Indialends, 27 Jul 2023

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Venture Capital Scheme

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The Venture Capital Assistance scheme is a kind of financial support given in the form of interest-free loans to small farmers, self-help groups, or any of the proprietary firms. It is provided by SFAC ( Small Farmer’s Agribusiness consortium. It is the best financing option to meet the shortfall in the capital requirement for the implementation of the project.

The main benefits of the Venture Capital Assistance Scheme

• It will help in assisting the agripreneurs to run successful agribusiness projects through active financial support.
• Providing financial support for preparing the bankable detailed Project Reports(DPRs) through Project Development Facility(PDF).

The main features of the scheme

The Venture Capital is given only for those projects that are already approved or qualified by the banks/ financial institutions.

• As per the repayment schedule, the venture capital is repaid to the SFAC within the stipulated period.
  
• The SFAC will provide the venture capital to the agri-business projects in the form of soft loans.

Who are eligible for the Venture Capital Scheme?

• Farmers
• Producer Groups
• Partnership/Proprietary Firms
• Self Help Groups
• Companies
• Agripreneurs
• Units in Agri export zones
• Agriculture graduates Individually or in groups for setting up agribusiness projects.

Documents required to get enrolled in Venture Capital Scheme

• A letter addressing to Managing Director of SFAC is required. It is a promoter’s request to get financial assistance which is to be given on the letterhead of the company or firm.
• Sanction letter of the Sanctioning authority addressed to recommending branch.
• The bank’s approved appraisal or process note with a signature of the sanctioning authority with the terms of sanction of the term loan.
• Up-to-date statement of account of the Term Loan and Cash Credit
• Equity Certificate: It can be a C.A. certificate in case of Proprietorship firms or Partnership Firms, or form-2(PAS-3), FORM-5(SH-7), and other documents in place of FORM-23 filed with ROC.
• The Farmer’s a list/ backward linkage duly supported by the agreement.
• Affidavit of promoters that they have not availed VCA in the past.
• If the loan is unsecured, in that case, it is a must to enclose the loan application with C.A certificate.
• Submitting the copy of last Bank’s inspection report.
• Bank’s confirmation that they will not release primary & collateral security without SFAC consent
• Justification for margin on working capital taken in the project cost

Quantum of the loan

The Quantum of the loan for the venture capital assistance is offered based on the cost of the project. Here are the minimum and the maximum amount loan eligibility.

• The quantum of loan will be 26% of the promoter’s equity.
• The maximum amount of loan provided under this scheme will be Rs.50 lakhs.

The loan for the projects placed in the north-eastern parts of the hilly region is as follows.

• The quantum of loan will be 40% of the promoter’s equity.
• The maximum amount of loan provided under this scheme will be Rs.50 lakhs.

Terms and conditions of Venture Capital Scheme:

The following are the conditions to be satisfied to avail loan under this scheme.

• The project must be in the agriculture sector or any other sector related to agriculture practices.
• The project must give the assured market to the producer or farmers.
• The project must be sanctioned by the banks or financial institutions for the grant of loan to the project.
• The project should encourage the farmers in yielding high-value crops for the increase in the income of the farmer.

Steps to apply for Venture Capital Scheme

• The applicant has to visit the official portal of the SFAC, Government of India
• Click on the “ Venture Capital Assistance Scheme (VCA)” tab which is visible on the homepage of the portal.
• On the same page, select “Online submission of venture capital assistance scheme Form” from the list of options to apply for the scheme through online mode.
• On the next page, click on the “Apply for New venture capital assistance scheme Application” link.
  
• Click on the “Start Filing Application Form” button, then the application forms the venture capital assistance scheme will open up.

Fill the application form with the required details such as

• Bank details
• Name and Address of controlling office of the branch
• Status of Accounts
• Cost of projects
• Name of the consultant
• Finally, click on the “Next” button to complete the process. the application form, you need to upload the documents required along with the form.