residential address for verification along with proof of residence (includes electricity bill copy or Pan card copy etc.)
• The applicant shall also be providing other details regarding the type of training received before setting up the business activity. Some additional details about the caste and community is also required to be filled in the application form.
• The applicant is also expected to provide complete detailed information of the type of activity he or she is willing to set up after opting the loan from the bank. This includes providing an estimate of the overall cost of the project and the amount borrower is willing to invest as capital.
• A complete declaration of all other assets by the borrower is also to be given in the application form. These are some of the important details that shall be considered by the bank for loan approval.

State government role and responsibility

• One of the main roles of the state government is to see the eligibility of the applicants. Apart from this the government is also responsible for innovating the activity for all candidates who could be eligible to get the loan under the scheme.
• The fund shall also be maintained by Gramin Vikash bank, Guwahati branch before being disbursed into the account of the borrower. District wise target for disbursement shall also be finalized by the DICC and later shall be communicated to the Head office such that the process can be scrutinized.
• The officials at the DICC shall be responsible for the process of scrutinization of the loan amount. A special District level committee shall also be formed to look into the process.
• The Branch manager shall be responsible to look into the process of the loan sanction and scrutinization. Once the proposal has been approved then it shall be forwarded to the respective bank.
• The joint inspection of the plant and machinery and other assets shall be inspected by the government of Assam state and other industrial department. Along with this the departments shall also be responsible for performing regular inspection of the assets.
• This department shall also be responsible for helping the bank with the process of loan amount recovery from the borrower.

Conclusion

With the subvention amount being as low as 5 percent it is certain that a number of borrowers and business owners can benefit from this loan scheme. The loan is also a very good option for any one who is willing to invest some amount in setting up an innovative unit in the state. It is also one best option for people who have acquired special training for any industrial and production activity. The scheme is introduced with an aim to help boost new businesses in the state. The process of implementation of the scheme shall begin in the fiscal year 2017-18 in the state.

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