India's Union Agriculture Minister Radha Mohan Singh has announced the launch of a credit scheme called 'Yuva Sahakar-Cooperative Enterprise Support and Innovation Scheme' that aims to provide cheaper loans to startups in the cooperative sector and those having innovative projects costing up to Rs 3 crore.

Created and implemented by National Cooperative Development Corporation (NCDC), the scheme is linked to ‘Cooperative Start-up and Innovation Fund (CSIF)', a dedicated fund having an annual corpus of ₹100 crores.

Loan, under this scheme, will be given for 5 years including 2 years moratorium on payment of principal with 2% interest less than applicable rate of interest.

Cooperative startups operating for at least for one year and having a positive net worth are eligible to avail credit under the scheme for new and innovative project ideas.

The cooperative sector can be defined as that sector of the economy carried out by cooperatives i.e. -- f individuals with small means working together to accomplish the common goal of their common economic, social, and cultural needs. This include industries such as dairy, sugar, agriculture, rural banking and housing among others.

As an incentive, the loans under this scheme will be provided at 2% less than the applicable interest rate on term loan for the project activities. The interest rate incentive would be applicable only for timely re-payers.

The credit scheme would have more incentives for cooperatives of North Eastern region, Aspirational Districts and cooperatives with women or SC or ST or PwD members. The funding for the project will be up to 80% of the project cost for these special categories as against 70% for others.

The project cost should not exceed Rs 3 crore and there will be two years moratorium on payment of the principal amount, he said, adding that the period of moratorium may vary depending on the type of project and ability to generate revenue.

The scheme would be liberal to cooperatives in the northeastern region, those registered and operating in 'aspirational districts' identified by NITI Aayog, a govt of India's policy maker, as well as cooperatives which have 100% women and SC/ST members.

Asserting that the Modi government is strengthening cooperative institutions, Singh said, "We are not just strengthening on paper, but working hard on the ground in every state."

Consequently, the loan amount sanctioned by NCDC has been on the rise since 2014 when the present government came to power.

In the previous regime, about Rs 5,000 crore loans were sanctioned annually by NCDC, but it has doubled in the last four years, he said.

According to the minister, NCDC has sanctioned Rs 12,965 crore loans till November 13 of the current fiscal.

Last month, Madhya Pradesh had also announced a startup loan scheme under which youths of the state will be provided loan up to Rs 10 lakhs without interest as a seed capital for startups.

In the same month, digital payment firm Mobikwik has launched a service called ‘Boost’, that offers instant loan approval and disbursal of loans up to Rs. 60,000 in 90 seconds.

Source - Press Information Bureau

[Top Featured Image - Ishant Mishra on Unsplash]

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