Scheme for Cottage and Village Industries (Composite Loan Scheme)

Description
The scheme "Scheme for Cottage and Village Industries Composite Loan Scheme " was launched by the Pondicherry Industrial Promotion Development and Investment Corporation Limited PIPDIC , Department of Industries & Commerce, Puducherry. The scheme aims to extend financial assistance of both term loan and/or working capital loan to new or existing micro enterprise projects. The scheme provides assistance for acquiring fixed assets, specifically for the purchase of new machinery/equipment and to meet the working capital requirement. The scheme is implemented by PIPDIC. The applications for this scheme are accepted online.

Exclusions
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Benefits
• Financial assistance (Term Loan and/or Working Capital Loan) up to a maximum of ₹25,00,000/- per unit.
• Loan proceeds may be used for assistance for fixed assets and/or working capital.
• Loan proceeds may be considered for the purchase of new machinery/equipment and to meet the working capital requirement.
• The maximum repayment period is 8 years, including a moratorium period of maximum 1 year.
• The Debt Equity Ratio (DER) required for loans under this scheme up to ₹25,00,000/- is 3:1.
• Term loans and working capital loans up to ₹25,00,000/- are charged an interest rate of 10% (Ten per cent) per annum.
• A concessional rate of interest, 0.5% (zero point five per cent) less than the normal rate, is charged for units promoted by Women, Scheduled Caste (SC), Scheduled Tribe (ST), or Differently Abled persons.
• Collateral security in the form of immovable property shall be offered, apart from the mortgage/hypothecation of proposed fixed assets.
• The value of immovable property situated in the Union Territory of Puducherry offered as security must be not less than the amount of the term loan sanctioned.
• If the immovable property is situated outside the Union Territory of Puducherry, its value must be not less than 150% of the loan amount if it includes land with a building.
• If the immovable property offered outside the Union Territory of Puducherry is only land, its value must be not less than 200% of the loan amount.
• For units promoted by Women, Scheduled Caste (SC), Scheduled Tribe (ST), or Differently Abled persons, the value of the property to be offered as collateral security is reduced and fixed at 50% (Fifty per cent) of the loan amount.
• The valuation of properties offered as security shall be assessed by engaging Chartered Engineers/valuers from the approved panel of the Corporation.

Eligibility Criteria
1. The promoter shall be a resident of Puducherry.
2. The applicant must belong to one of the following sectors -
3. - Artisans Village and Cottage Industries sector.
4. - Small Industries in the tiny sector.
5. - Micro Enterprises projects.
6. The loan application purpose must be for assistance for fixed assets and/or working capital.
7. The cost of machinery must have a ceiling of ₹25,00,000/- per unit.
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Application Process
Step 1: Visit the PIPDIC website. Click "Login". Click the “New customer” link under the “Login” menu, enter a username, email-id, password, and captcha, and then click the "Register" button.
Use the registered email-id to log in. An OTP is sent to the re…
Online

