Micro Finance Scheme









			National Centre for Jute Diversification, Ministry of Textiles, Govt. of India is the nodal agency for country wide promotion of Jute Diversified activities and is engaged in providing various backward and forward linkages like raw material, design support, skill development etc. so that the programme on jute diversification could be implemented effectively apart from providing need based financial assistance. Such jute diversification activity is not only aimed at extending application of jute to various new areas but also to provide the market with natural bio-degradable and environment friendly material for mass consumption. The demand for jute diversified products have become all the more important in view of the environmental concerns. With the restrictions on indiscriminate use of petro-chemical products especially plastic carry bags the opportunities for jute diversified products have gained immense importance. The opportunities have proved even more worthwhile in view of its potential to generate employment in a big way especially amongst women and rural youth. NCJD has been actively involved in implementing various programs on jute diversification in several locations allover the country especially in traditionally non-jute growing areas. Against this backdrop, the National Centre for Jute Diversification (NCJD) under the aegis of Ministry of Textiles, Govt. of India has come out with an entrepreneur friendly scheme known as Micro Finance Scheme (MFS) for financial assistance to individual entrepreneurs, Self Help Groups (SHG) and Non Government Organisation (NGO). There are three broad categories of beneficiaries as under:


	M icro Finance Scheme (For Entrepreneurs)


	Under this category small entrepreneur who have the skill and undergone training in production of Jute Diversified Products but are not able to commence commercial production due to financial constraints are covered.


	Objective of the scheme

	To encourage budding entrepreneurs to take up production of Jute Diversified Products.
	To make the project proposal more attractive in terms of Return on Investment & Profitability,
	To expand the production base for Jute Diversified Products.
	To create awareness about potentials of jute based activities as a medium of sustainable human development and elevating people above the poverty line especially in rural areas.
	To ensure environment friendly practices.
	Strengthening the infrastructure and capacity building.


	Scheme

Under this scheme (MFS), financial support in terms of interest free loan towards margin money/equity to entrepreneurs for setting up of production unit of jute diversified products will be provided. The loan assistance will be maximum Rs. 1.00 lakh depending upon the nature of project proposal and linkages with other funding institutions/banks and other promotional agencies. The interest free loan will have to be paid back to NCJD within five years from date of commencement of commercial production or 12 months from the date of disbursement of loan which ever is earlier.


	Eligibility


	Broad eligibility criteria for financial assistance under this scheme are

	The Promoter/s of the proposed establishment should have skill of manufacturing Jute Diversified Products (JDP).
	The Promoter must have undergone recognized / bonafide training in JDP.
	Preference for those units having marketing linkages of its own.
	The proposed establishment must be registered with District Industries Centre (DIC)
	The project proposal must be appraised by Primary lending Bank and other funding agency and should have consented for borrowing interest free loan from NCJD as margin money.
	Should be recommended by the District Administration / DIC
	Should have infrastructure for setting up of Small Scale Industry (SSI) unit.
	Should have efficient management and working team
	Should have market exposure relating to the products proposed to be manufactured.


	Selection & Sereening


	Details of the MFS are being distributed among various promotional agencies including District Industries Centre, KVIC, Financial Institutions and banks. All the project proposals will be subjected to scrutiny of the relevant documents including appraisal note of primary lending bank. In case of self-financing projects recommendation from the respective State Govt./DIC/DRDA is essential. The project proposals found eligible shall be placed before Sub-Committee for NGOs/ SHGs/ Entrepreneurs (MFS) for final sanction. Thereafter the decision will be reported to recommending agency/primary-lending bank and on acceptance of the proposal by the Committee, necessary formalities for execution of the Memorandum of Understanding between the Entrepreneur and NCJD will be made.


	Projects


	Any project relating to manufacture of Jute Diversified Products up to the project cost of Rs.10.00 lakhs will be entitled for financial assistance under MFS. The project cost shall consist of two components – Fixed Capital & Working Capital.

Fixed Capital	Working Capital
• Work shed	• Raw Materials
• Machinery & Equipment	• Wages
• Preliminary & Pre-operative expenses	• Power & Fuel
• Miscellaneous Fixed Assets	• Rent, Taxes & Insurance
• Deposits (for Power, Telephone, etc.)	• Stores & Spares
• Contingencies	• Other factory expenses


	Funding Pattern


	The scope of assistance under MFS will be in the form of interest free loan. Support to entrepreneur under MFS for production of jute diversified products will be provided maximum up to 25% of the project cost or Rs. 1.00 lakh which ever is less as interest free loan towards margin money to meet the requirement of primary lending banks or any other funding agencies.


	Disbursement of Loan

	Interest free loan is to be disbursed to the primary lending bank in favour of the entrepreneur's account by A/C payee cheque or DD only.

	Repayment of Loan

	The repayment will start after commencement of commercial production of the proposed unit but not latter than one year from the date of disbursement of the loan and the entire loan will be repaid in five equal annual installments without bearing any interest. Recovery of bank loan, if any, and interest free loan from NCJD would proceed simultaneously, details of which as worked out by NCJD will be intimated at the time of disbursement. Detailed formalities [Format of application, Loan Agreement etc.] are available with NCJD. If necessary five post dated cheques in favour of National Centre for Jute Diversification for total loan amount from NCJD will be collected from the entrepreneur before disbursement of loan.

	Monitoring

	In order to ensure smooth functioning of assisted entrepreneurs in accordance with guidelines of NCJD and the Work Plan, the assisted entrepreneurs will be subjected to regular monitoring through physical inspection either by the NCJD officials or its authorized representatives.

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