tiic.in Entrepreneur Development Scheme : Tamilnadu Industrial Investment Corporation Ltd

Name of the Organization : Tamilnadu Industrial Investment Corporation Ltd
Name of the Scheme : Entrepreneur Development Scheme
Location: Tamilnadu

Official Website : http://www.tiic.in/entrepreneur_development_scheme.html

Entrepreneur Development Scheme :
1. Objective:
This scheme has been introduced with the specific aim of encouraging entrepreneurship amongst persons from economically and socially disadvantaged backgrounds who wish to promote their own enterprise, to generate income and to lead a life of dignity.

2. Eligibility:
Persons without any asset back up but having relevant qualifications and experience for implementing viable project i.e., first generation entrepreneurs. Ideally entrepreneurs who are engaged in some manufacturing/service/value addition activity shall be targeted under the scheme.

The promoters should have knowledge/experience in the particular line of proposed activity.

Existing small units requiring assistance for additional machinery / needs additional working capital

For transport loan cases, assistance shall be considered only for “OWNER DRIVEN” category i.e., entrepreneur should have valid license with badge for Auto and Tourist Taxi endorsement for the purchase of Tourist Taxies.. Assistance for subsequent vehicles to the same individuals can be considered under Non-owner driven category. For small industrial units requiring load vehicles, assistance can be also considered under Non-owner driven category. The vehicle should be registered as Private Vehicle in the name of the applicant unit.

3. In-Eligible Activities:
Loan advances to the following activities shall not be considered under the scheme:-
** Educational/Training Insitutions (including professionals / computers etc.,) in any form
** Group Loans – Loans to Self Help Groups etc.,
** Wholesale / Retail trading

4. Quantum of Assistance :
The minimum loan assistance shall be Rs.50,000/. The maximum loan limit shall be Rs.5.00 lakhs or 30 times on the net salary of the two guarantors put together whichever is lower. Term and working capital loan can be sanctioned as a composite loan as a maximum of Rs.5.00 lakhs. Working capital can be sanctioned to units not exceeding the term loan amount or Rs.50,000/- whichever is higher. Working capital can be sanctioned to Artisans not exceeding Rs.50,000/- with the proper assessment.

5. Margin Money:
The promoter’s contribution shall be a minimum of 10% on the project cost.

6. Repayment:-
The repayment shall be fixed between two and five years with a moratorium of three to six months. It shall be fixed based on the cash flow and future life of the equipments. For units purchasing electronic items, repayment will be 3 years.

7. Rate of Interest:
The rate of interest shall be fixed at 15.25% (PLR + 1.25%) p.a. with reset clause whenever the Corporation revises the interest rate..

Incase of default, the interest shall be charged on compound basis at monthly rest, besides penal interest of 2.5% on the defaulted EMI for the defaulted period.

8. Security :
Primary assets shall be mortgaged / hypothecated to TIIC. In case of loan for expansion, charge on the existing assets will be extended.

Third party guarantee shall be obtained as under:-
For loans upto Rs.2.00 lakhs – from one person
For loans above Rs.2.00 lakhs – from two persons

The guarantors should be an employee of Central / State Government or Central / State Government undertakings or Public Sector Banks / Financial Institutions or any other organisations / bodies established by Central / State Government (inclusive of Co-operative Societies and educational institution established by State and Central Government). The guarantor’s age is restricted to 50 years.

or

The guarantor should be a person owning land / land and building worth equal to or more than 2 times of the loan amount. Value of the property shall be assessed by a TIIC official.

The guarantor’s age is restricted to 60 years.

9. Salient Features:
If the Applicant / Spouse / Children owns immovable property, then such applicants need not be considered under the scheme..

The pre-operative expenses payable by the promoter such as processing fee, can be included in the project cost. However, the promoter has to pay 1% on the loan amount initially and 0.5% on the loan amount sanctioned at the beginning of every year as RISK COVERAGE FUND as the entire risk is borne by the Corporation.

The procedures for considering proposals and for sanction of loans under the scheme are simple and hence quick. The hassle free and easy process of TIIC, devoid of laborious paper work and a welcome relief for the entrepreneurs.