Visit the PIPDIC website. Click "Login". Click the “New customer” link under the “Login” menu, enter a username, email-id, password, and captcha, and then click the "Register" button.
Use the registered email-id to log in. An OTP is sent to the registered email address.
The applicant is then required to enter the OTP and click "Login" to access to the customer dashboard.
Upon successful login, the customer needs to update their profile by accessing the "Edit Profile" option (top right corner of the dashboard).
The applicant must provide all required details. Click "Submit".
To initiate the loan application process, the applicant must navigate from the customer dashboard by clicking on the "Applications" tab.
A pop-up window displaying a checklist of General Terms and Conditions, interest rate structure, investigation fees, and collateral security norms will appear for review.
Carefully read this checklist, confirm that all necessary documents have been gathered as requested, and click the “I Agree” button to proceed to the application form.
Fill the multi-step application form, providing appropriate details in all mandatory fields across the required steps.
The applicant must carefully read and agree to the comprehensive declaration provided within the application form (covering confirmation of true information, absence of unauthorized borrowing arrangements, and consent to verification) before finally ticking the "I agree to terms" checkbox and clicking the final "Submit" button for the main application form.
The system will redirect the applicant to enter the Biodata of the Promoter, Partner, or Director, which is typically a multi-step process. The necessary KYC and supporting documents must be uploaded by clicking the "Choose File" button next to each field.
Once the entire application and bio-data submission is complete, pay the applicable application fee.
If selecting online payment, the system automatically redirects the applicant to the payment summary page, where they verify their details and make the payment.
Upon successful payment, the user is redirected back to PIPDIC website, where a receipt for the application fee paid is generated.
The applicant can print this receipt or save it to their computer as a PDF for future reference.
The customer can monitor the status of their submitted application (which will initially show a status like 'UNDER REVIEW') by clicking the "View My application" link on the dashboard and selecting the relevant loan application in the drop-down menu.
For loans up to ₹25,00,000/-, the application fee is ₹100/-.
For loans above ₹25,00,000/-, the application fee is ₹200/-.
The applicant can contact the Managing Director, Pondicherry Industrial Promotion Development and Investment Corporation Limited at No.60, Romain Rolland Street, Puducherry 605001.
The office phone number is 0413-2334361.
The email address for contact is [email protected].
The General Manager (Administration) can be contacted via mobile at 9894653835.

Required Documents
• Copy Of Acknowledgement Of Micro, Small, And Medium Enterprise Registration Certificate Obtained From Industries Department.
• Copy Of Lease Deed For The Work Premises In ₹10.00 Stamp Paper.
• Copy Of Sale Deed For The Work Premises (In Case The Premises Is Owned By The Applicant).
• Site And Factory Building Plan With Machinery Layout And Civil Estimate (2 Copies) (Obtained From Approved Panel Valuer Of Pondicherry Industrial Promotion Development And Investment Corporation Limited).
• Quotation From Selected Supplier For All Machinery And Equipment Proposed With Detailed Specification And Catalogue (Original To Be Produced).
• Two Comparative Quotations From Standard Suppliers For All Machinery And Equipment Proposed (Original To Be Produced).
• Comparative Statement For Machinery With Justification For Choosing The Supplier.
• Selected Machinery Supplier’s Client List With Detailed Postal Address.
• Copy Of Proof For Having Registered As An Approved Supplier With Other Financial Institutions / Banks.
• Proof For Sale Price Of End Product From The Existing Manufacturer / Dealer.
• Quotation / Bill Copies For Each Item Of Raw Materials To Be Used With Arrangements For Regular Supply.
• Manufacturing Process Details With Flow Chart.
• Statistics For Demand And Supply Position Of Product With Proof, Existing Competitions, Major Consumers Details, And Tie-Up Letters For Marketing The Product.
• Copy Of Partnership Deed And Acknowledgement Of Registrar Of Firms (In The Case Of Partnership Firm).
• Memorandum And Articles Of Association (In The Case Of Private Limited Company).
• Bio-Data Of All The Promoters (Duly Filled In All Respect As Per The Format Enclosed).
• Copies Of Pan Card, Voters Identity, Ration Card, Aadhaar Card, And Bank Pass Book.
• Mandatory Furnishing Of Details Asked For In The Application At Page Numbers 12, 13, 14, And 15 To Prepare The Appraisal Report.
• Consent Letter From Bank For Sanction Of Working Capital Loan.
• Consent Letter To Offer Collateral Security To The Extent Required By Pondicherry Industrial Promotion Development And Investment Corporation Limited.
• Balance Sheet And Profit And Loss Account For Last 3 Years And Banker’s Details (For Interested Concerns/Existing Unit).
• Investigation Fee At 0.50% On The Loan Amount Applied Plus Applicable Service Tax (For Women/Scheduled Caste/Scheduled Tribe/Differently Abled Entrepreneurs, 50% Concession Has To Be Paid).
• Applicable Licence Copies, Including Inspector Of Factories Approval, Municipal / Panchayat Permission, And Pollution Clearance, Etc..
• Puducherry Planning Authority Approval (PPA Approval) (Required For Loans Above ₹10,00,000/-).
• Original Title Deed.
• Antecedent Title Deeds.
• Encumbrance Certificate For 30 Years.
• Valuation Certificate (Obtained From Approved Panel Valuer Of Pondicherry Industrial Promotion Development And Investment Corporation Limited).
• Field Measurement Book Copy (FMB Copy).
• Patta Copy.
• Legal Opinion Report For Factory Site And Collateral Security Property.

