Venture Capital Assistance Scheme

Venture Capital Assistance Scheme


The main objectives of the Scheme are:

(a) To facilitate setting up of agribusiness ventures in close association with all Notified Financial Institutions notified by the Reserve Bank of India where the ownership of the Central/State Government is more than 50% such as Nationalized banks, SBI & its subsidiaries, IDBI, SIDBI, NABARD, NCDC, NEDFi, Exim Bank, RRBs & State Financial Corporations. subsidy for agribusiness

 (b) To catalyze private investment in setting up of agribusiness projects and thereby providing assured market to producers for increasing rural income & employment.

(c) To strengthen backward linkages of agribusiness projects with producers.

 (d) To assist farmers, producer groups, and agriculture graduates to enhance their participation in value chain through Project Development Facility.

(e) To arrange training and visits, etc. of entrepreneurs in setting up identified agribusiness projects.

(f) To augment and strengthen existing set up of State and Central SFAC.

Salient features of the Scheme

Venture Capital Assistance

SFAC would provide Venture Capital to qualifying projects on the recommendations of the Notified Financial Institution financing the project. This venture capital will be repayable back to SFAC after the repayment of term loan of lending Notified Financial Institution as per original repayment schedule or earlier.

SFAC would provide venture capital to agribusiness projects by way of soft loan to supplement the financial gap worked out by the sanctioning authority of term loan under Means of Finance with respect to cost of project subject to the fulfillment of the following conditions:

(a) Qualifying projects under Venture Capital:

 (i) Project should be in agriculture or allied sector or related to agricultural services. Poultry and dairy projects will also be covered under the Scheme.

 (ii) Project should provide assured market to farmers/producer groups.

(iii) Project should encourage farmers to diversify into high value crops, to increase farm incomes.

(iv) Project should be accepted by Notified Financial Institution for grant of term loan.

(b) The quantum of SFAC Venture Capital Assistance will depend on the project cost and will be the lowest of the following:

  • 26% of the promoter’s equity ‹
  • 50.00 lakhs. Provided that for projects located in North-Eastern Region, Hilly States (Uttarakhand , Himachal Pradesh, Jammu & Kashmir) and in all cases in any part of the country where the project is promoted by a registered Farmer Producers Organisation, the quantum of venture capital will be the lowest of the following: ‹
  • 40% of the promoter’s equity ‹ `50.00 lakhs.

Eligible Persons

 Assistance under the Scheme will be available to Individuals; Farmers; Producer Groups; Partnership/Proprietary Firms; Self Help Groups; Companies; Agripreneurs; units in agriexport zones, and Agriculture graduates Individually or in groups for setting up agribusiness projects. For professional management and accountability the groups have to preferably form into companies or producer companies under the relevant Act.

Venture Capital Assistance

As part of term loan appraisal in respect of proposals received from the entrepreneurs or agriculture producer groups for sanction of agricultural term loans. The Notified Financial Institution will indicate the amount of venture capital support from SFAC while working out the funding pattern for qualifying projects.

Projects qualifying for venture capital assistance from SFAC:

 Are dependent upon agricultural or allied produce ‹ Provide direct access to producers as assured markets ‹ Encourage farmers to diversify into high value crops aimed to increase farm income Are accepted by the Notified Financial Institution for grant of project term loans after satisfactory techno- commercial feasibility.

 The quantum of SFAC venture capital assistance will depend on the project cost and will be the lowest of the following: ‹

26% of the promoter’s equity ‹ `50 lakhs

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