India is one of the largest producer and exporter of coir goods, making it a great business opportunity for SMEs. However, finding the right funding to set up a coir factory may not be easy. To solve the funding problems and accelerate an SME’s coir business journey, the government has initiated the credit linked subsidy scheme called ‘Coir Udyami Yojana’ (previously known as Rejuvenation, Modernisation, and Technology Up-gradation of the Coir Industry (REMOT)).
The Coir Udyami Yojana provides financial assistance to SMEs manufacturing coir and coir-related products. This scheme is mainly implemented among the major coir producing states of the country by the Coir Board, a statutory organisation under the Ministry of MSME as the Nodal Agency at the national level.
Rate of Interest and Repayment Schedule
What is the Rate of Interest and Repayment Schedule for this scheme?
- The rate of interest charged would be at par with the base rate
- Repayment schedule may not exceed 7 years after initial moratorium period, as may be prescribed by the concerned bank/financial institution
- The loan would be covered under Credit Guarantee Trust Fund Scheme under the O/o the Development Commissioner, Ministry of MSME
- The guarantee fee for the coverage will be borne by the beneficiary of the bank
- The term loan will be without collateral/third party guarantee
Selection of the beneficiary
What is the criteria for selection of the beneficiary?
Selection of the beneficiary is done on merit, on ‘first-come-first-serve’ basis. The identification of beneficiaries at different regions is done by a committee consisting of representatives of the Coir Board, District Industries Centres (DIC), Coir Project Office, Banks, and Panchayati Raj Institutions etc.
How does an SME benefit from this scheme?
Under this scheme, SMEs will receive a subsidy on loans up to ₹10 lakhs, plus one cycle of working capital, which shall not exceed 25% of the cost of an SME’s factory.
The following table explains the financial break-up of this scheme:
What is the eligibility criteria for this scheme?
- This scheme is applicable only for projects that fall under the coir sector (for example, production of coir fibre/yarn products)
- This scheme provides assistance to the following –
- Self-help groups (SHGs)
- Non-governmental organisations (NGOs)
- Institutions registered under Societies Registration Act 1860
- Production co-operative societies
Joint liability groups and charitable trusts
- SMEs that have already availed a government subsidy under any other scheme for the same purpose, are not eligible.
- Only one person per family (Including self and spouse) is eligible to receive financial assistance for setting up projects under the scheme.
- Entrepreneurship Development Programme (EDP) would be mandatory for all beneficiaries of the Coir Udyami Yojana scheme. The applicants can undergo EDP training either before or after submitting the application for the scheme, but before the Regional Level Selection Committee recommends the applicants to the bank.
How can an SME apply for this scheme?
An SME can apply through online or offline application.
For online application, click here
For offline application, the SME is required to collect the application form from the Coir Board Offices, DICs, Coir Project Offices, Panchayati Raj Institutions or the Nodal Agencies approved by the board for this purpose.
The applications must be submitted directly to the Coir Board Field Offices or through the DICs.
The addresses of the Coir Board Field Offices dealing with the scheme and the application form can be found here.
Which documents are required to apply for this scheme?
- Prescribed application form for scheme assistance
- Copy of the title deed of the property on which the unit is proposed to be set up/already located
- Proof of Coir industry experience
- Proof of training availed from Coir Board
- Machineries proposed to be purchased along with the invoices
- Industrial establishment certificate issued by DIC
- Plan and estimate of construction of workshed duly certified by chartered engineer
- Project profile of the proposed project
- In case of SC/ST, copy of caste certificate
- Other supporting documents