Frequently Asked Questions
Q: Are there any reductions or concessions provided regarding the payable investigation fee for loan applicants belonging to marginalized communities or specified groups?
A: Yes, Women, Scheduled Caste, Scheduled Tribe, and Differently abled entrepreneurs are eligible for a 50% concession on the investigation fee.
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Q: If the immovable property being offered as security is situated outside the Union Territory, what valuation percentage is required if it includes both land and a building?
A: The value of the land with building offered must be not less than 150% of the total loan amount sanctioned.
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Q: What specific Debt Equity Ratio calculation must my proposal adhere to when applying for loans up to the specified limit under this program?
A: The Debt Equity Ratio required for loans up to ₹25,00,000/- under the Composite Loan Scheme is 3:1.
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Q: What particular financial needs are these composite loan funds intended to address for new or existing micro enterprise projects?
A: The loan is intended to assist with purchasing new machinery/equipment (fixed assets) or to meet the necessary working capital requirement.
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Q: When offering immovable property located within the Union Territory of Puducherry as security, what is the minimum required valuation?
A: The property’s value must be assessed to be not less than 100% (the full amount) of the term loan sanctioned.
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Q: What is the longest permitted duration for repaying the entire principal loan amount, including any potential break periods, for enterprises availing this scheme?
A: The maximum repayment period allowed under this scheme is 8 years.
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Q: Which specific types of small-scale business structures or industrial activities are considered appropriate beneficiaries of this financial program?
A: This scheme is primarily designed for Artisans, Village and Cottage Industries, and Micro Enterprises projects.
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Q: If my project requires an initial period before starting loan repayments, what is the maximum moratorium period that can be granted?
A: A maximum moratorium period of 1 year is included within the total 8-year repayment period.
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Q: I need clarification regarding the absolute maximum quantum of financial assistance an eligible business unit can receive under this specific scheme?
A: The maximum loan amount that can be considered for a single unit under the Scheme for Cottage and Village Industries is ₹25,00,000/-.
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Q: What is the prevailing annual interest rate structure applicable to term loans or working capital loans sanctioned up to ₹25,00,000/-?
A: The standard annual interest rate charged for term loans and working capital loans up to ₹25,00,000/- is 10%.
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Q: Do applicants belonging to specific socially relevant categories qualify for any special reduction in the standard rate of interest?
A: A concessional rate of interest, reduced by 0.5% less than the normal rate, is charged for units promoted by Women, Scheduled Caste, Scheduled Tribe, or Differently abled persons.
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Q: Aside from mortgaging or hypothecating the assets acquired using the loan funds, what additional security must be provided?
A: The applicant must offer collateral security in the form of immovable property, according to the Corporation’s official lending policy.
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Q: If only undeveloped land located outside the Union Territory of Puducherry is provided as collateral, what is the minimum acceptable valuation threshold?
A: If the property offered as security is only land, its value shall be assessed at not less than 200% of the total term loan amount.
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Q: Are there any specific residency conditions that must be satisfied by the promoters seeking financial assistance under this loan provision?
A: The applicant&#39;s promoters must be residents of Puducherry to be considered eligible for this financial assistance scheme.
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