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Vikas Asha Loan Scheme

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Status: Active

Classification: Public Sector Scheme

Release Date(s):
18th February 2023
24th September 2021

Offering: Loan/Credit

Entity Type: Central Government

Reading Time: 7 Mins

Ticket Size: Upto ₹ 10 Lakhs

Entity Name: Karnatak Vikas Grameena Bank

#Views: 54

Disclaimer….before you read ahead!
The information contained herein is of a general nature and for information purposes only, with the intent of raising awareness around various resources, schemes etc. available for women entrepreneurs in India. It is not intended to address the circumstances of any particular individual or entity. It does not purport to be all-inclusive or necessarily contain all the information that may be relevant for the reader, and may be subject to updation, revision or amendment. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to remain accurate in the future. The reader, therefore, is required to exercise their discretion; and not act on such information without appropriate professional advice after a thorough examination of the particular situation.

Furthermore, we are not a lender and are not authorized by the Reserve Bank of India to act as one. By disseminating the information contained herein, we are not soliciting any borrower or customers for the company or organization mentioned herein nor do we intend to syndicate any capital for the reader of this email.

 

About this scheme…

Vikas Asha Loan Scheme was launched on March 8, 2021 by Karnatak Vikas Grameena Bank (KVGB), with the objective of empowering and encouraging women entrepreneurs by providing financial assistance to start or expand their business.

KVGB is a Regional Rural Bank (RRB) that operates in 9 districts of Karnataka and is owned by Government of India, Government of Karnataka and Canara Bank in the ratio of 50:15:35.

 

How is it being implemented?
Under the Vikas Asha Scheme, direct financial assistance, in the form of loans is given to

  • Women entrepreneurs operating a Micro or Small Enterprise including Retail Trade

Note that definition of Micro-enterprise or Small- enterprise or Medium-enterprise per MSMED Act has been changed since July 1, 2020.

Please click here for concise details

 

What’s on offer?

I. Product

  • Term loans
  • Working capital facility: overdraft
    • Drawing power shall be fixed based on level of stock / book debts on monthly basis
  • Ticket size upto ₹10 Lakhs
  • In case of existing satisfactorily running units, the amount of ₹10 Lakhs shall be in addition to the existing exposure, if any
  • If in case working capital facility and term loan are financed together under this product, total credit facilities excluding existing exposure, if any should not exceed ₹10 Lakhs
  • W.r.t disbursement:
    • For term loan, disbursement to be made against bills/ invoice/ vouchers/ directly to the vendor or supplier. In case of construction of business premises, amount will be released in stages as per progress of construction
    • For working capital, it’s a running limit

II. Purpose:

  • Acquisition of fixed assets
  • Working capital requirements

III. Borrower Type:

  • Individuals, Proprietorship concern, Partnership firms, Limited Liability Partnership (LLP), Corporate bodies

IV. Security or Collateral or Guarantee or Insurance

  • Primary security: Hypothecation of assets created out of Bank finance or hypothecation of book debts or paid stocks
  • Collateral security:
    • If exposure is covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), no collateral security will be required
    • If exposure is not covered under CGTMSE, collateral security will be required by way of mortgage of non-agricultural property or lien on National Savings Certificate (NSC)/ Kisan Vikas Patra (KVP)/ deposits/ assignment of LIC policies or hypothecation of vehicles; valued not less than 20% of existing and proposed credit facility
    • No CGTMSE coverage for credit facility sanctioned under Retail Trade activity
    • In case the value of primary security in the form of non agricultural land and building is more than 133% of the total per party credit exposure, apart from other primary security with 25% margin, collateral security need not be insisted upon
  • Guarantee:
    • Nil for credit facility covered under CGTMSE
    • In case the credit facility is not covered under CGTMSE, the third party guarantee acceptable to KVGB having net worth of at least equal to the loan amount
  • Insurance:
    • Charged securities should be comprehensively insured with bank clause. For details around payment of insurance premium, please contact KVGB via means mentioned below

V. Interest Rate

  • 11% per annum
  • For more information around overdue interest rate, please contact KVGB via means mentioned below

VI. Processing Fee

  • For new term loan or working capital facility sanctions:
    • For advances upto ₹2 Lakhs: 0.5% of sanction amount with a minimum of ₹250/- + GST
    • For advances above ₹2 Lakhs: ₹1000/- + ₹500 per lakh or part thereof exceeding ₹ 2 lakhs + GST
  • For renewals (working capital facility only):
    • For renewals upto ₹2 Lakhs: 0.5% of sanction amount with a minimum of ₹250/-+ GST
    • For renewals above ₹2 Lakhs and upto ₹50 Lakhs: ₹1000/- + ₹500 per lakh or part thereof exceeding ₹ 2 lakhs + GST
  • For more information around these, please contact KVGB via means mentioned below

VII. Margin Money Requirement

  • 20% as primary security coverage ratio should be a minimum of 125%

VIII. Tenure, Repayments & Pre-Closures

  • For term loans: upto 84 months, including moratorium of upto 6 months. In case of construction of business premises, the moratorium can be extended upto 12 months
  • For working capital limit: annual review of account
  • For more information on pre-closures etc., please contact KVGB via means mentioned below

IX. Turnaround Time

  • For more information on turnaround time, please contact KVGB via means mentioned below

 

Interested? Read ahead to check your eligibility….

I. Do you control the management of your business?

OR

In case of a Partnership firm, are majority of Partners women?

OR

In case of a Company, is the management controlled by women?

II. In case you are an existing customer of KVGB, do you have a satisfactory track record with the Bank both on conduct of account and financials of the applicant unit?

OR

If you are a new customer, do you have satisfactory dealings with your existing bankers, if any?

OR

If you are seeking loan for new units, is the market opinion on the promoters and prospects of the project or business proposed satisfactory?

If your answers to the questions above are an emphatic YES, you are all set to avail the loan under Vikas Asha Scheme!

 

So…how big is this scheme and what has been done so far?

I. Since its launch on March 8, 2021 through to March 31, 2021, 962 accounts were sanctioned loans worth ₹12.26 Crores under Vikas Asha Scheme

II. While the latest details on the Scheme don’t seem to be available in public domain, KVGB’s loan outstanding to women beneficiaries as on March 31, 2022 were ₹2,825.79 Crores

 

So, now, how should you go about it?

I. For information on loan application & list of documentation, and for submitting application &

documents, please visit any one of the 629 branches of KVGB located across 9 districts in Karnataka namely, Bagalkote, Belagavi/Belgaum, Bijapur/Vijaypura, Dakshin Kannada, Dharwad, Gadag, Haveri, Udupi, and Uttar Kannada

II. For any queries,
Contact KVGB on toll free number 18004251666

OR
Call or visit any one of the 629 branches of KVGB located across 9 districts in Karnataka namely, Bagalkote, Belagavi/Belgaum, Bijapur/Vijaypura, Dakshin Kannada, Dharwad, Gadag, Haveri, Udupi, and Uttar Kannada

 

Go on then…and do spread the word!

 

Sources:

  1. About the Scheme: Refer Pages 44 & 45 of the document
  2. About KVGB
  3. About Interest Rate on the Scheme: Refer Page 1 of the document
  4. About KVGB’s Service Charges
  5. KVGB’s Annual Report 2021-22
  6. KVGB’s Annual Report 2020-21
  7. About Launch of the Scheme 1
  8. About Launch of the Scheme 2

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