Udyog Plus is a part of Aditya Birla Finance Limited

BACK TO ALL POSTS

KVIC Scheme: Full Loan Details for Khadi and Village Udyog

Published On Nov/07/2024

Khadi and Village Industries Commission (KVIC) is a government body responsible for promoting and supporting the growth of Khadi and other rural industries in India. Established in 1956 under the Khadi and Village Industries Commission Act, KVIC plays a pivotal role in providing employment opportunities in rural areas and preserving India’s rich cultural heritage. One of the significant ways the commission helps foster growth is through various financial schemes, which include offering loans to small-scale and rural entrepreneurs. In this blog, we will explore the details of the KVIC loan scheme and its benefits for Khadi and Village Udyog (rural industries).


Also Read: Best Business Ideas for Village, Rural Business Ideas in India


What is KVIC?


Before diving into the loan details, let’s first understand the KVIC's full form. The Khadi and Village Industries Commission (KVIC) is an autonomous body set up by the Indian government to promote the development of Khadi (handwoven cotton fabric) and other rural industries. KVIC supports various projects to uplift rural livelihoods and contributes to the economic empowerment of artisans in rural areas. The commission runs several initiatives to provide financial assistance to entrepreneurs in rural industries, especially those linked to Khadi production and related crafts.


KVIC Loan Details: The Key to Rural Entrepreneurship


KVIC provides several loan schemes to support small businesses and individual entrepreneurs. The primary goal of these schemes is to boost self-employment and promote sustainable rural development. Here’s an overview of some prominent loan schemes under the KVIC umbrella:


1. Prime Minister’s Employment Generation Programme (PMEGP)

PMEGP is one of the most popular schemes run by KVIC for financing micro and small enterprises in rural and urban areas. The scheme aims to generate employment opportunities for educated youth and other individuals in rural areas, particularly in the manufacturing and service sectors.


Key Details of PMEGP Loan:

  • Eligibility: Individuals above 18 years of age, with a minimum educational qualification of 8th grade.
  • Loan Amount: Up to ₹25 lakhs for manufacturing units and ₹10 lakhs for service sector units.
  • Interest Rate: Approximately 12-15% per annum (subject to change).
  • Subsidy: The government provides a subsidy of 15-35% on the project cost based on the category (General or Special category).
  • Repayment Period: 3-7 years.
  • Security: No collateral is required for loans up to ₹10 lakh.

2. Khadi Gramodyog Yojana (KGY)

Khadi Gramodyog Yojana focuses on promoting the production of Khadi and other village industries. Under this scheme, financial assistance is provided to both new and existing Khadi institutions.


Key Details of KGY Loan:

  • Eligibility: Institutions or individuals involved in the production of Khadi or village industry products.
  • Loan Amount: The loan amount can vary based on the project size and scope.
  • Interest Rate: Subsidized rates, usually ranging from 4-5%.
  • Repayment Period: 5-7 years.
  • Collateral: Collateral may be required depending on the loan amount.

3. The Rural Employment Generation Programme (REGP)

The REGP scheme aims to promote self-employment and create sustainable livelihoods in rural India by supporting the establishment of small-scale industries. It is designed to encourage individuals or groups to set up businesses in rural areas.


Key Details of REGP Loan:

  • Eligibility: Individuals or groups engaged in setting up rural industries such as food processing, cottage industries, etc.
  • Loan Amount: Up to ₹1 crore.
  • Interest Rate: Generally, 12-15% per annum.
  • Repayment Period: 5-7 years.
  • Subsidy: A certain percentage of the project cost is provided by the government as a subsidy.

How to Apply for a KVIC Loan


To apply for any of these schemes, individuals or institutions need to follow a simple procedure:

  1. Visit KVIC or the PMEGP Portal: Applicants can visit the official KVIC website or the PMEGP portal to fill out the online application form.
  2. Submit Necessary Documents: Along with the application form, applicants need to submit documents such as identity proof, educational qualification, business plan, and proof of land or property if required.
  3. Verification and Approval: After submitting the application, the KVIC team verifies the details and approves the loan based on eligibility criteria.
  4. Loan Disbursement: Once approved, the loan amount is disbursed to the applicant’s bank account.

Khadi Gram Udyog Business List


If you are considering starting a Khadi or Village Udyog business, there are a variety of ventures you can explore under the KVIC schemes. Here are some popular Khadi Gram Udyog business ideas:

  • Khadi Production: Manufacturing Khadi fabric, which can include spinning, weaving, and dyeing.
  • Food Processing Units: Small-scale food processing businesses, including packaging of organic products.
  • Handicrafts and Handlooms: Starting a business that produces traditional handicrafts, pottery, or handwoven goods.
  • Organic Farming: Engaging in organic farming or the production of organic products like honey, pickles, or jams.
  • Leather Products: Setting up a small-scale leather goods manufacturing unit.
  • Bamboo Crafts: Producing various bamboo-based products, including furniture, home decor, and utility items.

Benefits of the KVIC Loan Scheme


The KVIC loan scheme is a blessing for entrepreneurs looking to start a business in the rural sector. Here are the key benefits:

  • Access to Financial Assistance: Entrepreneurs get the necessary financial support to set up or expand their businesses.
  • Subsidy and Lower Interest Rates: The government provides subsidies and low interest rates, making it easier to repay loans.
  • Encouragement for Rural Development: These schemes help in the socio-economic development of rural areas by promoting local businesses.
  • Skill Development: Entrepreneurs receive training, which enhances their skills and makes their businesses more sustainable.

Conclusion


The KVIC loan schemes provide a significant opportunity for aspiring entrepreneurs to set up Khadi and Village Udyog businesses and contribute to rural development in India. Whether you are interested in starting a Khadi production unit, a food processing business, or any other rural industry, KVIC offers the financial support and resources needed for success. If you are keen to explore these opportunities, make sure to check the detailed KVIC loan details and the Khadi Gram Udyog business list to find the right business opportunity for you.